US chemical producer Eastman has begun mandatory consultations with its UK trade unions about a plan to close its 30,000 t/y acetate tow plant at Workington.
The group based at Kingsport, Tennessee in the US said it is considering closing the site in response to changes in global market demand for acetate tow, in particular overcapacity for the fiber used in cigarette filters.
"With recent and announced global acetate tow manufacturing capacity additions, we need less capacity to supply our customers," said Linda Hensley, vice president and general manager of the Fibers segment.
Eastman "remains committed to reliably supplying all customers with top quality products during and following the consultation process," Hensley added.
With a global manufacturing capability of 210,000 t/y for acetate tow, which it sells under the "Estron" trademark, Eastman also operates plants at Kingsport and at Ulsan, Korea. The Workington facility accounts for about 11% of its total capacity.
In presenting its 2014 financial results last week, Eastman said sales revenue of its Fibers division increased only slightly, to $1.46 billion, as higher acetate tow selling prices and higher acetate flake sales volume to its China tow joint venture were largely offset by lower acetyl chemicals sales volume.
Divisional operating profit increased by 2.6% with higher selling prices more than offsetting the lower sales volume and higher unit costs resulting from reduced acetate tow capacity utilization rates.
