Eastman Chemical Co. plans to build what officials said will be one of the world's largest plastics-to-plastics molecular recycling facilities.
Construction on the project will begin by the middle of 2021 at Eastman's headquarters site in Kingsport, Tenn. Mechanical completion is expected to be done by the end of 2022, officials said on a Jan. 29 conference call announcing fourth-quarter and full-year results.
Eastman will spend a total of $250 million on the project in 2021 and 2022. The firm's return on invested capital for the facility is expected to be more than 15 percent.
The plant will be able to use low quality and low cost feedstocks, with the product mix upgraded over time, officials said. The project then will be able to produce 330 million-440 million pounds of polymers per year.
Eastman officials expect the firm's molecular recycling initiatives to contribute more than $600 million of new business revenue in the coming years. Companywide, Eastman plans to use more than 550 million pounds of plastic waste by 2025 and more than 1 billion pounds by 2030.
"We will not move forward with a technology that does not have a better carbon footprint," officials said. "Eastman can help enable a circular economy while making an attractive return on our investment."
Like many other firms, Eastman's 2020 results were affected by the COVID-19 pandemic. Total sales for the year were down almost 9 percent to $8.5 billion, as profit slipped almost 36 percent to $489 million.
Eastman's Advanced Materials unit, including Tritan-brand copolyester, fared slightly better, with full-year sales down about 6 percent to $2.52 billion. The unit's earnings before interest and taxes were down about 17 percent to $427 million.
"Despite unprecedented challenges related to COVID-19, our financial performance in the fourth quarter and for the full year demonstrates the resilience of our people and our portfolio," Chairman and CEO Mark Costa said in a news release.
He added that Eastman enters 2021 "having delivered record fourth-quarter 2020 adjusted earnings per share and strong free cash flow, as the global economy continues to recover."
Costa also said that Eastman "still faces uncertainty due to COVID-19 as we move forward into 2021. … In this uncertainty, I am incredibly proud of how our team is focused on what we can control, starting with growing new business revenue by leveraging our innovation-driven growth model."
On Wall Street, Eastman's per-share stock price bottomed out near $41 in mid-March amid uncertainty caused by the pandemic. It then recovered strongly as much of the market did and closed at just under $100 on Jan. 28.