Eastman Announces Plan to Consolidate Coatings Operations

10-May-2001

Eastman Chemical Company (NYSE: EMN) today announced plans to consolidate a portion of its coatings operations in the United States.

Eastman plans to close two plants obtained with the acquisition of McWhorter Technologies in 2000. One plant is in Philadelphia, Pa., and produces resins for the coatings market and employs about 30 people. The other plant, in Portland, Ore., with about 20 employees, also produces resins for the coatings market. Production at these two facilities will be phased out with plans to close the facilities by the end of October 2001.

Earnest W. Deavenport Jr., chairman and chief executive officer, said the consolidation will help ensure Eastman's manufacturing capability is tightly aligned with its business strategy. "This is a strategic business for Eastman," Deavenport said. "Increasing efficiency by better using existing capacity will position us for further expansion in key growth markets."

J. Brian Ferguson, president of Eastman's Chemicals Group, said the company continues to review ways to improve the efficiency of its global coatings business. "Today's announcement is part of our strategic plan to realize the full earnings potential of our acquisitions," Ferguson said. "The acquisitions we've completed over the past several years enable us to offer our customers a broad range of products and technologies, and we want to do that in the most efficient way possible." Ferguson said Eastman plans to transfer production of key products and technologies from the Philadelphia and Portland plants to other manufacturing plants.

"Discontinuing operations is difficult because of the impact on individuals in the company," Ferguson said. Employees at the two plant sites will receive separation benefits based on their length of service.

The plant closings will result in a non-recurring charge to earnings in the second quarter.

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