(Bloomberg) -- Maybe think of it as a wearable cigarette.
No, not the tobacco part. Eastman Chemical Co. has found a way to rescue its business for acetate tow -- a fluffy white fiber used to make cigarette filters that's seen its fortunes sink along with smoking. But fiber is fiber, right? So why not use the stuff to make clothing?
Eastman researchers have figured out how to tweak the chemical process they use to transform wood pulp into acetate tow and turn it into textiles instead. Thus, Naia was born, Eastman's new material that performs like a synthetic fabric but has the comfort of natural fibers, according to the company. And since it's made from “renewable wood pulp," the chemical maker is pitching it as eco-friendly.
Naia is one of 50 new fibers the company commercialized last year as it seeks to boost a business that's been gutted by dwindling cigarettes sales. Just 15 percent of American adults now smoke, down from 42 percent in 1965. Revenue in Eastman's fibers business tumbled 42 percent in the past three years, driving a 44 percent plunge in profit for the unit last year.
“Textiles is a way to repurpose our tow assets for the cigarette market into new, better growth markets,” Chief Executive Officer Mark Costa said in a phone interview Tuesday. “Our real goal is not just to stabilize fibers but turn it into a specialty growth business.”
Eastman is counting on sufficient demand for new products like Naia to more than outpace faltering cigarette sales. It's forecasting 1 percent to 3 percent annual earnings growth from fibers through 2020. That's part of the company's goal to increase earnings 8 percent to 12 percent in the same period, Eastman said Tuesday.
--With assistance from Jennifer Kaplan
To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net.
To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren, Tony Robinson
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