Eastman revs up innovation engine

US-based Eastman Chemical will seek to leverage its “compelling, innovation-based organic growth model” to generate over double the average growth rate of underlying markets in its specialty products business, and grow earnings per share by 8-12% annually through 2020, its CEO said on 6 February.

“Our R&D scale enables faster, more differentiated product development. We can crack problems that are not so simple – this takes analytical capability at the molecular level,” said Mark Costa, CEO of Eastman, at the company’s Innovation Day in New York.

“We are masters of integrating multiple technology platforms,” he added.

EMBRACING COMPLEXITY

Eastman embraces complexity, as its seven technology platforms that can be applied across seven target markets creates an infinite range of solutions, providing competitive advantage, he said.

“Complicated is good in a specialty business because it is hard for our competitors to do it,” said Costa.

Eastman’s technology platforms are polyvinyl butyral (PVB), oxo derivatives, modified polyesters, cellulose esters/acetyls, hydrocarbon resins, insoluble sulfur and alkylamines.

And its target application platforms are transportation (20% of 2017 sales), consumables (18%), building and construction (13%), consumer/medical durable/electronics (10%) and animal nutrition/crop protection (7%).

TETRASHIELD INNOVATION

In one example, Eastman in 2017 developed its Tetrashield protective resin systems for auto exteriors using its expertise in acetyls, polyesters and olefin derivatives, said Lucian Boldea, senior vice president, Additives & Functional Products (AFP).

It was approached by auto original equipment manufacturer (OEM) Mahindra & Mahindra in India to solve the problem of fading paint and gloss on vehicle exteriors from weather exposure. Customers were demanding better performance.

A polyester coating typically offers excellent scratch resistance, chemical resistance, but not weatherability. However, Eastman started modifying polyester with other materials to achieve the latter as well.

Working with paint formulator Kansei Nerolac, within 11 months, it was able to provide a drop-in replacement that provided two times the gloss retention under tests replicating two years of exposure, Boldea said.

Eastman has since delivered its Tetrashield product to around 300,000 painted sports utility vehicles (SUVs), he said.

The company is now working with 10 paint formulators and 6 OEMs on Tetrashield, and also extending the product to industrial protective coatings that traditionally use epoxy resins, and metal packaging coatings in the food and beverage sector.

“Most exciting is metal packaging coatings for food and beverage cans, which use epoxy resins with BPA (bisphenol A),” said Boldea.

“We are making good progress, and this will have a more dramatic shift because the [metal packaging] sector is more consolidated. It’s early days but we’re very excited,” he added.

Overall, Eastman aims to boost its new business revenue from around $300m in 2017, to about $500m by 2020 with new product launches across multiple platforms. Eastman’s total revenue in 2017 was $9.55bn, up by 6% from 2016.

FIBERS PIVOT

Eastman also plans to expand its textiles business to pivot its Fibres segment away from being primarily an acetate tow supplier.

“Textiles is an area in need of material innovation – it’s a value-rich target for harnessing molecular design across the value chain,” said Steve Crawford, chief technology officer at Eastman.

“The industry needs a raw material supplier that knows enough about design to meet their needs,” he added.

The purchasing power in apparel has shifted to millennials, who demand comfort, performance and green credentials, along with fast fashion cycles, he noted.

Eastman is in a unique position to design polymers to provide specific attributes such as moisture wicking, flexibility and feel, through the entire process from spinning to production of the garment, said Crawford.

In textiles, Eastman relies on its copolyesters and cellulose esters technology platforms.

In December 2017, Eastman closed its first commercial sale of its AVRA performance fibres to Spyder, which produces apparel for the US ski team for the 2018 Winter Olympics taking place in Pyeongchang, South Korea.

AVRA is based on ultra-thin polyester fibres held together by a proprietary polymer. Key features include thermal and moisture management.

Cellulose esters are used to produce apparel as well as nonwovens for applications such as medical facial masks and baby wipes.

Eastman has developed an environment friendly textiles platform based on cellulose esters. It launched its Naia brand of textiles which is 60% bio-based and uses “extremely clean chemistry”, said Crawford.

It is based on wood pulp derived from sustainably grown forests, according to Eastman.

In 2017, Eastman saw over 10% growth in its textiles business, which is within its Fibres segment.

Meanwhile, in acetate filter tow, Eastman has put over two-thirds of its business under multi-year contracts, offering stability in 2018, while aggressively managing its cost structure, said CEO Costa.

For the Fibres segment, driven by textiles momentum, Eastman expects sales growth in the low-single digits and an operating margin of over 25%, leading to 1-3% compounded annual growth in operating earnings from 2018-2020.