US Eastman sees high interest in PET business, seeks year-end sale

30 July 2010 17:05  [Source: ICIS news]

Eastman ponders PET saleHOUSTON (ICIS)--Eastman Chemical has seen strong interest in its polyethylene terephthalate (PET) business since putting it on the selling block in late April and a sale could be reached by the end of 2010, top company executives said on Friday.

“I do think that we’re seeing strong interest,” CEO Jim Rogers said during a conference call for second-quarter earnings. “My expectation is that there will be somebody that sees this business as worth more to them than it’s worth to Eastman.”

Eastman is one of the largest producers of PET in the US, with its PET plant in South Carolina having a capacity of 525,000 tonnes/year.

The company said technology at the plant near Columbia, South Carolina, gave it a significant conversion-cost advantage.

“Anyone who wants to be a leader in the North American PET market is going to want these assets,” chief financial officer Curt Espeland said. “We feel good that we will conclude this by the end of the year.”

Eastman’s performance polymers segment, which includes PET, saw year-over-year sales increase 20% in the second quarter to $222m (€169m). However, earnings declined slightly for the segment as a result of difficult market conditions for PET in North America, the company said.

As a result of those conditions, Eastman said it struggled to pass through price increases needed to offset higher raw material and energy costs. The company had said it would conduct a "strategic review" of the PET business.

Overall, Eastman’s second-quarter earnings increased to $148m on a 38% rise in sales.

($1 = €0.76)

For more on Eastman visit ICIS company intelligence
For more on PET visit ICIS chemical intelligence
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