Executives with Eastman Chemical Co. said in a recent conference call that they believe they will find a buyer for their PET resin business by the end of the year.
During the firm's second-quarter conference call with stock analysts July 29, Chief Financial Officer Curt Espeland said Kingsport, Tenn.-based Eastman has seen strong interest in the PET unit since announcing it was open to a sale in late April.
Part of the reason we've had strong interest is that anyone who wants to be a leader in North American PET is going to want this asset, he said. This gives us the confidence, plus our experience in working with this type of process outside the U.S. We feel good that we'll conclude this by the end of the year.
Eastman President and CEO James Rogers added during the call that he believes his firm is seeing strong interest and I would expect that there will be somebody that sees this business as worth more to them than it's worth to Eastman.
PET has been Eastman's most recognizable product for more than 30 years. But declining profitability and slowing demand growth has led Eastman to sell off its non-U.S. PET assets and has led Eastman and other firms to close some North American capacity.
Eastman's only remaining PET plant is a major site in Columbia, S.C., that uses the firm's patented Integrex-brand technology.
Earlier this year, Eastman hired New York-based Bank of America Merrill Lynch as its financial adviser for the proposed sale.
PET maker Invista of Wichita, Kan., recently announced its intention to explore selling its PET unit and related assets, citing reasons similar to those of Eastman.
We have a very attractive business offering with this asset, said Eastman's Espeland. It has the scale and the integration benefits at the South Carolina site and it has a great technology that gives us a conversion cost advantage for IntegRex.
Eastman also released its second-quarter and first-half financial results July 29. Overall company sales increased about 30 percent to $1.7 billion during the quarter, vs. a year ago. Earnings per share hit a record level of $2.02. Quarterly profit more than doubled to $148 million.
For the half, Eastman's overall sales grew almost 40 percent to $3.3 billion vs. 2009. First-half profit of almost $250 million was almost four times the profit level attained in the year-ago period.
Performance Polymers, including PET, ranked as the smallest of Eastman's five operating units, based on sales, even as its first-half sales total increased almost 21 percent to $416 million. First-half sales for Specialty Plastics including Tritan-brand copolyester soared more than 50 percent to $519 million.
Performance Polymers posted a first-half operating loss of $7 million, slightly better than the $11 million operating loss it had in the first half of 2009. Also for the first half, Specialty Plastics swung from a $10 million operating loss in 2009 to a $42 million operating profit in 2010.