US Eastman CEO stresses demand over restocking in sales growth

02 June 2010 17:22  [Source: ICIS news]

HOUSTON (ICIS news)--True demand, and not just inventory re-stocking, is driving chemical sales, the chief executive of US producer Eastman Chemical said on Wednesday.

In fact, Eastman and other companies have had trouble reaching their inventory levels due to higher demand, said Jim Rogers. "Most of this is final demand, not inventory re-stocking," he said.

Rogers spoke at the Goldman Sachs Basic Materials Conference.

So far, demand has remained resilient, despite the debt crisis in Europe, Rogers said. "Europe continues to hold up for us."

Although demand had increased, customers were still placing orders with little lead time, Rogers said. Orders made more than six weeks out still remained a small portion of Eastman's overall business, he said.

Rogers also said sustainability would remain a growing trend in the chemical industry.

The company's coal-based chemical plant in Kingsport, Tennessee, should remain competitive even if natural gas prices remained low, he said.

"I remember when natural gas was under two bucks. Coal was still advantaged," Rogers said.

"We think we have a long-term sustainable advantage in Kingsport working from coal," he said.

Regarding the company's Tritan copolyester, Rogers said the material continued to gain market share.

Eastman had been marketing Tritan as a non-bisphenol A (BPA) substitute for polycarbonate (PC).

Some studies have linked BPA with such ailments as diabetes, cancer and developmental problems in foetuses. Trade groups have stressed that more research was needed.

Nonetheless, companies that make 5-gal (19-litre) water bottles have started to adopt Tritan, Rogers said.

Eastman produces coatings, adhesives, specialty polymers and inks.

For more on BPA or PC visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Al Greenwood
+1 713 525 2645

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