Eastman Chemical

SCOPE OF SERVICES

- Site selection project for the world’s largest PET resin plant, a $1B investment

- Ton-center network analysis, preliminary screening of over 40 initial prospect sites

- On-site logistics due diligence at 12 semi-finalist sites in four states

- Carrier negotiations, detailed cost analysis, site layout engineering at two finalist sites

SITUATION DESCRIPTION

Already the market leader in polyethylene terephthalate  resin, Eastman Chemical developed a new proprietary manufacturing technology that would allow the production of PET resin with significantly lower energy and labor costs.  Project V was initiated in order to select the site of a brand new PET plant, which would become the world’s largest at an annual capacity of 1.7 billion pounds.  Logistics was a top criteria for the site selection process in order to fully capitalize on the potential of the new manufacturing technology.

PLG ACTION & RESULTS

- Combined raw material logistics costs, demand forecast data, site operating costs, and finished goods transportation costs to develop a logistics cost model for each prospective site

- Performed on-site logistics due diligence at 12 semi-finalist sites, including cost and risk analysis of rail routes and service, highway access, pipeline access, and port facilities;  uncovered hidden risk exposures within transport modes and prospective service providers

- Negotiated advantaged rates, service commitments, and capital investments from logistics providers as a condition of site selection

- Designed and engineered optimized site logistics plan and transportation infrastructure for new plant, including rail access and storage, loading racks, port access, and roadways