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Eastman Chemical (EMN) to Invest $1B in Recycling Facility

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Eastman Chemical Company (EMN - Free Report) recently announced a plan to invest up to $1 billion in a material-to-material molecular recycling facility in France. The plant is expected to use Eastman's polyester renewal technology to recycle up to 160,000 metric tons annually of hard-to-recycle plastic waste that is presently being incinerated.

This multi-phase project includes units that are expected to prepare mixed plastic waste for processing, a methanolysis unit to depolymerize the waste, and polymer lines to form a variety of first-quality materials for specialty, packaging, and textile applications. The investment is a major step forward in the company’s strategy to accelerate a circular economy globally.

Eastman also plans to set up an innovation center for molecular recycling that would enable France to sustain a leadership role in the circular economy.

This innovation center is expected to advance alternative recycling methods and applications to curb plastic waste incineration and leave fossil feedstock in the ground. The facility and innovation center are projected to be operational by 2025, creating employment for roughly 350 people and leading to an additional 1,500 indirect jobs in recycling, energy and infrastructure.

Eastman Chemical, in its third-quarter call, stated that it is seeing sustained logistics challenges, supply-chain issues and higher raw material and energy costs as it enters the fourth quarter. It is implementing price hikes across its specialty product lines to offset high costs.

The company expects adjusted earnings per share of $8.80-$9.00 for 2021. EMN also anticipates free cash flow to reach $1.1 billion for the year. It will report fourth-quarter results on Jan 27.

Other prominent chemical stocks scheduled to report fourth-quarter earnings on Jan 27 are Dow Inc. (DOW - Free Report) , Celanese Corporation (CE - Free Report) and Olin Corporation (OLN - Free Report) . Dow, in October 2021, said that it is seeing strong end-market demand and expects this to continue into 2022. DOW also expects logistics constraints and low inventory levels across its value chains over the near term.

Celanese, in its last earnings call, stated that demand for its products remains strong in most end markets as it enters the fourth quarter. It sees pent-up demand across Engineered Materials and Acetyl Chain units to more than offset any impact of typical year-end seasonality. Notwithstanding the sourcing and logistics headwinds, CE expects to deliver fourth-quarter adjusted earnings of roughly $5.00 per share.

Olin expects a sequential increase in results in the Chlor Alkali Products and Vinyls segment but a seasonal decline in the Epoxy and Winchester segments in the fourth quarter. Overall, OLN expects fourth-quarter adjusted EBITDA to be comparable to or slightly lower than the third-quarter levels.


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