By Everdeen Mason
Honeywell International Inc. (HON) said it will spend about $300
million to build a new, environmentally friendly automobile
refrigerant manufacturing plant in response to increasing demand
overseas.
The industrial conglomerate is working with key suppliers to
increase production capacity for HFO-1234yf, a new refrigerant for
automobiles with a global-warming potential of less than 1. The
global-warming potential is 99.9% lower of the current refrigerant
in use and even lower than that of carbon dioxide, Honeywell
said.
The plant, to be built in Geismar, La., is expected to be fully
operational by 2016.
"Demand for (the refrigerant) is increasing around the world in
response to concerns about greenhouse gas emissions and the need to
comply with the Mobile Air Conditioning (MAC) Directive in Europe
and Corporate Average Fuel Economy (CAFE)regulations in the U.S.,"
said Chief Executive Andreas Kramvis.
The U.S. supplies a major portion of European demand for the
current refrigerant in use, Mr. Kramvis added. Honeywell said it is
considering building a plant in Europe, depending on demand and
market requirements.
The new regulations in Europe require all refrigerants in
vehicles sold after Jan. 1 of this year to have a global-warming
potential below 150. All cars must meet this metric by 2017.
In the U.S., auto makers are also adopting the new refrigerant
to help comply with improved greenhouse gas standards in cars and
light trucks.
Earlier this year, Honeywell also said it would launch packaging
operations for the new refrigerant in Japan to serve the Asian
market.
Honeywell's shares closed at $87.87 Monday and were inactive
premarket. As of Monday's close, the stock is up 42% in the past 12
months.
Write to Everdeen Mason at everdeen.mason@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires