Eastman highlights circular economy growth and innovation
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Eastman highlights circular economy growth and innovation

The company expects to generate an incremental $75 million–$100 million of EBITDA contribution in 2025 compared to 2024 from the Kingsport methanolysis facility

  • By ICN Bureau | November 22, 2024

Eastman Chemical Company hosted investors and analysts at its headquarters in Kingsport for its 2024 Circular Economy Deep Dive.

During the event, attendees toured Eastman’s methanolysis operations and learned more about the company’s innovative and sustainable materials. Following the tour, executives provided an update on Eastman’s innovation-driven growth strategy, including financial projections for its circular economy initiatives.

Eastman’s Board Chair and Chief Executive Officer Mark Costa kicked off the event by reiterating the company’s unwavering commitment to its innovation-driven growth model. "Our key strategic themes remain unchanged since 2021,” said Costa. “We have remained committed to investing in our innovation-driven growth strategy, including our circular economy platforms, despite prolonged economic weakness. Our investments have resulted in strong financial performance relative to our peers. We continue to make great progress on our circular initiatives and have confidence that this new vector of growth will create value for years to come.”

Eastman is leveraged to a macroeconomic recovery and expects to generate significant EBITDA growth through its circular economy initiatives. The company projects that it will generate:

* greater than $2.1 billion of EBITDA and approximately $1.6 billion of cash from operations in a normalized macroeconomic environment before the benefit of circular investments, and

* additional EBITDA of >$500 million by 2029 through its circular initiatives:

>$350 million of EBITDA from Kingsport, Tenn., and Longview, Texas, methanolysis projects, and

$150 million–$200 million of EBITDA from its cellulosic biopolymer platform

The company also said it expects to generate an incremental $75 million–$100 million of EBITDA contribution in 2025 compared to 2024 from the Kingsport methanolysis facility.

To achieve these circular platform EBITDA targets, the company expects to continue to invest in organic growth for the next several years. Capital expenditures in 2025 are expected to be approximately $800 million. In 2026 and 2027, capital expenditures are expected to range between $800 million and $1 billion.

Executive Vice President and Chief Financial Officer Willie McLain stated, “The company is in a solid financial position. Our base businesses are strong and leveraged to an economic recovery. Our circular economy initiatives add to that strength, making Eastman an attractive growth opportunity not just for today, but for the foreseeable future.”

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