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Eastman Expanding Heat Transfer Fluid Capacity

Zacks Equity Research

Eastman Chemical Company (EMN) has announced its plans to expand capacity for its Therminol heat transfer fluids. Based in Newport, Wales, the plant expansion will be a new manufacturing facility capable of producing Therminol 66 and other biphenyl based co-products.

The facility is expected to come online by the second half of 2014 and also increase Eastman Chemical’s total capacity for Therminol 66 by more than 50%. With the expansion, Eastman Chemical will be able to meet the demands of its heat transfer fluid customers by providing a continuous supply of its flagship Therminol 66 product.

Therminol heat transfer fluids are synthetic fluids used for indirect heating and cooling of chemical processes.  The fluids may also be used as raw materials or as process solvents in chemical applications. Therminol 66 is the most widely used liquid-phase high temperature heat transfer fluid in the world. It delivers important functions like high thermal stability, high degree of customer satisfaction, reliability and fouling resistant.

Eastman Chemical should benefit from increased capacity additions. The company is also making progress in its growth initiatives through its joint venture in China for a 30,000-ton acetate tow manufacturing facility, which is expected to come online in third quarter 2013.

Eastman Chemical’s diversified chemical portfolio along with its integrated and diverse downstream businesses remain its strength. It also benefits from business restructuring and cost-cutting measures.

Eastman Chemical reported mixed first-quarter 2013 results in Apr 2013, with adjusted earnings, topping the Zacks Consensus Estimate but sales missing the same. Revenues rose at a healthy double-digit clip, driven by the contributions of the Solutia acquisition. The company reaffirmed its earnings guidance for the full year.

Eastman Chemical currently maintains a Zacks Rank #3 (Hold).

Other companies in the chemical industry with favorable Zacks Rank are Arkema S.A. (ARKAY), Cytec Industries Inc. (CYT) and FMC Corp. (FMC). All of them retain a Zacks Rank #2 (Buy).

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