Eastman to add two plants in Kuantan
SINGAPORE: Eastman Chemical Co, the biggest coal-to-chemicals producer in the United States, will expand production in Malaysia to benefit from cheaper natural gas.
The company plans to add two new plants at its site in Kuantan to become its biggest integrated site in Asia, said Mark Costa, president of the Kingsport, Tennessee-based company, in an interview.
"Next year, we hope to start construction of new plants for insoluble sulfur, which is used for vulcanising rubber, and polyvinyl butyral resin, which goes into safety glass," Costa said yesterday. "We see great growth in China. Of course, it's the biggest market but we also see opportunities to grow in Southeast Asia."
Eastman last year acquired Solutia Inc, a specialty chemicals producer with manufacturing sites in countries including Japan, China and Malaysia, for US$3.4 billion (RM10.8 billion).
Malaysian energy subsidies mean that natural gas costs about US$4.50 a million British thermal units, Costa said, compared with forecast spot prices of about US$20 a million British thermal units, a Bloomberg survey showed.
"Malaysia is a great location for us," Costa said. "It has a very competitive energy cost; natural gas prices are quite low."
The company will soon begin construction on its joint venture hydrogenated resins plant in Nanjing, China, that will boost capacity by 50,000 tonnes a year, Eastman said. Bloomberg