TURNING AROUND POLYESTER RESIN

Abstract

THE EXPERIENCE of the North American polyethylene terephthalate (PET) industry in recent years shows that companies can manufacture a great product and enjoy robust growth but still not make much in the way of profits. PET is clear, has strong gas-barrier properties, and is readily recycled. Over the past two decades, few, if any, polymers have posted such strong growth. And yet some PET producers have lost money, as Eastman Chemical did from 2007 to 2009. One company, Wellman, even filed for bankruptcy in 2008. The problem was that as fast as demand grew, PET producers added new capacity even faster. Now, as the market matures, producers can no longer count on strong growth. In fact, demand actually declined in the recessionary years of 2008 and 2009. The years of expansion have given way to a period of consolidation and capacity removal, thereby setting the stage for sustained profitability of the surviving players. Eastman, once ...