Essar and Eastman Announce Memorandum of Understanding for Joint Oxo Project.

KINGSPORT, Tenn. and MUMBAI, India -- Essar Chemicals Ltd., part of India's Essar Group, and Eastman Chemical Company (NYSE: EMN) have announced the signing of a memorandum of understanding and the completion of a joint feasibility study regarding potential opportunities for the production of oxo and oxo derivatives for the domestic market in India.

Anshuman Ruia, director, Essar Group, said "Essar Group is firmly on the path of expanding value chain in all their businesses, and entry into this business would further enhance potential of Essar Oil's refinery from where main feedstock propylene will be supplied for oxo and oxo derivatives complex. Joining hands with Eastman, one of the most innovative companies in the world, to implement this project is the first step in the value chain integration of Essar's refining business. We look forward to the establishment of a world-scale oxo chemicals plant at Essar's refinery site at Vadinar."

According to Robert J. Preston, vice president and managing director of Eastman's Asia Pacific Region, and Harish Davey, managing director for the company's business in India, working with Essar on this project offers the company a unique opportunity to leverage an attractive, integrated feedstock supply position. "This relationship with a great partner will enable us to expand our presence in India's domestic market," Preston said. "We have the oxo and oxo derivatives technologies, and Essar has refinery products upstream of oxo processes at a significantly advantaged cost. The combination will ensure that the investment secures the margins we need. We're looking forward to jointly undertaking this project to enhance each other's businesses in this growing economy."

The feasibility study includes plans for a 150,000 tons per year oxo aldehyde plant and its derivatives. Oxo and oxo derivatives are part of Eastman's performance chemicals and intermediates segment. These intermediates are used to manufacture a variety of end-use products such as coatings and paints, solvents and plasticizers.

About Essar Group

Essar Group is one of the fastest growing business groups in India. The Group's businesses span the core and infrastructure segments of the economy - steel, oil and gas, power, mobile telecom, shipping and construction. The Group has an asset base of

$6 billion and has approximately 20,000 employees. Essar Chemicals Limited is part of Essar Global Limited, an investment arm of Essar Group. This company will be a vehicle to enter into value added chemicals business and is currently evaluating various options available based on feedstock streams from Essar Oil Limited's refinery at Vadinar, near Jamnagar in Gujarat.

About Eastman Chemical Company

Eastman manufactures and markets chemicals, fibers and plastics worldwide. It provides key differentiated coatings, adhesives and specialty plastics products; is the world's largest producer of PET polymers for packaging; and is a major supplier of cellulose acetate fibers. As a Responsible Care[R] company, Eastman is committed to achieving the highest standards of health, safety, environmental and security performance. Founded in 1920 and headquartered in Kingsport, Tenn., U.S.A., Eastman is a FORTUNE 500 company with 2006 sales of $7.5 billion and approximately 11,000 employees. For more information about Eastman and its products, visit www.eastman.com.