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 at almost 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
