Eastman Takes New Strategy in the Plastics Business

Restructuring of the American plastics industry continues with the announcement that Eastman Chemical is considering a divestiture of its PET business.  Eastman had been an industry leader with development of low-cost manufacturing technology, but is being battered by giant Asian producers on price.

PET is a great material. Packages made from PET are characterized by their light weight, gloss, high strength, durability, clarity, low cost, safety, and recyclability. They’re widely used in beverage and food packaging and other applications such as personal care and cosmetics packaging, health care and pharmaceutical uses, household products, carpet fibers, and industrial packaging applications.

From a design engineering perspective, there will still be plenty of PET in the USA. In fact, there may be a glut of PET in the next few years, a key reason why Eastman may exit the market.

The potential sale does not affect the Tritan copolyester business, which is in a different business division called Specialty Plastics. In fact, Eastman’s strategy with Tritan is a text book case of how companies can cope with markets that become commoditized.

While historically the Specialty Plastics segment’s ability to compete was related to supply-demand balances of competing plastics, the addition of Tritan, which is based on Eastman proprietary technology, opens new market opportunities due to its unique combination of properties. In food applications, the fact that copolyesters are both BPA- and halogen-free makes them an attractive alternative for design engineers.

Another winner is a very old product-plastics made from wood fiber, which are called cellulosics.