Eastman to temporarily close S.C. PET plant

KINGSPORT, TENN. (Updated Oct. 27, 5:40 p.m. ET) -- Eastman Chemical Co. temporarily will close a major PET plant in South Carolina during the fourth quarter.

Eastman President and CEO Jim Rogers confirmed the move during an Oct. 23 conference call with investors.

During the call, Rogers said that third quarter operating result in Eastman’s performance polymers unit — including PET — declined because of lower selling prices and “continuing operational challenges with our Integrex-based PET manufacturing facility” in Columbia, S.C.

“Looking forward to the fourth quarter, while we have made progress identifying and resolving operational issues with our IntegRex asset, we have more work to do,” he said. “As a result, we will have a shutdown in the fourth quarter to make additional improvements that we expect will get this asset operating like we know it can.”

Rogers provided no details regarding the timing or duration of the shutdown. Company spokeswoman Wanda Valentine also said that no further information regarding the shutdown was available.

“Plans are still being finalized,” Valentine said Oct. 26 by phone. The shutdown “is for routine maintenance and repair,” she added. “We’re doing this in the fourth quarter because it’s usually a slow demand period.”

Eastman customers can be supplied with PET from other Eastman locations and “shouldn’t be affected much” by the Columbia shutdown, Valentine said.

Eastman opened the Columbia plant in 2006. It was the first major plant to use the firm’s Integrex-brand technology, which has lower energy inputs than standard PET production methods.

The plant opened with almost 800 million pounds of annual capacity. A 400 million-pound expansion was completed in late 2008.

Eastman also announced Oct. 23 that the firm’s third-quarter profit was flat vs. the year-ago quarter, even though sales dropped almost 27 percent to less than $1.4 billion. Performance plastic sales for the quarter were down 36 percent to $187 million, while sales in the firm’s specialty plastic unit — including Tritan-brand copolyester — were down 21 percent to $200 million.

In the first nine months of 2009, Eastman’s overall sales fell 31 percent to $3.7 billion, while profit fell 33 percent to $347 million.

On Wall Street, Eastman’s per-share stock price bottomed out at $18 in early March, but was near $55 in late trading Oct. 27.

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