Eastman Chemical Company
) gained as much as 1.6% during the trading session following the
news of the expansion of Eastman 168 non-phthalate plasticizers'
capacity at the Texas City manufacturing facility.
The expansion at the facility will increase the overall
capacity of Eastman 168 by roughly 15% and operations are
expected to begin by mid-2014. The company's shares eventually
closed at $81.46 on the day following the news release, gaining
The expansion will require minimum capital investment as it is
an extension of an already existing asset. The capacity
expansion at the Texas City facility also creates a chance for
another expansion of similar kind in the near term. The capacity
addition to the Texas City facility, which was acquired in 2011,
was consistent with the market growth expectations.
Non-phthalate plasticizers demand remained strong across a
variety of end-markets and end-uses. As per Eastman Chemical, the
capital invested for the expansion will help it in sustaining its
leadership position in North America and Europe by catering to
the needs of current and new customers.
Products in which non-phthalate plasticizers are widely used
include toys, childcare items, food contact materials and medical
devices. It is also used for providing flexibility to PVC in
different applications. End markets for non-phthalate
plasticizers range from building and construction, and health and
wellness to a wide spectrum of consumer products.
Eastman Chemical reported impressive second-quarter 2013
results in Jul 2013. Both revenues and adjusted earnings for the
quarter topped Zacks Consensus Estimates. Revenues soared year
over year on contributions from the Solutia
Eastman Chemical's diversified chemical portfolio, along with
its integrated and diverse downstream businesses, remain its
strength. It also benefits from business restructuring,
cost-cutting measures and increased capacity additions.
However, the company remains exposed to volatility in raw
material costs and lower pricing. The uncertain economic recovery
in Europe is also an overhang. The company sees earnings in the
second half to be modestly lower than the first due to
Eastman Chemical currently carries a Zacks Rank #3 (Hold) and
will release its third quarter 2013 results on Oct 24.
Other companies in the chemical industry worth considering are
Akzo Nobel NV
Air Products & Chemicals Inc.
). All of them hold a Zacks Rank #2 (Buy).
AKZO NOBEL NV (AKZOY): Get Free Report
AIR PRODS & CHE (APD): Free Stock Analysis
BASF SE (BASFY): Get Free Report
EASTMAN CHEM CO (EMN): Free Stock Analysis
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