) launched its latest range of USDA BioPreferred and Green Seal
certified bio-based hard surface cleaners. The new product line
includes a peroxide multi-surface cleaner, glass cleaner, acid
bathroom cleaner and neutral bathroom cleaner.
These offerings will enhance the portfolio of Ecolab's US
Cleaning and Sanitizing segment. Revenues for the segment
increased 1% year over year (5% on a pro forma basis) to $760.9
million in the second quarter of 2012. Institutional sales
increased 3% year over year on the back of market share gains in
the last quarter.
Ecolab witnessed steadfast growth in demand for its products from
lodging facilities in the second quarter. As the company's latest
organic solutions are designed for lodging, commercial and
facility operations, the new product launches should drive
segment sales. Marketing initiatives and better field technology
are expected to bolster sales of its latest range of bio-based
hard surface cleaners.
St. Paul, Minnesota-based Ecolab serves the food service, food
and beverage processing, healthcare, energy, water treatment and
hospitality markets both in the U.S. as well as internationally.
The company continues to invest in strategic areas such as health
care, food, water and energy and global pest elimination to
expand its business. Management's current emphasis is on product
innovation, sales organization, volume growth, appropriate
pricing, and merger synergies along with the rationalization of
With a background of robust growth, Ecolab is poised to gain
momentum via its aggressive strategy of pursuing acquisitions.
The company recently announced the acquisition of privately-owned
Champion Technologies and its related company Corsicana
Technologies for $2.2 billion, in cash and stock. Moreover,
Ecolab's growth has been buoyed by its strong international
presence, especially in emerging markets like Asia-Pacific and
Despite the impressive strong international exposure, we remain
cautious on Ecolab owing to the aggressive competition from the
Church & Dwight
). Raw material price inflation and higher delivered product cost
continue to be headwinds for the company.
We currently have a long-term 'Neutral' recommendation on
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