Exxon Mobil (XOM) To Follow Strategy And Boost Polypropylene
Zacks Investment Research | Mar 20, 2018 11:26PM ET
Exxon Mobil Corporation (NYSE:XOM) recently commenced with a potential U.S. Gulf Coast project, intending to grow its capacity of producing polypropylene up to 450,000 tons a year. The company started the detailed engineering work of the project as it foresees a rise in demand for high-performance, lightweight durable plastics.
The final decision on the multi-billion facility, expected to come online in 2021, will be made this year. The construction period is expected to create more than 600 jobs. Once the project comes online, it will generate in excess of 60 permanent jobs.
Project Rationale
The advanced polypropylene products from the facility can be used in several businesses including high performance automotive, appliance and packaging applications. The low-toxin plastic's other uses include increasing fuel efficiency and reducing carbon emissions. The global demand for higher-value plastic products is increasing in the recent days, mainly in the Asia Pacific region and North America. Exxon Mobil plans to capitalize the opportunity to further diversify its revenue sources.
Additionally, the growth in domestic oil and gas supplies not only resulted in reduced energy costs but also increased the feedstock sources for chemical manufacturing in the United States that can increase the largest publicly-traded international energy company's profitability.
This potential investment is part of Exxon Mobil's Gulf Coast expansion strategies and also in line with the company's intention to invest $50 billion in the United States through the next five years. Additionally, it is expected to help the company reach its goal of doubling annual earnings by 2025.
Price Performance
Irving, TX-based ExxonMobil has lost 9.6% in a year against 6.1% rise witnessed by the Zacks Investment Research
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