Ecolab Supports WWF and AWS - Analyst Blog

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Global sanitation major, Ecolab Inc. ( ECL ) extended its support for the Alliance for Water Stewardship ("AWS") through its agreement with World Wildlife Fund ("WWF"). Together, their goal is to improve the worldwide quality of water used in industries for economic, social and environmental welfare.

Ecolab has got an excellent opportunity, via this global commitment, to market its expertise in water management. It has agreed to provide technical as well as financial aid to test the drafted AWS standards for two consecutive years.

Revenues in the recently reported quarter from the company's Global Water sales, in terms of constant currency, were $498 million. Sales were supported by growth in metals, mining, and food and beverage industries. Total revenues of $2,810.9 million (a quarterly record) topped the Zacks Consensus Estimate.

Per the agreement, Ecolab is entitled to assess the proposed AWS standard in the field and to gather practical information necessary to modify and refine the draft. The company also needs to promote awareness about the necessity of adhering to the standard to lower risks of polluting industrial water.

A total of 10 organizations form the AWS and WWF is one of them. Sponsored by the AWS, the Global Water Roundtable is engaged in finalizing the International Water Stewardship Standard draft.

The final AWS International Water Stewardship Standard will contain detailed guidelines for optimal usage of water in industries and certain water stewardship principles. It will provide water stewards with certain rules for managing watershed level and assessing water at a site so that minimum water is wasted.  

Recently, Nalco Holdings, a subsidiary of Ecolab, was declared the "2012 Water Technology Company of the Year" during the 2012 Global Water Awards, held in Rome. Ecolab, in December 2011, closed its $8.3 billion acquisition of Illinois-based water treatment services major Nalco Holding.

Ecolab offers its products and services to the hospitality, foodservice, institutional and industrial markets across more than 160 countries. The company continues to invest in strategic areas such as product innovation, health care, water and energy and global pest elimination to spur growth.

Although we are impressed with Ecolab's strong international exposure, we remain cautious about aggressive competition from the likes of  Clorox  ( CLX ) and  Church & Dwight ( CHD ). Raw material price inflation also remains a headwind.

We currently have a long-term Neutral recommendation on Ecolab, which is supported by a short-term Zacks #3 Rank (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: CHD , CLX , ECL

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