KINGSPORT, TN - Eastman Chemical Company (NYSE:EMN) has announced plans to establish a second molecular recycling facility in Longview, Texas, marking a significant step in the company's expansion into the circular economy. The U.S. Department of Energy (DOE) selected Eastman for award negotiations for up to $375 million in funding, which will aid in the development of the new facility.
The Longview site was chosen for its compatibility with existing operations, energy supply, and its strategic location for accessing feedstock pools. The facility is expected to process approximately 110,000 metric tonnes of hard-to-recycle plastic waste annually, contributing to the reduction of waste in the region and supporting circularity in the materials economy.
Eastman's investment in Longview will not only increase the company's capacity for recycling but also bring economic benefits to the area. The project is projected to create over 200 full-time jobs and around 1,000 temporary construction jobs. This comes as an extension of Eastman's longstanding presence in Longview, where it has operated for over 70 years and currently employs more than 1,500 people.
The DOE's support aligns with the federal goal of fostering a low-carbon future, with Eastman's project demonstrating a significant reduction in carbon emissions for recycled PET. The company's technology is expected to achieve over 70% reduced carbon emissions compared to traditional fossil virgin production methods. Additionally, the project will feature the deployment of thermal heat batteries and onsite solar power to further decarbonize the production process.
Eastman's collaboration with the DOE also includes a community benefits plan, which involves renovating a community center for workforce training and development. The State of Texas has also provided substantial tax incentives, totaling approximately $70 million, to support the project.
Governor Greg Abbott of Texas praised the investment, highlighting the state's business-friendly environment and skilled workforce as key factors in attracting such projects. Eastman's CEO, Mark Costa, expressed gratitude for the support from the DOE and the state, emphasizing the company's commitment to the local community and its sustainable technology.
This Texas facility is part of Eastman's broader strategy to promote circularity in materials usage. The company has recently completed a molecular recycling facility in Kingsport, Tennessee, and has plans for another in France. Eastman's technology enables the transformation of waste plastic into high-quality materials suitable for food contact applications with lower greenhouse gas emissions.
The information regarding Eastman's new recycling facility and its funding is based on a press release statement.
InvestingPro Insights
Eastman Chemical Company (NYSE:EMN) is making headlines with its new molecular recycling facility, but what does the company's financial health tell us about its ability to undertake such ambitious projects? According to InvestingPro data, Eastman boasts a market capitalization of $11.56 billion, reflecting the significant size and stability of the company. With a P/E ratio of 13.02, the company is trading at a valuation that seems reasonable given its near-term earnings growth. Moreover, the company's dividend yield stands at a healthy 3.3%, a testament to its commitment to returning value to shareholders, as evidenced by its impressive track record of raising dividends for 14 consecutive years.
InvestingPro Tips highlight that Eastman's management has been actively buying back shares, a move that often signals confidence in the company's future prospects. Additionally, the stock has experienced a strong return over the last month, with a 15.13% total return, contributing to a 34.09% price uptick over the last six months. This robust performance is further underscored by the stock trading near its 52-week high, at 97.96% of the peak price.
With the company's next earnings date scheduled for April 25, 2024, investors may want to keep an eye on Eastman's financial performance and growth trajectory. For those looking to delve deeper into the company's prospects, InvestingPro offers additional insights and tips. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of information that includes a total of 12 InvestingPro Tips for Eastman Chemical Company. Visit https://www.investing.com/pro/EMN to explore these valuable resources.
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