Eastman Chemical To Close Workington Acetate Tow Manufacturing Site

(RTTNews) - Eastman Chemical Co. (EMN) announced that it has decided to close its Workington, UK, acetate tow manufacturing site. Production at the site will cease in April, and site closure is expected to be completed in the third quarter of 2015.

As previously indicated, Eastman entered the consultation process with employee and union representatives in response to changes in global market demand for acetate tow.

The Workington site has 24,000 metric tons of acetate tow manufacturing capacity. Projected savings from the closure are annual operating costs of approximately $20 million and a total of approximately $20 million of infrastructure capital expenditures planned for the next five years.

Eastman manufactures Estron acetate tow, which is a fibrous material downstream customers use to manufacture cigarette filter rods. Eastman will continue to manufacture acetate tow at its facilities in Kingsport, Tenn., and Ulsan, Korea. In addition, Eastman has a joint venture with China National Tobacco Company in Heifei, China.

The company noted that the action will result in shut down costs and restructuring charges totaling approximately $100 million primarily in the first half of 2015, approximately $80 million of which are non-cash.