Eastman Chemical Company (Eastman) operates as a global specialty materials company.
The company produces a broad range of products found in items people use every day. Eastman has 36 manufacturing facilities and has equity interests in three manufacturing joint ventures in 12 countries that supply products to customers throughout the world. With a robust portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions with a commitment to safety and...
Eastman Chemical Company (Eastman) operates as a global specialty materials company.
The company produces a broad range of products found in items people use every day. Eastman has 36 manufacturing facilities and has equity interests in three manufacturing joint ventures in 12 countries that supply products to customers throughout the world. With a robust portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions with a commitment to safety and sustainability.
The company then pursued growth through the development and acquisition of more specialty businesses and product lines by inorganic acquisition and integration (including acquisitions of Solutia, Inc., a global leader in performance materials and specialty chemicals in 2012, and Taminco Corporation, a global specialty chemical company in 2014) and organic development and commercialization of new and enhanced technologies and products.
Eastman uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development capabilities, and relentlessly engaging the market. The company's world class technology platforms, scale advantage, and sustainability macrotrends form the foundation of the company's research and development (R&D) and innovation initiatives. Molecular recycling technologies continue to be an area of investment focus for the company and extend the level of differentiation afforded by its world class technology platforms. Key areas of application development include thermoplastic conversion, functional films, coatings formulations, textiles, and personal and home care formulations. The company engages the market by working directly with customers and downstream users, targeting attractive niche markets, and leveraging disruptive macro trends. The company's impact is evidenced by recycling technology that allows for waste to be used as building blocks in several Eastman products, branded with ‘Renew’. The company also focuses on funding targeted growth opportunities and acquiring bolt-on acquisitions.
Strategy
Integral to the company's strategy for growth is leveraging its heritage expertise and innovation within its cellulosic biopolymer and acetyl, olefins, polyester, and alkylamine chemistries. The company sells differentiated products into diverse markets and geographic regions and engages the market by collaborating and co-innovating with customers and downstream users in existing and new niche markets to creatively solve problems.
Segments
The company operates through four segments: Advanced Materials (AM), Additives & Functional Products (AFP), Chemical Intermediates (CI), and Fibers.
Advanced Materials
In the AM segment, the company produces and markets polymers, films, and plastics with differentiated performance properties for value-added end-uses in transportation; durables and electronics; building and construction; medical and pharma; and consumables end-markets. Key technology platforms for this segment include cellulosic biopolymers, copolyesters, and PVB and polyester films.
Eastman's technical, application development, and market development capabilities enable the AM segment to modify its polymers, films, and plastics to control and customize their final properties for the development of new applications with enhanced functionality. For example, Tritan copolyesters are a leading solution for food contact applications due to their performance and processing attributes and bisphenol A free (‘BPA free’) properties. The Saflex Q Series product line is a leading acoustic solution for architectural and automotive applications. The company also maintains a leading solar control technology position in the window films market, as well as advanced urethane film and coatings technologies in the paint protection film market. The segment principally competes on differentiated technology and application development capabilities.
Principal Products
Advanced Interlayers: Products include Saflex, Saflex Q Series, and Saflex HUD interlayer products. The company’s principal competitors include Sekisui Chemical Co., Ltd.; Kuraray Co., Ltd.; Kingboard (Fo Gang) Specialty Resins Limited; and Chang Chun Petrochemical Co., Ltd.
Performance Films: Products include LLumar, Flexvue, SunTek, V-KOOL, and Gila. The company’s principal competitors include XPEL, Inc.; 3M Company; and Saint-Gobain S.A.
Specialty Plastics: Products include Tritan copolyester, Eastar copolyesters, Spectar copolyester, Embrace copolyester, Visualize, Eastman Aspira family of resins, and Treva. The company’s principal competitors include S.K. Chemical Industries; Sichuan Push Acetati Company Limited; Daicel Chemical Industries Ltd.; Covestro AG; Trinseo S.A.; and Saudi Basic Industries Corporation.
Strategy
The company applies its innovation-driven growth model in the AM segment by leveraging innovation and technology platforms to develop new and multi-generational products and applications to help facilitate AM segment growth and leverage its manufacturing capacity. The AM segment is positioned to benefit from Eastman polyesters and acetyl streams sustainability innovations by leveraging molecular recycling technologies to enable various waste plastics to be recycled into specialty plastics products marketed and sold under the ‘Renew’ product designations. The segment continues to expand its portfolio of higher margin products in attractive end-markets. The advanced interlayers product lines, including acoustic and HUD sheet interlayer products, leverage Eastman's global presence to supply industry leading innovations to automotive and architectural end-markets by collaborating with global and large regional customers. The segment's product portfolio is aligned with underlying energy efficiency trends in both automotive and architectural markets.
The AM segment expects to continue to improve its product mix from increased sales of premium products, including Tritan copolyester, Tritan Renew, Visualize material, Saflex Q acoustic series, Saflex HUD interlayer products, LLumar, V-KOOL, and SunTek window and protective films.
In 2024, the AM segment: achieved key milestones within the Circular Economy platform; continued adoption of polyester renewal technology for products, including Tritan Renew, Cristal Renew, and Cristal One Renew across several end-markets, including cosmetic packaging, eyewear, and power tools; continued to expand portfolio of differentiated post-applied window films and protective films for automotive and architectural applications, including LLumar Protective Wrap Film which integrates the look of car wraps with the resilience of paint protection film, helping elevate vehicle protection; and launched Saflex LiteCarbon Clear, a premium polyvinyl butyral interlayer that reduces the embodied carbon of laminated glass elements while maintaining the construction of safe buildings, and Saflex Evoca, a new platform designed to upgrade the glazing potential in electric vehicles that offers acoustic, solar or color options to assist in electric vehicle design.
Additives & Functional Products
In the AFP segment, the company manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics end-markets. Key technology platforms are cellulosic biopolymers, polyester polymers, alkylamine derivatives, and propylene derivatives.
The AFP segment focuses on producing high-value additives that provide critical functionality, but which consists a small percentage of total customer product cost. The segment principally competes on the differentiated performance characteristics of its products and through leveraging its strong customer base and long-standing customer relationships to promote substantial recurring business and product development. A critical element of the AFP segment's success is its close formulation collaboration with customers through advantaged application development capability.
Principal Products
Care Additives: Products include alkylamine derivatives, organic acids and derivatives, and cellulosic biopolymers. The company’s principal competitors include BASF SE; Huntsman Corporation; Corteva, Inc.; Argo-Kanesho Co., Ltd.; Bayer AG; and Adisseo.
Coatings Additives: Products include Polymers cellulosics, Tetrashield polyesters, polyolefins, Additives and Solvents, Texanol, Optifilm, ketones, esters, and EastaPure electronic chemicals. The company’s principal competitors include BASF SE; Dow Inc.; OQ Chemicals; Celanese Corporation; and Alternative Technologies.
Functional Amines: Products include alkylamines. The company’s principal competitors include BASF SE; Arclin Inc.; US Amines Limited; and OQ Chemicals.
Specialty Fluids & Energy: Products include Therminol, Turbo oils, Skydrol, SkyKleen, and Marlotherm. The company’s principal competitors include Dow Inc. and Exxon Mobil Corporation.
Strategy
Eastman applies its innovation-driven growth model in the AFP segment by leveraging proprietary technologies for the continued development of innovative product offerings and focusing growth efforts in end-markets, such as food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics. Eastman BPA-NI Tetrashield protective resins enable metal packaging coatings formulation with a unique balance of durability and flexibility, improving performance, regulatory compliance, shelf life, and consumer safety. Such protective resins can also be used in protective coatings, industrial coatings, and automotive coatings. The company is also developing solutions to address the environmental challenges caused by non-biodegradable microplastics in personal care products by leveraging its world-class biodegradable cellulosic biopolymer technology platform in biodegradable micropowders for personal care applications.
In 2024, the AFP segment:
launched electronic grade isopropyl alcohol (IPA), the latest addition to the EastaPure electronic chemicals line, that offers U.S. semiconductor manufacturers a domestically made solvent as reliable in quality as it is in supply;
introduced Eastman Esmeri, a biodegradable cellulosic biopolymer non-persistence personal care ingredient delivering consumer expectations with enhanced performance and ecofriendly benefits;
introduced Solus, a biodegradable paper coating additive that enhances the end of life of packaging in food service, by co-creating a flexible, food-safe packaging solution with a specialty papers producer; and
invested in manufacturing capabilities in Europe, Middle East, and Africa and the Asia Pacific regions to support market growth for pharmaceutical applications and wastewater treatment market growth, respectively.
Chemical Intermediates segment
Eastman leverages large scale and vertical integration from the cellulosic biopolymers and acetyl and olefins streams to support the company's specialty operating segments with advantaged cost positions. The CI segment sells excess intermediates beyond the company's internal specialty needs into end-markets, such as industrial chemicals and processing, building and construction, health and wellness, and food and feed. Key technology platforms include acetyls, oxos, and plasticizers.
The CI segment product lines benefit from competitive cost positions primarily resulting from the use of and access to lower cost raw materials, and the company's scale, technology, and operational excellence. Examples include produced acetic anhydride used in the manufacturing of cellulosic biopolymers and acetyl stream product lines, propylene and ethylene used in the production of olefin derivative product lines, such as oxo alcohols and plasticizers. The CI segment also provides superior reliability to customers through its backward integration into readily available raw materials, such as propane, ethane, and propylene.
Several CI segment product lines are affected by cyclicality, most notably olefin and acetyl-based products. This cyclicality is caused by periods of supply and demand imbalance, when either incremental capacity additions are not offset by corresponding increases in demand, or when demand exceeds existing supply. Management has recently taken steps to reduce the impact of the trough of these cycles, including the use of refinery-grade propylene (RGP) in the feedstock mix, resulting in reduced participation in the merchant ethylene market and the divestiture of its Texas City Operations in 2023. Future results are expected to fluctuate due to both general economic conditions and industry supply and demand.
Principal Products
Intermediates: Products include oxo alcohols and derivatives, acetic acid and derivatives, acetic anhydride, ethylene, glycol ethers, esters, and organic acids and derivatives. The company’s principal competitors include Lyondell Bassell; BASF SE; Dow Inc.; OQ Chemicals; Celanese Corporation; Lonza; and Ineos Group Holdings S.A.
Plasticizers: Products include Eastman 168, Dioctyl phthalate (DOP), Benzoflex, TXIB, and Effusion. The company’s principal competitors include BASF SE; Exxon Mobil Corporation; LG Chem, Ltd.; and Lanxess AG.
Strategy
To maintain and enhance its status as a producer and optimize earnings, the CI segment continuously focuses on capacity utilization. This includes focusing on products used internally by other operating segments, thereby supporting growth in specialty product lines throughout the company, and also external licensing opportunities. Through the CI segment, the company has leveraged the advantage of its highly integrated manufacturing facilities. Scale at the Kingsport, Tennessee manufacturing facility allows for competitive advantage in the production of acetic anhydride and other acetyl derivatives.
Fibers
In the Fibers segment, Eastman manufactures and sells acetate tow and triacetin plasticizers for use in filtration media, primarily cigarette filters; cellulosic filament yarn and staple fibers for use in apparel under the brand Naia, home furnishings, and industrial fabrics; nonwoven media for use in filtration and friction applications, used primarily in transportation, industrial, and agricultural end-markets; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers.
The 10 largest Fibers segment customers accounted for approximately 60 percent of the segment's 2024 sales revenue, and include multinational as well as regional cigarette producers, fabric manufacturers, and other acetate fiber producers.
The company's fully integrated fibers manufacturing process employs unique technology that allows it to use a broad range of high-purity wood pulps for which it has dependable sources of supply.
Principal Products
Acetate Tow: Products include Estron. The company’s principal competitors include Celanese Corporation; Cerdia International; Daicel Corporation; and Jinan Acetate Chemical.
Acetate Yarn and Fiber: Products include Naia and Estron. The company’s principal competitors include UAB Dirbtinis Pluostas; Lenzing AG; and Aditya Birla Group.
Acetyl Chemical Products: Products include Estrobond. The company’s principal competitors include Daicel Corporation; Celanese Corporation; Cerdia International; and Jinan Acetate Chemical.
Nonwovens: The company offers nonwovens. The company’s principal competitors include Hollingsworth and Vose Company, Lydall, Inc., and BorgWarner Inc.
Strategy
Management applies the innovation-driven growth model to the Fibers segment by leveraging its strong customer relationships and industry knowledge to maintain a leading industry position in the global market. The segment benefits from a state-of-the-art, world class, acetate flake production facility at the Kingsport, Tennessee site, which is supplied from Eastman's vertically integrated gasification facility and is the largest and most integrated acetate tow site in the world. The Fibers segment also expects to benefit from Eastman's recently developed carbon renewal technology, which enables the substitution of fossil fuel feedstock with recycled waste content. Products using this technology are marketed and sold under the ‘Renew’ product designation. The company contractually supplies acetate flake raw material to the manufacturing facility of its acetate tow joint venture in China from the company's manufacturing facility in Kingsport, Tennessee, which the company recognizes in sales revenue.
In 2024, the Fibers segment:
continued to benefit from and execute multi-year raw material and energy cost pass-through contracts across the acetate tow customer base;
commercialized Naia Renew Enhanced Sustainability, an offering sourced from 60 percent recycled content with a global fashion brand known for its sustainability focus; and
reached over 70 signed trademark licensing agreements with high profile brands ranging from major multinational fashion brands to sustainable champions in outdoor clothing.
Seasonality
Eastman's earnings are typically lowest in fourth quarter (year ended December 31, 2024), and cash flows from operations are typically highest in the second half of the year due to seasonal demand based on general economic activity in the company's key markets. Results in all segments except the Fibers segment are typically weaker in the fourth quarter due to seasonal downturns in key markets.
Eastman is exposed to consumer discretionary end-markets and changes in global consumer spending, particularly in the AM and AFP segments. The coatings additives product line of the AFP segment and the intermediates product line of the CI segment are impacted by the cyclicality of key end products and markets, while other operating segments and product lines are more sensitive to global economic conditions. Supply and demand dynamics determine profitability at different stages of business cycles, and global economic conditions affect the length of each cycle.
Sales, Marketing, and Distribution
Eastman markets and sells products primarily through a global marketing and sales organization that has a presence in the United States and approximately 30 other countries, selling into more than 100 countries around the world. The company focuses its market engagement on attractive niche markets, leveraging disruptive macro trends, and market activation throughout the value chain with both customers and downstream users. Eastman's strategy is to target industries and markets where the company can leverage its application development expertise to develop product offerings to provide differentiated value that address customer and market needs. The company's strategic marketing approach and capabilities leverage the company's insights about trends, markets, and customers to drive development of specialty products. Through a highly skilled and specialized sales force that is capable of providing differentiated product solutions, Eastman strives to be the preferred supplier in the company's targeted markets.
The company's products are also marketed through indirect channels, which include dealers and contract representatives. Sales outside the United States tend to be made more frequently through dealers and contract representatives than sales in the United States. The combination of direct and indirect sales channels, including sales online through its Customer Center website, allows Eastman to reliably serve customers throughout the world.
The company's products are shipped to customers and downstream users directly from Eastman manufacturing plants and distribution centers worldwide.
Intellectual Property, Trademarks, and Licensing
As a producer of a broad range of advanced materials, specialty additives, chemicals, and fibers, Eastman owns over 800 active United States patents, approximately 1,700 active foreign patents, and over 4,500 active worldwide trademark applications and registrations. Domestic and foreign patents within the company's portfolio are subject to various expiration dates, depending on the dates they were originally filed and laws governing patent terms and extensions thereof in applicable jurisdictions.
Customers
Eastman has an extensive customer base, and while it is not dependent on any one customer, loss of certain top customers could adversely affect the company until such business is replaced. The top 100 customers accounted for approximately 60 percent of the company's 2024 sales revenue.
Compliance With Environmental and Other Government Regulations
Compliance with chemical control laws (including the U.S. Toxic Substances Control Act, the U.S. Federal Insecticide, Fungicide, and Rodenticide Act and similar non-U.S. counterparts, and the Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") program in the European Union) and laws protecting intellectual property (see "Intellectual Property, Trademarks, and Licensing") have the most impact on the company's day-to-day operations and competitive position.
In some cases, applicable environmental regulations such as those adopted under the United States' Clean Air Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act, and related actions of regulatory agencies determine the timing and amount of environmental costs incurred by the company.
Under the U.S. Occupational Safety and Health Act of 1970, as administered by the Occupational Safety and Health Administration ("OSHA"), some of the company's operations are subject to workplace standards under OSHA's Process Safety Management program.
History
Eastman Chemical Company was founded in 1920. The company was incorporated in Delaware in 1993.
