The global plastic waste challenge has found a formidable opponent in the alliance formed between the Eastman Chemical Company (EMN) and Rumpke Waste & Recycling. Addressing the issue head-on, Rumpke is set to commence the collection and sorting of hard-to-recycle and colored PET packaging waste in the coming year. These materials, often disregarded in today’s recycling ecosystem, will see a fresh lease of life as they become feedstock for Eastman’s molecular recycling process.
New Life For Old Plastics
Eastman’s groundbreaking molecular recycling technology will work its magic, transforming this waste stream into high-quality polyesters that can be used in a variety of packaging applications. Together, they are expanding the circular economy for polyesters and creating a new market for difficult-to-recycle colorful and opaque waste that has been previously overlooked.
Revolutionizing Consumption
The colored and opaque PET finds its way into various consumer applications, including personal care and cosmetic packaging, detergent and soap packaging, as well as dairy and food packaging. What makes this collaboration stand out is its capacity to enable circularity in these diverse applications, historically resistant to adopting entirely circular packaging. By diverting this material from incineration or landfill, Eastman and Rumpke are making significant strides towards their shared goal of a waste-free planet.
Industry Gains
The relationship between Rumpke and Eastman showcases the potential for innovation to save fossil fuels and pave the way for a more sustainable future. This partnership sets the bar for the industry and underscores the value of collaboration in achieving full circularity.
Q4 Outlook and Beyond
On its fourth-quarter call, Eastman stated its expectations for a volume increase due to the absence of client inventory destocking in its end markets. A notable exception is the continuing destocking in medical and agriculture, expected to persist in the first quarter of 2024. Anticipating a minor primary demand increase in several stable end industries and steady discretionary end markets, the company foresees gains from the revenues and earnings generated by its Kingsport methanolysis facility. With all these elements in mind, Eastman expects its 2024 EPS to range between $7.25 and $8.00, with cash from operations of around $1.4 billion.
Key Industry Insights
Eastman currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the basic materials space include Cameco Corporation (CCJ), Carpenter Technology Corporation (CRS), and Alpha Metallurgical Resources Inc. (AMR). Cameco, boasting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 188% for the current year. Meanwhile, Carpenter Technology has consistently outperformed the Zacks Consensus Estimate, delivering an average earnings surprise of 12.2% in the past year.
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Conclusion
As businesses gear up to reach their recycled content targets, collaborations like the one between Rumpke and Eastman are testament to the impactful synergy between molecular and mechanical recycling. This partnership is set to keep more raw materials in the circular economy, signaling a positive trend for environmentally conscious investors and businesses seeking to make a meaningful difference.
