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JULY 2005

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Expanded Bonus Web Edition CHINA SPOTLIGHT



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    In February 2005, Warmack, active in the Asian marketplace for Eastman since 1990, was appointed vice president and general manager for
Qilu Eastman is Eastman Chemical Co.'s second joint venture to get off the ground in China, and will supply texanol ester alcohol and TXIB plasticizer.
Eastman Chemical Co.'s coatings, adhesives, specialty polymers and inks business. In an interview, he says the site selection process was really a business and partner selection process.
      "The products we produce in Qilu are derivatives of an olefin stream," he explains. So plugging into a partner's already-existing olefin stream was the chief site determiner. The project came in under budget and ahead of schedule, says Warmack, and has already generated follow-up investment discussions in the zone. Asked how industrial infrastructure and land laws affected the project's progress, Warmack reiterates that the partner selection process took care of many of those concerns. For instance, raw materials feedstock was a key component of the JV.
      Unlike Eastman's first JV, where land rights were negotiated with the government, in this case the company was able to "tack on" to the land agreements already cemented by Qilu. But Warmack says the steel and concrete shortages can be a challenge if a company is going to construct a new site, not to mention the fact that fabricating shops for making items like heat exchangers are booked solid.
      Warmack goes on to explain that for a chemical plant, the key labor criterion is quality, not cost: "Finding and retaining good peoople is one of the top things on my list for anything we do."
      "Another key issue would be their health, safety and environment performance," he says. "For Eastman, if someone fails there, it would be a project killer. In addition to business considerations, you have a corporate reputation at risk."
      Environmental leadership was another quality Eastman brought to the table. "We worked with the Chinese environmental protection agency and provided technical support on testing technology and how to evaluate," says Warmack. Now Eastman is one of only two chemical companies to have a green label environmental certification in China.

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