Eastman's Kingsport, Tennessee recycling facility operating at around 70% rates: CEO

Eastman Chemical Company's Kingsport, Tennessee facility -- the world's largest polyester molecular recycling facility -- is operating at around 70% rates when running all units together, chief executive officer Mark Costa said during the company's earnings call July 26.

The plant uses methanolysis process to break down hard-to-recycle polyethylene terephthalate waste to its molecular building blocks to create virgin-quality resin for packaging applications and other polyesters.

"The limitations in run rates through the first half of the year have been more mechanically related or sort of feedstock processing-related issues" Costa said.

According to Costa, the mechanical issue had to do with moving product from the middle of the plant to the back of the plant. The feedstock processing issues had to do with feedstock preparation and some of the fitness-for-use aspects of a few sources of material.

"The changes we've already made on how to prepare that material before we put it in the plant have sort of addressed the recent plugging issues," Costa said.

"With the implemented improvements, that should get us sort of 90-plus percent range in how we can run the plant," he said.

The company is planning a similar facility in Normandy, France, as well as in Longview, Texas.

France, Texas projects

Regarding the France project, Costa said it is moving along a bit slower than we originally expected. "Predominantly due to these customer contract conversations that we've had being slower than what we had expected originally," he added.

"But to be very clear, we're sticking to our model which is on the PET side, if we don't get these long-term take-or-pay contracts as we did get with Pepsi, we will not build the French project," Costa said.

On the Texas project, Costa said the company was really proud to have Pepsi as a large contracted and committed partner, and that combined with the DOE grant(opens in a new tab) helping offset capital inflation, it made Eastman feel great about that project.

Platts, part of S&P Global Commodity Insights, last assessed US recycled polyethylene terephthalate food-grade pellets July 26 at 71.5 cents/lb FOB Los Angeles compared with imported virgin resin last assessed July 24 at 65.5 cents/lb DDP US West Coast.