MeadWestvaco's Eco-Friendly Project (revised) - Analyst Blog

In an effort to convert organic waste streams into biogas and other value-added products, paper and plastics maker MeadWestvaco Corp. (MWV) has teamed up with VOW Resources and Zera Energy.

A demonstration plant adjacent to MeadWestvaco's Evadale, Texas, mill will soon be constructed with completion expected in November 2010. The facility will create 30 construction jobs and provide 12 full-time positions.

Zera Energy will construct and operate the plant while VOW Resources will design, engineer and test the process to be used at the plant. MeadWestvaco will work on determining the technical and commercial viability of the biogas generation process and, upon successful testing, will apply the technology to its waste treatment operations.

Through this strategic alliance, MeadWestvaco will be able to lower its water and natural gas consumption as well as produce organic fertilizer. Also, the company expects to optimize its operations and produce renewable energy sources by using this technology.

MeadWestvaco reported strong second-quarter results driven by increased profitability in global packaging and other markets, complemented by improved operating productivity at its manufacturing facilities and supply chain, and reducing overhead costs.

The Zacks Consensus Estimate for third-quarter 2010 earnings is 55 cents per share. For full year 2010 and 2011, the Zacks Consensus Estimates are, respectively, $1.44 per share and $1.69 per share.

We maintain our “Neutral” recommendation on MeadWestvaco. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.

Headquartered in Richmond, VA, MeadWestvaco Corporation is a leading global producer of packaging & consumer solutions, consumer & office products, and specialty chemicals. The company delivers higher-value paper and plastic-based packaging in the food and beverage, media and entertainment, personal care, cosmetic and healthcare markets.

(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)