| Eastman seeks to sell US PET resin operations2011-07-09 |
Eastman Chemical is considering the sale of its North American PET business, the flagship material that has been its most recognisable product for more than 30 years. In a 41-word news release, officials at Kingsport, US-based Eastman said that the firm “will review strategic options, including a possible divestiture, for its PET business.” A potential PET sale by Eastman has been rumoured for some time. The firm has already sold off its PET operations outside of the US as profitability in the industry has declined. A number of factors lie behind this decline, including low growth in the carbonated soft drink segment and light-weighting of bottles, which has allowed processors to make thinner bottles which use less PET. Eastman spokeswoman Tracy Broadwater said that the firm “has worked hard” for several years to improve the PET business, but “despite our good efforts…this continues to be a very challenging industry. “This [PET] business still isn’t performing at acceptable levels and has not been a profitable business for us since 2005,” she added. “This has led us to consider whether we are the best owner of this business.” Eastman would like to find a buyer for the business by the end of the year, according to Broadwater. She added that the firm “would review strategic options other than a divestiture.” Eastman has hired New York-based Bank of America Merrill Lynch as its financial advisor for the proposed sale. Alongside the proposed disposal, Eastman has announced first-quarter financial results showing that its Performance Polymers unit — including PET — posted an operating loss of $13m (€9.75m) in the first three months of the year, even as sales grew 18%. Based on sales, Performance Polymers was the smallest of Eastman’s five reporting segments in the first quarter and was the only one to show an operating loss. Eastman is North America’s second-largest PET maker with a market share of 23%. The company manufactures the resin at its plant at Columbia in South Carolina. |
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