Celanese Corp. (CE) said its technology to make ethanol from coal is more profitable than producing the gasoline additive from plants, and is a “game-changer” for the U.S. chemicals company.
The so-called TCX technology can convert coal, petroleum coke or natural gas to ethanol for 25 percent to 35 percent less than alternative processes, Celanese said today in presentation slides posted on its website. The cost of converting coal to ethanol is $1.50 a gallon, equal to making gasoline from crude oil costing $60 a barrel, the Dallas-based company said.
“Fuel with our ethanol technology represents a game- changer for the company,” Chief Executive Officer David Weidman said in a presentation to investors in New York.
Weidman said he is advancing a November plan to build two factories in China that will turn coal into ethanol for industrial uses. The company also may produce ethanol for fuel in China, India, Australia, Colombia and Egypt, he said.
Ethanol sales could boost yearly earnings by more than $1 a share, said Edlain Rodriguez, an analyst at Gleacher & Co.
“We expect investors to start focusing soon on this potential value-creating platform not currently embedded in the stock price,” Rodriguez, who is based in New York and recommends buying the stock, said today in a report.
Celanese rose $2.17, or 4.3 percent, to $52.08 at 4:01 p.m. in New York Stock Exchange composite trading, the biggest daily percentage increase since Nov. 18. The shares have gained 26 percent this year.
Earnings in 2013 will be at least $6 a share and will grow 10 percent to 15 percent after then, not including gains from ethanol sales, Weidman said. That’s higher than the company’s April forecast for 2013 profit of $5.50 to $6.50. The average estimate of five analysts surveyed by Bloomberg was for $5.63.
To contact the reporter on this story: Jack Kaskey in Houston at firstname.lastname@example.org.
To contact the editor responsible for this story: Simon Casey at email@example.com.