MUMBAI, India, and Kingsport, Tenn., U.S.A.,- 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

Essar Global is an international conglomerate operating in six business areas - steel, oil & gas, power, telecom & BPO, shipping and construction with an asset base in excess of US $ 6 billion. It has over 50 representative offices world-wide and employs approximately 15,000 people.

Essar Chemicals Limited is a part of Essar Global Limited and will be the vehicle to enter the value added chemicals business. The Company 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. Founded in 1920 and headquartered in Kingsport, Tenn., U.S.A., Eastman is a FORTUNE 500 company with 2005 sales of $7 billion and approximately 12,000 employees. For more information about Eastman and its products, visit www.eastman.com.

Contact :