Profile: Eastman Chemical Co (EMN.N)

EMN.N on New York Stock Exchange

28 Jan 2015
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Eastman Chemical Company (Eastman), incorporated on July 29, 1993, is a specialty chemicals company that produces a range of advanced materials, chemicals and fibers. Eastman has over 40 manufacturing sites in 16 countries and equity interests in joint ventures that supply chemicals, plastics, and fiber products to customers throughout the world. Eastman has a portfolio of specialty businesses that hold positions and provide products that enhance performance in a variety of end markets, such as transportation, building and construction, and consumables. The Company’s segments include Additives & Functional Products, which consists of the rubber additives product lines and the specialty polymers and solvents product lines; Adhesives & Plasticizers, which consists of the adhesives product lines and the plasticizer product lines; Advanced Materials, which consists of plastics Performance Films and Advanced Interlayers product lines; Fibers, which consists of the acetate tow, acetate yarn and acetyl chemical product lines, and Specialty Fluids & Intermediates, which consists of the specialty fluids product lines and oxo and acetyl intermediates product lines. The Advanced Materials segment owns SunTek brand, and has a manufacturing facility and master distribution center in Martinsville, Virginia and nine sales distribution centers to serve the global market.

Additives & Functional Products

In the Additives & Functional Products segment, the Company manufactures chemicals for products in the coatings and tires industries in transportation, building and construction, durable goods, and consumables markets. Key technology platforms in this segment are rubber additives, cellulosic polymers, specialty ketones and coalescents, polyester polymers and hydrocarbon resins.

Additives & Functional Products growth in the United States, Canada, and Europe typically approximates general economic growth due to the wide variety of end uses, such as tires, paints, and consumables. Recently, growth in Asia, Eastern Europe, and Latin America has been higher than global economic growth because of higher growth in gross domestic product (GDP) and per capita income in these emerging economies. The segment focuses on producing high-value additives rather than finished formulated products and developing long-term, strategic relationships to achieve preferred supplier status with its customers.

Chemicals for the coatings industry enhance the aesthetic appeal and improve the performance of industrial, architectural, and transportation coatings. The products Eastman manufactures for the coatings industry can be broadly classified as solvents and polymers. The solvents product line includes specialty coalescents and ketones, and esters, glycol ethers, and alcohol solvents. Coalescents include products, such as Texanol ester alcohol, which improves film formation and durability in architectural latex paints. Ketones are used in high solids low volatile organic compound (VOC) coatings applications. The polymers product line consists primarily of cellulose and polyester-based specialty polymers. Eastman's cellulose-based specialty polymers enhance the aesthetic appeal and improve the performance of industrial and transportation coatings and inks. The polyester-based specialty polymers are multifunctional water-dispersible film formers for personal care, graphic arts, textile, coatings, and packaging applications. The polymers product line also includes chlorinated and non-chlorinated polyolefins which promote the adherence of paints and coatings to plastic substrates, United States Pharmacopeia (USP)-grade hydroquinone which is used as an active pharmaceutical ingredient in skin lightening creams, and sucrose acetate iso-butyrate (SAIB) which provides thermal, hydrolytic, and color stability in cosmetic applications.

Additives for the tires industry cure and protect rubber, durability, and lengthen product life. These products are important in the manufacture of tires and other rubber products, such as belts, hoses, seals, and footwear. The Additives & Functional Products segment manufactures products for the rubber chemicals industry classified into three main product groups: insoluble sulfur products, antidegradant products, and performance resins and cellulosic products.

Other applications for Additives & Functional Products solvents and polymers include use in consumables, health and wellness, electronics, and industrial chemicals. olvents sales to other markets include sales of esters and ketones for printing ink, consumables, and process solvent markets, and chemicals marketed by Eastman's subsidiary Dynaloy, LLC for specialized electronic applications. Other polymer applications include cellulosics used in graphic arts and pharmaceutical applications, specialty polyesters utilizing Eastman's bio-catalytic chemistry in personal care applications, and aqueous polymer technology used for personal care products.

The Company competes with Oriental Carbon & Chemicals Limited, Shikoku Chemicals Corporation, Jiangsu Sinorgchem Technology Co., Ltd., Korea Kumho Petrochemical Co., Ltd. and LANXESS AG.

Adhesives & Plasticizers segment

In the Adhesives & Plasticizers segment, Eastman manufactures resins and plasticizers which are used in the manufacture of products serving the consumables, building and construction, durable goods, health and wellness, and industrial chemicals and processing markets. Growth for resins in Asia, Eastern Europe, and Latin America continues to be higher than regional economic growth, mainly due to growing use of consumables in these emerging economies. The Adhesives & Plasticizers segment focuses on producing intermediate chemicals rather than finished products.

The resins product line consists of hydrogenated hydrocarbon resins, such as Regalite, Eastotac, and Regalrez; non-hydrogenated hydrocarbons resins, such as Kristalex, Plastolyn, and Piccotac; and rosins and amorphous polyolefins, such as Permalyn, Pamolyn, and Eastoflex. These products are sold primarily to adhesive formulators and consumer product companies for use as raw materials essential in hot-melt and pressure sensitive adhesives and as binders in nonwoven products, such as disposable diapers, feminine products, and pre-saturated wipes. The plasticizers product line primarily consists of a set of primary non-phthalate plasticizers, such as Eastman 168 and Eastman DOA, and a range of niche non-phthalate plasticizers, such as Benzoflex, Eastman TXIB, Admex and Eastman DBT. These non-phthalate plasticizers are typically used in end-use applications, such as interior surfaces, medical devices, food contact materials, toys, and childcare articles.

The Company competes with BASF, LG Chem, Ltd. and Exxon Mobil Corporation (Exxon).

Advanced Materials segment

In the Advanced Materials segment, the Company produces and markets specialty copolyesters, cellulose esters, interlayers, and aftermarket window film products that possess differentiated performance properties for value-added end uses in transportation, consumables, building and construction, durable goods, health and wellness, and electronics. Eastman has technical and market development capabilities that enable the segment to modify its polymers and plastics to control and customize final properties for new application development to deliver more functionality. Examples include sound reduction and solar control through the interlayers product line. Additionally, these capabilities allow the Company to maintain what management believes is solar control technology position in the window film market through the use of high performance sputter coatings. The specialty materials product line consists of two primary products: specialty copolyesters and cellulose esters. PVB is a specialty resin used as an adhesive interlayer in the production of laminated safety glass sheet used in the transportation and building and construction markets. It imparts high tensile strength, impact resistance, transparency, and elasticity that make it particularly useful in the production of safety glass. Laminated safety glass is predominately produced with PVB sheet and is subject to government regulation in all industrialized countries for automobile windshields. Emerging markets are increasing the use of laminated safety glass in automotive windshields although it is generally not subject to government regulation. Architectural laminated safety glass is widely used in the construction of modern office buildings, airports, and residential homes.

The Company competes with Bayer AG, Styron LLC, Evonik Industries AG, Saudi Basic Industries Corporation, Mitsubishi Chemical Corporation, S.K. Chemical Industries, Sichuan Push Acetati Company Limited, Daicel Chemical Industries Ltd (Daicel), Sekisui Chemical Co., Ltd., Kuraray Co., Ltd., and E. I. du Pont de Nemours, Company (DuPont), 3M Company, Saint-Gobain S.A., Commonwealth Laminating & Coating, Inc., and Garware Chemicals Limited.

Fibers segment

In the Fibers segment, Eastman manufactures and sells Estron acetate tow and Estrobond triacetin plasticizers for use primarily in the manufacture of cigarette filters; EstronTM natural and Chromspun solution-dyed acetate yarns for use in apparel, home furnishings and industrial fabrics; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers. Eastman is one of the suppliers of acetate tow and has been in the manufacture and sale of acetate tow. The Fibers segment's manufacturing operations are primarily located at the Kingsport, Tennessee site and also include smaller acetate tow production plants in Workington, England and Ulsan, South Korea.Eastman manufactures acetate tow under the EstronTM trademark according to a wide variety of customer specifications, primarily for use in the manufacture of cigarette filters.

The Company manufactures acetate filament yarn under the Estron and Chromspun trademarks in a wide variety of specifications. Estron acetate yarn is available in bright and dull luster and is suitable for subsequent dyeing in the fabric form. Chromspun acetate yarn is solution-dyed in the manufacturing process and is available in more than 100 colors.

The Fibers segment's acetyl chemical products are sold primarily to other acetate fiber producers and include cellulose diacetate flake, acetic acid, and acetic anhydride. Each is used as a raw material for the production of cellulose acetate fibers. The Fibers segment also markets acetyl-based triacetin plasticizers under the Estrobond brand, generally for use by cigarette manufacturers as a bonding agent in cigarette filters.

The Company competes with Celanese Corporation (Celanese), Daicel, Mitsubishi Rayon Co., Ltd. and Solvay S.A.

Specialty Fluids & Intermediates segment

The Specialty Fluids & Intermediates segment leverages scale and vertical integration from the acetyl and olefins streams to manufacture diversified products that are sold externally for use in markets, such as industrial chemicals and processing; building and construction; health and wellness; energy, fuels, and water; consumables; and agriculture, as well as used internally by other segments of the Company. The Specialty Fluids & Intermediates segment offers approximately 175 products that include intermediates based on oxo and acetyl chemistries and performance chemicals.

Therminol heat transfer fluids are used for indirect heating and cooling of chemical processes in various types of industrial equipment and in solar energy power systems. The fluids provide enhanced heat transfer characteristics because they remain thermally stable at both high and low temperatures. Skydrol brand aviation hydraulic fluids are supplied across the aviation industry, including to airline airframe manufacturers and aviation maintenance facilities. The Skydrol line includes fire-resistant aviation hydraulic fluids which are used in the commercial aircraft.

The Company's Specialty Fluids & Intermediates segment is the United States marketer of acetic anhydride, an intermediate that is a critical component in analgesics, laundry care products, and nutritional supplements, and is the only United States producer of acetaldehyde, a key intermediate in the production of agricultural and other specialty products. Eastman management believes that it manufactures one of the broadest ranges of products derived from oxo aldehydes and holds a North American market position for many of these products. The Specialty Fluids & Intermediates segment also manufactures performance chemicals and complex organic molecules, such as diketene derivatives, specialty ketones, and specialty anhydrides for medical, pharmaceutical, fiber, and food and beverage ingredients, which are typically used in specialty market applications.

The Company competes with BASF, Celanese, Dow and Exxon.

Company Address

Eastman Chemical Co

PO Box 511
KINGSPORT   TN   37660
P: +1423.2292000
F: +1302.6555049

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