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Clean Air Engineering

Briefing Book

for

Eastman Chemical

Last Updated 04/03/98

Eastman Chemical Company
Corporate Info

Eastman Chemical company is a leading international chemical company that produces more than 400 chemicals, fibers, and plastics including: Acids, Aldehydes, Acetyls,

Fiber Intermediates, Hydroquinone, Hydroquinone Derivatives, Industrial Intermediates, Industrial Additives, Nitriles, Oxo Products, Polyethylene Waxes, Cellulose Esters, Solvents, Plasticizers, Chlorinated Polyolefins,Textile Chemicals Antioxidants, Vitamin E, Polyester Fiber, Actate Fiber, Cellulosic, Polyolefin, Polyester Thermoplastics, Cellulosic Film & Sheet.

Founded in 1920 in Kingsport, Tennessee, as a unit of Eastman Kodak Company, Eastman Chemical Company was spun off in 1994 and is now an independent, publicly held company traded on the New York Stock Exchange (ticker symbol EMN). Eastman has more than 7,000 customers worldwide, employs approximately 17,500 people and has approximate annual sales of $4.8 billion.

Eastman pioneered the application of coal gasification technology for the production of chemicals (also referred to as "chemicals from coal technology") and currently operates one of the largest coal gasification facilities in the United States.

In 1997 the Company had sales of $4.68 billion, operating earnings of $506 million, net earnings of $286 million, and basic earnings per share of $3.66.

Eastman Chemical won the 1993 Malcolm Baldridge National Quality Award in the large manufacturing category.

Industry Week magazine named Eastman one of the world’s 100 best-managed companies in 1996.

Eastman Chemical Company contributes approximately $2,000,000 annually to communities where it has facilities. About half of that amount has been given to colleges and universities in those areas.

Web Page: www.eastman.com

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4th Quarter 1997 Business Forecast

KINGSPORT, Tenn.--(BUSINESS WIRE)--Jan. 27, 1998--Eastman Chemical Company (NYSE:EMN) today reported higher sales for the fourth quarter of 1997. Sales of $1.154 billion during the fourth quarter were up four percent when compared with sales of $1.113 billion for the same quarter of 1996. The company reported fourth quarter net earnings of $28 million after a previously-announced pre-tax charge of $62 million related to early retirements occurring in 1997. Earnings per share for the fourth quarter were $.36 including the impact of the early retirement charge equivalent to $.52 per share. For the year, Eastman sales were $4.678 billion. Earnings for 1997 were $286 million. The company reported earnings per share of $3.66 including the early retirement charge.

Significant improvements in core plastics, chemical intermediates, and coatings, inks and resins product lines in the fourth quarter were partially offset by lower fibers demand. Comparisons of fourth quarter 1997 to fourth quarter 1996 results show an increase of nearly 20 percent in price and 13 percent in volume for PET container plastics marketed as Eastapak polymers. "When it comes to container plastics, we believe the trough is behind us and recovery continues," said Earnest W. Deavenport, Jr., chairman and CEO.

Deavenport said that fourth quarter results represent the first increase in earnings (before the early retirement charge) in two years. "We look for that trend to continue into 1998," he added. "Approximately 800 million pounds of additional Eastapak polymers capacity has been added or is under construction," Deavenport said. He noted that Eastman is also bringing on-line significant additional capacity for the manufacture of Spectar and Eastar copolyesters, oxo chemicals, and isophthalic acid in 1998.

Eastman is in the second year of Advantaged Cost 2000 - a commitment to remove $500 million from the cost structure by the end of the year 2000. Eastman reduced employment during 1997 by approximately 1,500 employees or 8.5 percent. Deavenport said the decline in employment is consistent with the goals of Advantaged Cost 2000. "We said we planned to remove $100 million from our cost structure in 1997 and we exceeded that goal," he said. In four years as a public company, Eastman sales volumes have risen 27 percent while employment has decreased by eleven percent. "This produces a productivity improvement of about 8 percent per year, which is more than twice the average of manufacturing companies in the United States," Deavenport stated. "And, our improvements have come about without involuntary layoffs or special incentive programs," he added. Capital expenditures during 1997 were $749 million, well below the estimate of $850 million. For 1998, Eastman expects to further reduce capital expenditures to between $550 million and $600 million.


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Business Organization

Eastman categorizes its business into three segments each with sub-segments;
SALES
% of
segment		 PROFIT
% of
segment
Specialty and Performance
     Coatings, Inks and Resins 26  
     Fibers 28  
     Fine Chemicals 15  
     Performance Chemicals 12  
     Specialty Plastics 19  
Core Plastics
     Container Plastics 62  
     Flexible Plastics 38  
Chemical Intermediates
     Industrial Intermediates    

1) SPECIALTY & PERFORMANCE SEGMENT

a. Coatings, Inks & Resins

Eastman supplies a wide variety of raw materials and intermediate products to the coatings, inks, and resins markets, including solvents, alcohols, glycols, and resins.

All of the Company's coatings, inks, and resins products are currently produced in the United States with a majority of 1997 sales being in the United States and the remainder worldwide.

Most of the products in this area are olefin or cellulose derivatives and utilize the Company's proprietary oxo chemistry technology or chemicals-from-coal technology. Products include mixed cellulose esters, of which the Company is the world's only manufacturer.

b. Fibers

Eastman has been a producer of high-quality cellulose acetate fibers and yarns since 1931.

Eastman is one of the world's largest suppliers of cellulose acetate tow, a product developed by the Company in the 1950's that is used by our customers primarily in the manufacture of cigarette filters. With approximately 400 million pounds of annual capacity at its plants in Kingsport, Tennessee, and Workington, England, the Company accounts for approximately 30% of the annual worldwide production of acetate tow, and sells to all major cigarette producers throughout the world.

The two primary raw materials used in the manufacture of acetate tow are cellulose (from wood pulp) and acetic anhydride. Eastman has developed the world's only commercial coal gasification facility to produce the latter. This facility reduces Eastman’s dependency on petrochemicals otherwise required for the manufacture of acetate tow.

Acetate yarn is produced by Eastman for the textile industry. This product line utilizes the Eastman’s basic cellulose technology core competence along with its large cellulose acetate manufacturing position to compete effectively.

c. Fine Chemicals

The Fine Chemicals Business Organization, formed in 1989.

Fine chemicals produced by Eastman are used in the manufacture of a wide variety

of products such as photographic products, home care products, and custom

chemicals.

Eastman is a leading producer of custom chemicals used in the manufacture of pharmaceuticals and agricultural chemicals, and of other products synthesized to customer specifications.

d. Performance Chemicals

Eastman produces a variety of additives for fibers and plastics, raw materials

for adhesives and sealants, food and beverage ingredients, and other performance

products. Fiber and plastic additives are used to impart specialized processing

and performance characteristics to polymers used in the production of a range of

fibers and plastics products.

Eastman produces raw materials for adhesives that are used in hot-melt and pressure-sensitive applications. Eastman is a manufacturer of natural and synthetic food-grade antioxidants that are used to enhance the stability and extend the shelf life of many products containing oils and fats. Eastman is the only U.S. producer of sorbates that are used as food and cosmetic preservatives because of their antimicrobial action. Eastman Chemical

also manufactures many other performance products for use in nutrition, cosmetic, textile and construction applications.

e. Specialty Plastics

Specialty plastics are produced by Eastman for value-added end uses, such as

toothbrushes, eyeglass frames, medical devices, electrical connectors, tools,

appliance housings, food and medical packaging, heavy-gauge sheeting, and

fabricated boxes.

The plastics supplied for these end uses include polyethylene, polyester/copolyesters, cellulosics, and alloys of two or more plastics combine to provide specific performance characteristics.

2) CORE PLASTICS SEGMENT

a. Container Plastics

Eastman is the world's leading supplier of polyester plastics, including

EASTAPAK polymers (PET), for packaging applications, with the majority of its

sales concentrated in North America, Europe, and Latin America.

The market for polyester plastics has experienced significant growth in recent years due to the substitution of these plastics for other packaging materials used in soft drink, food, and water containers.

Industry estimates indicate that PET consumption grew worldwide from 2.3 billion pounds per year in 1989 to approximately 8.9 billion pounds per year in 1997.

Capital expansion projects currently underway in the Netherlands and Argentina will add approximately 600 million pounds of additional PET capacity by the end of 1998. Overcapacity worldwide continues to pressure PET selling prices.

Eastman has developed proprietary polyester polymers that enable it to respond to specific customer design and performance requirements, and is a leader in the manufacture of recycled-content PET.

b. Flexible Plastics

Eastman manufactures a variety of plastics including polyethylene, cellulose

esters, and polyesters for applications such as film, extrusion coating, fibers,

tape, industrial strapping, and injection molding.

The polyethylene product line includes low density, linear low density, and medium/high density polymers. The markets for these polyethylene products are characterized generally as large volume with a large number of customers and suppliers.

In addition to polyethylenes, the Eastman’s strong core competency in cellulose esters and polyesters allows it to offer a wide range of differentiated high performance polymers in selected fiber and film markets.

3) CHEMICAL INTERMEDIATES SEGMENT

a. Industrial Intermediates

Industrial intermediate chemicals are produced based on the Company's oxo

chemistry technology and chemicals-from-coal technology. These products include

basic acetyl, oxo chemicals, and plasticizers, and are marketed to customers producing esters, polymers, industrial additives, agricultural chemicals, industrial intermediates, monomers and polymers, medical delivery equipment, and pharmaceuticals.



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Environmental Program

Eastman Chemical manages it’s operations according to the principles of Responsible Care (see Appendix A)

The Health, Safety & Environmental and Public Policy Committee of Eastman's Board of Directors reviews the Company's policies and practices concerning health, safety, and the

environment, and its processes for complying with related laws and regulations, and monitors significant related matters.

Eastman’s policy is to operate its plants and facilities in a manner that protects the environment and the health and safety of its employees and the public. The Company has made and intends to continue to make expenditures for environmental protection and improvement in a timely manner consistent with the foregoing policies and with the technology available.

In some cases, applicable environmental regulations, such as those adopted under the federal Clean Air Act and the Resource Conservation and Recovery Act, and related actions of regulatory agencies, determine the timing and amount of environmental costs incurred by the Company.

The Company's environmental protection and improvement cash expenditures were approximately $220 million, $175 million, and $150 million in 1997, 1996, and 1995, respectively, including investments in construction, operations, and development.

Eastman does not expect future environmental capital expenditures arising from requirements of recently promulgated environmental laws and regulations to materially increase the Company's planned level of capital expenditures for environmental control facilities.


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Near-term Expansion Plans

Eastman Chemical is increasing its international manufacturing presence by targeting a higher percentage of its annual capital expenditures for markets outside the United States.

The Company is building EASTAPAK polymers plants in the Netherlands and Argentina, with operational dates of 1998.

Construction is also underway on an additional plant in the Netherlands to produce purified terephthalic acid ("PTA"), a key raw material for the production of EASTAPAK polymers, with an operational date of 1998.

A newly constructed facility located in Kuantan, Malaysia, will produce 30,000 metric tons of copolyester when it becomes operational in 1998.

In addition, the Company has begun construction of a new oxo chemicals manufacturing complex in Singapore, with production expected in early 1999, and is studying the feasibility of forming a joint venture in Nanjing, People's Republic of China, to produce hydrocarbon tackifying resins


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Personnel

Board Chairman - Earnest W. Deavenport, Jr
Age 59. Joined the Company in 1960. Mr. Deavenport was named President of the Company in 1989 and also served as Group Vice President of Kodak from 1989 through 1993.

Vice Chairman - R. W. Bourne, Jr.
Age 60. Responsible for all business organizations. He joined the Company in 1959, was named Executive Vice President in 1989, and also served as a Vice President of Kodak from 1986 through 1993.

CEO - Earnest W. Deavenport, Jr
See description above.

CFO - H. Virgil Stephens
Age 60. Joined the Company in 1979. In 1988, Mr. Stephens was named Vice President, Financial and Information Services, became Vice President and Chief Financial Officer in 1993, and was appointed to his current position in 1996. Mr. Stephens has announced his retirement effective April 1, 1998.

President (Worldwide Sales) - Jack W. Lowe
No bio available

Exec. VP - R. W. Bourne
No bio available

Sr. VP - H. Virgil Stephens
See description above.

Sr. VP - Dr. James L. Chitwood
Age 54. Responsible for operations outside North America. Joined the Company in 1968, was named Senior Vice President of the Company in 1989, and Group Vice President, Specialty Business Group in 1991. Dr. Chitwood was appointed Senior Vice President with responsibility for Company business organizations in October 1994 and assumed his current responsibilities in 1996. He also served as a Vice President of Kodak from 1984 through 1993.

Sr. VP - Tom O. Nethery
See bio below

Sr. VP, Gen. Tech & Quality - Darryl K. Williams
Age 55. Mr. Williams joined the Company in 1965. He was appointed president of Eastman Chemical Japan Ltd. in 1992, was named Vice President, Asia Pacific Regional Support Services in 1993, was appointed Vice President, Asia Pacific Sales in 1994, and was named Senior Vice President, Technology in 1996. He assumed his current position in 1998.

Sr. VP, Gen. Counsel & Sec - Harold L. Henderson
Age 62. Joined the Company in 1997 as Senior Vice President and General Counsel. Mr. Henderson served previously as chief legal officer of The Firestone Tire & Rubber Company from 1980 to 1985 and of RJR Nabisco, Inc. from 1985 to 1989. He was a consultant, commercial real estate developer, and private investor from 1989 through 1996.

VP - Quality & Health/Safety & Environment - B. Fielding Rolston
Age 56. Mr. Rolston joined the Company in 1964 and was appointed Vice President, Customer Service and Materials Management of the Company in 1987. He assumed his current position in 1998.

VP & Gen. Mgr - Tom O. Nethery
Age 59. Responsible for functional organizations. Mr. Nethery joined the Company in 1960 and was named Senior Vice President, Manufacturing of the Company in 1989. He was named Group Vice President, Industrial Business Group in 1991 and was appointed to his current position in October 1994. Mr. Nethery also served as a Vice President of Kodak from 1989 through 1993.

VP & Gen. Mgr.- Communications & Public Affairs - Betty W. DeVinney
Age 53. Joined the Company in 1973. In 1991, she became Manager, Employment, was named Manager, Community Relations in 1995 and was appointed Manager, Corporate Relations in 1997. She assumed her current position in 1998.

VP & Comptroller - Patrick R. Kinsey
Age 52. Joined the Company in 1967, was named Director, Internal Auditing in 1993 and became Director, Corporate Financial Reporting in 1996. He assumed his current position in 1998.

VP Corporate Development & Strategy - A.R. Rothwell
Age 50. Assumed his current position in 1997. In addition to his current responsibilities, Mr. Rothwell will assume the position of Senior Vice President and Chief Financial Officer on April 1, 1998, upon the retirement of Mr. Stephens. Mr. Rothwell joined the Company in 1969 and was appointed Business Director, Industrial Intermediates in 1993. In 1994, he became Vice President and General Manager, Container Plastics.

VP & Gen. Mgr.- Coatings, Inks, & Resins - James E. Dickert

VP & Gen. Mgr.- Ind. Intermediates - Ed C. Horton

V.P. & Gen. Mgr.- Specialty Pkgng. Plastics - Dr. Gerald P. Morie

Mgr.-Fine Chemicals - Robert M. Morrow

VP-Supply & Distr - B. Fielding Rolston

V.P.-Corp. Devel. & Strategy - Jimmy E. Tackett

VP & Gen. Mgr - R.L. Johnson

VP & Gen. Mgr - J.A. Lewis

VP & Gen. Mgr - A.W. McCollum

Controller - Thomas W. Wilson.

Dir.-Mktg. Communications - Larry Snider


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US Manufacturing Locations

Eastman Chemical Co (HEADQUARTERS)
100 N Eastman Rd
Kingsport TN 37660
(423) 229-2000
(800) EASTMAN

Texas Eastman Co
Hwy. 149 at Kodak Blvd
PO Box 7444
Longview TX 75607
(903) 237-5000

Eastman Chemical
Alvin, TX

Arkansas Eastman Co.
PO Box 2357
Batesville AR
(501) 698-1811

Carolina Eastman Co
Highway 21 S
Columbia, SC 2902
(803) 794-9200

Distillation Products Industries
Eastman Chemical Company
2255 Mountain Rd. Blvd
Rochester, NY 14615
(716) 722-2905

Eastman Chemical
South Charleston, NC


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Manufacturing Locations Outside the US

Canada

Eastman Chemical Canada, Inc.
11 Allstate Parkway
Suite 430
Markham, Ontario L3R 9T8
CANADA
Fax: (905) 474-1610
Telephone:(905) 474-0101 Manager - Kenneth J. Collins

Europe

Regional Headquarters
Eastman Chemical, Europe, Middle East and Africa, Ltd
Tobias Asserlaan 5
2517 KC The Hague
NETHERLANDS
Fax: +31 70 370 1704
Telephone: +31 70 370 1711

Eastman Chemical B.V.
Customer Service Center
Weena 159-161
NL-3013 CK Rotterdam
NETHERLANDS
Fax: +31 010-2402-100
Telephone: +31 010-2402-111

Eastman Chemical Ectona, Limited
Siddick
Workington
Cumbria CA14 1LG
UNITED KINGDOM
Fax: +44 900-66421
Telephone: +44 900-603651

Eastman Chemical Co.
Llangefni, Wales

Eastman Chemical Co.
Hartlepool, England

Eastman Chemical España, S.A.
Polígono Industrial Guadarranque
Manzana 3
11369 San Roque
Cádiz
SPAIN
Fax: 34 56 585 222
Switchboard: 34 56 585 200

 

Latin America

 Regional Headquarters - Latin America
Eastman Chemical Latin America
2333 Ponce de Leon Blvd., Suite R-20
Coral Gables, Florida 33134
Fax: (305) 461-8254
Telephone: (305) 461-8240

Eastman Chemical Industrial de Mexico, S.A. de C.V.
Predio Buenavista del Torres
Rancho El Pipinaco
Apartado Postal No. 46
Cosoleacaque, Veracruz, 96340 Mexico
Fax: (52) 921-1-6043
Telephone: (52) 921-1-6040
(52) 921-1-6000

Eastman Chemical Co.
Zarate, Argentina
NOTE: The Zarate Manufacturing Site is under construction.

Asia Pacific

 Eastman Chemical, Asia Pacific Pte. Ltd.
#05-04 Winsland House
3 Killiney Road
SINGAPORE 239519
President - J. Brian Ferguson

Eastman Chemical (Malaysia) SDN. BHD.
Lot 118 & 119, Gebeng Industrial Estate
P.O. Box 12, Balok 26080
Kuantan, Pahang Darul Makmur
Malaysia
Fax: 609-583-8600
Telephone: 609-583-9696
Managing Director -David C. Brubaker
Plant Manager - Paul Gillenwater
NOTE: The Kuantan Manufacturing Site is under construction.

Eastman Chemical Hong Kong Ltd.
1-3 Wang Lok Street
Yuen Long Industrial Estate
Yuen Long, New Territories
HONG KONG
Fax: (852) 2474-0913
Telephone: (852) 2473-7188
General Manager - J. Ron Hilderbrand


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