Ferro Corp.: Glazing at the sun

With oil prices skyrocketing and the global economy in a slowdown, it might not seem like an auspicious time to invest in a chemicals company. But Ferro Corp. (NYSE:FOE) is a specialty chemicals company where the operative word is “specialty.”

Founded in 1919 to manufacture frit, the substance used in making porcelain enamel, Cleveland-based Ferro is still a global leader in the field. But, lest your eyes begin to glaze over about such a mundane product, note that Ferro is also geared up for the 21st century as it builds a 177,000-square-foot factory in China to make aluminum paste for the production of solar cells in Asia. It doesn’t get much trendier than that.

In fact, while Ferro has moved decisively since Jim Kirsch took over as chief executive in 2005 to divest non-core businesses, slash fixed costs, close old factories and consolidate production into new state-of-the-art plants, continuity is a key element of Ferro’s success.

Last year, Ferro opened a new tile glaze and stain-making factory in Castellon, Spain to supply growing European tile markets as it closed older tile color facilities in Italy and the Netherlands, and transferred production to Spain. Ferro, which set up its first foreign plant in 1927, has been producing tile color products in Castellon for 42 years.

The establishment of a porcelain enamel and tile coating factor in Suzhou, China in 2001 created a platform for Ferro to get into the solar energy business in the country and break ground last year for its new aluminum paste factory. However, Ferro first got into solar energy 25 years ago and is now the leading supplier of conductive pastes to the worldwide solar industry.

But it’s not history that has investors excited about Ferro now. The company beat analysts’ earnings estimates for the quarter ended March 31, 2008 by 20%, . . .

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