Eastman seeks buyer for 'challenging'PET business

April 26-Eastman Chemical is considering the sale of its PET business, the flagship material that has been its most recognisable product for more than 30 years.

In a brief news release issued 23 April, officials with Tennessee-based Eastman said that the firm "will review strategic options, including a possible divestiture, for its PET business".

A potential PET sale by Eastman had been rumoured for some time. The firm had sold off its PET operations outside of the US in recent years as profitability in the industry has declined. PET profitability has been impacted by a number of factors, including low growth in the carbonated soft drink segment and light-weighting of bottles, which has allowed processors to make thinner bottles which use less PET.

Eastman spokeswoman Tracy Broadwater said that the firm "has worked hard" for several years to improve the PET business, but "despite our good efforts this continues to be a very challenging industry".

"This [PET] business still isn t performing at acceptable levels and has not been a profitable business for us since 2005," she added. "This has led us to consider whether we are the best owner of this business."

Eastman would like to find a buyer for the business by the end of the year, according to Broadwater. She added that the firm "would review strategic options other than a divestiture".

Eastman has hired New York-based Bank of America Merrill Lynch as its financial advisor for the proposed sale.

Also on 23 April, Eastman announced first-quarter financial results, showing that its Performance Polymers unit including PET posted an operating loss of $13m in the first three months of the year, even as sales grew 18%. Based on sales, Performance Polymers was the smallest of Eastman's five reporting segments in the first quarter and was the only one to show an operating loss.