Dow (DOW) Announces Launch of AGILITY CE Plastic Resin

Zacks Equity Research

Dow Inc. DOW recently announced the development of AGILITY CE — the first post-consumer recycled (PCR) product in its plastics circularity portfolio to integrate high percentage of post-consumer plastic waste. The new resin is made with 70% recycled plastic.

The resin’s composition also includes low-density polyethylene (LDPE). A recycled plastic shrink film is used in the final product without compromising material consistency or functionality.

This is the first grade of AGILITY CE that will be used as secondary packaging for the shipment of cans or bottles in collation shrink films. This helps converters to integrate more than 50% of recycled content into the final film formulation without modifying its usability. The high-quality recyclate will enable retailers and brand owners to achieve sustainability targets as well as reduce landfill waste.

Per Dow, AGILITY CE will be a consistent and high-quality product that is different from previous mechanically-recycled content that has often diminished or degraded in quality. The company plans to showcase AGILITY CE as well as many other technologies to its customers at K 2019 from Oct 16-23 in Dusseldorf, Germany.

The company continues to work toward a system that will facilitate the reuse of secondary and transport packaging films into the same type of application. This breakthrough is another example of Dow's strategy to make it possible for plastics to migrate to a circular economy. To achieve the same, the company is concentrating on resource efficiency as well as incorporating recycled content and sustainable feedstocks into its production processes.

Dow, in August, announced a partnership with Fuenix Ecogy Group that is based in Weert, The Netherlands, to supply pyrolysis oil feedstock made from recycled plastic waste. The agreement is a major step to increase feedstock recycling, which breaks down mixed waste plastics into their original form to produce new virgin polymers. Dow also entered into a partnership with UPM to incorporate wood-based renewable naphtha into its raw material slate, providing an alternative source of plastic feedstock.

Dow’s shares have declined around 7.8% in the past three months compared with the roughly 7.2% fall recorded by the industry.



In second-quarter 2019 earnings call, the company stated that the pace of global economic growth has slowed as buying patterns remain cautious amid trade and geopolitical uncertainties.

Against the backdrop, the company is focused on maintaining cost and operational discipline through cost synergy as well as stranded cost-removal initiatives. The company noted that it is lowering its planned capital spending for 2019 to $2 billion from $2.5 billion considering prevailing market environment.

Zacks Rank & Key Picks

Dow currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks worth considering in the basic materials space include Kinross Gold Corporation KGC, AngloGold Ashanti Limited AU and Alamos Gold Inc AGI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has estimated earnings growth rate of 170% for the current year. The company’s shares have rallied nearly 78.1% in a year’s time.

AngloGold has an expected earnings growth rate of 154.72% for the current year. Its shares have surged around 149.2% in the past year.

Alamos Gold has estimated earnings growth rate of 340% for the current year. The company’s shares have rallied roughly 32.5% in a year’s time.

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