Pall Corp. Wins Contract - Analyst Blog

Pall Corporation (PLL) has been chosen by JGC-Tecnimont Joint Venture to provide vital technologies to the Habshan 5 Process Plant project in UAE. The plant is being built by Abu Dhabi Gas Industries Ltd. and is valued at approximately $5 billion.

JGC Corp. is a Japanese engineering contractor and Tecnimont S.p.A. is an Italian contractor, working jointly on this project. Pall Corp will be supplying its SepraSol liquid/gas coalescer systems, Ultipleat High Flow and Coreless Profile filters, porous metal high flow elements with PMF media, and activated carbon units to the Habshan 5 Process Plant project. The products from Pall are used to cleanse incoming gas, guard pipelines and process equipment, and optimize the work of acid gas treatment systems in a number of plants like Habshan 5.

In July 2009, a massive Integrated Gas Development (IGD) project was started in UAE, which was expected to be completed in the third quarter of 2013. Habshan 5 is a part of this IGD project, which upon completion is expected to produce 900 million standard cubic feet per day (MMSCFD) of sales gas; 12,000 tons per day of natural gas liquids (NGL); and 5,000 tons per day of liquid sulphur.

Pall is considered to be the largest player in the filtration/separations industry based on its revenue and approximately 7% market share. The company enjoys above-average financial returns and reasonable growth prospects due to a highly-engineered technology, reliable global distribution, and high market share in niches, long and close working histories with customers, few competitors and solid product quality supplemented by technical services.

In the long run, Pall will likely benefit from several secular trends, such as global infrastructure growth, increasing demand for water filtration systems and continued steady growth in the medical and the pharmaceutical markets.

However, changes in product mix and product pricing may impact the company’s operating results, particularly with the expansion of the systems business, in which the company experiences significantly longer sales cycles with less predictable revenue and no certainty of future revenue streams from related consumable product offerings and services. Based in New York , Pall Corporation was founded in July 1946. Along with its subsidiaries, Pall Corporation is a leading supplier of filtration, separation and purification technologies, and uses its engineering capability and fluid management expertise.

We currently have a Neutral recommendation on Pall Corporation, with a Zacks #2 Rank over the next one-to-three months.