The ratings on Ecolab Inc. reflect an above-average business profile and a conservative financial philosophy. The company is the well-entrenched leader in the U.S. institutional warewashing business, a technology- and service-intensive segment of the chemical sector. Management fortifies the company's competitive position by extending its proprietary technology and developing new products. A large direct sales force and a national distribution network serving most U.S. hospitality chains are significant competitive advantages. The company's internal cash generation consistently exceeds operational needs, and profitability measures are strong; return on capital for the past five years has remained near 30%, comparing favorably with that of most specialty chemical companies. Given its significant market penetration, Ecolab uses internal initiatives and midsize acquisitions to provide complementary
