Eastman Chemical Company, Yangzi Petrochemical Industrial Corporation study possible joint venture.

KINGSPORT, Tenn.--(BUSINESS WIRE)--Oct. 18, 1996--Eastman Chemical Company and Yangzi Petrochemical Industrial Corporation have signed a letter of intent to study the feasibility of forming a joint venture in the People's Republic of China.

The companies are considering building two plants in Nanjing, China, one to produce hydrocarbon tackifying resins and the other to manufacture sorbates.

Citing strong global demand for the products, the companies said the proposed joint venture would serve China and other parts of the world. The companies did not reveal a target date for a decision nor other details of the possible joint venture.

"Yangzi Petrochemical Industrial Corporation has the raw materials for these products and is in a strategic location for supplying both the Chinese and global marketplace," said J. Brian Ferguson, Eastman's managing director of Greater China.

Yangzi Petrochemical Industrial Corporation is a subsidiary of SINOPEC Yangzi Petrochemical Corporation (YPC) in Nanjing, Jiangsu Province. Formed in 1983, YPC is one of the five largest petrochemical companies in China.

Eastman, fifth largest publicly held chemical company in the United States, supplies Eastotac hydrocarbon resins used by adhesives manufacturers to produce hot melt adhesives for packaging, tapes, labels and in nonwoven assembly. Demand for hydrocarbon resins is expected to increase rapidly as the packaging and personal care markets grow in Asia.

Sorbates inhibit the growth of a wide spectrum of microorganisms that can attack foods ranging from dairy and bakery products to meat and fish products and to fruit products and beverages.

"The market for food preservatives in China has huge potential as lifestyles and eating habits change, especially in the more prosperous coastal areas," said Anthony W. McCollum, vice president and general manager of Eastman's Performance Chemicals business, which markets food ingredients.

In addition to sorbates, other food ingredients from Eastman include Tenox food-grade antioxidants; a citrus oil emulsion stabilizer, SAIB-SG, used widely in the beverage industry; and a wide range of food-grade chemicals such as acetic acid and triacetin.

Eastman, a producer and marketer of chemicals, fibers and plastics, entered the Chinese market in the late 1970s. In 1995 China accounted for a significant part of Eastman's US$557 million sales in the Asia Pacific. Worldwide, Eastman sales were US$5 billion. Eastman produces sorbates at a facility in Alvin, Texas, and hydrocarbon resins in Longview, Texas.

Eastman employs about 275 people in its Asia Pacific region, about 18,000 worldwide, and maintains its regional headquarters in Singapore. World headquarters is in Kingsport, Tenn., U.S.A.

YPC produces chemical and fiber intermediates and plastics based on an ethylene manufacturing plant with an annual capacity of 400,000 metric tons and an aromatic hydrocarbon manufacturing facility with an annual capacity of 640,000 metric tons which is soon to be expanded to 850,000 metric tons. -0-

Note to editors: Eastotac and Tenox are trademarks of Eastman Chemical Company.

CONTACT: Eastman Chemical, Kingsport

Tom Dickens, 423/229-3149 (Office) or

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