Eastman to Discontinue Propylene Glycol Production

26-Oct-2000

KINGSPORT, Tenn. (Oct. 24, 2000)—Eastman Chemical Company (NYSE:EMN) today announced its propylene glycol production facilities in South Charleston, W.V., will discontinue operations effective Dec. 31, 2000. The company will cease production for all grades and derivatives of propylene glycol.

"Raw material and conversion costs make it unattractive to continue these operations," said Eric DeLoach, director coatings specialties and solvents.

Eastman acquired the propylene glycol facility from Arco in 1992. Located in the Union Carbide manufacturing complex at South Charleston, the plant is operated under a general service agreement with Union Carbide. No full-time Eastman employees are located at the complex.

For the first nine months of 2000, the propylene glycol product line contributed approximately $13 million to sales revenue, and earnings have been slightly negative. Substantially all costs associated with the shutdown have been recognized in prior periods. Any additional costs or gains resulting from the disposition of this product line will be recognized when a plan of disposition is approved.

Eastman has propylene glycol storage terminals in Longview, Texas; Kingsport; Tenn.; Chicago; Ill.; Perth Amboy, N.J.; and South Charleston, W.V. Storage tanks in all locations except South Charleston will be converted to store other Eastman products.

Manufactured by propylene oxide hydrolysis, propylene glycol, dipropylene glycol and tripropylene glycol have a broad range of coatings and industrial applications including unsaturated polyester resins, liquid detergents, food additives, anti-freeze, personal care and household products.

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