On February 20, Eastman Chemical Company experienced a power outage resulting in a shutdown at its Longview, Texas, site as previously announced. During restart operations late last week, an unexpected equipment breakage connected to one of the two operating cracking units at the site delayed startup and is interrupting production of certain products and intermediates.
The company is working directly with customers on supply plans and is assessing the duration of the outage. Based on current information, the company expects to have the smaller of the two crackers online by mid-March and the larger cracker online before the end of March. The company has notified its insurance carriers of the outage as part of the claims assessment process.
Based on the current timeline for restarting the crackers, the company expects the impact of the outage on first-quarter 2010 earnings per share to be between $0.20 and $0.25. This impact is expected to be mostly offset by higher than forecasted sales volume and operating margin. Segments affected by the outage are Performance Chemicals and Intermediates (PCI) and Coatings, Adhesives, Specialty Polymers and Inks (CASPI).
“We take our commitment to being a reliable supplier to our customers seriously and are working hard to resolve this unusual situation and restore supply as soon as possible,” said Ron Lindsay, executive vice president, performance polymers and chemical intermediates. “We recognize the impact this outage is currently having on our customers, and we deeply appreciate the value they place on our long-term track record as a reliable supplier.”
Eastman’s chemicals, fibers and plastics are used as key ingredients in products that people use every day. Approximately 10,000 Eastman employees around the world blend technical expertise and innovation to deliver practical solutions. The company is committed to finding sustainable business opportunities within the diverse markets it serves. A global company headquartered in Kingsport, Tenn., Eastman had 2009 sales of $5 billion.
