Is Eastman Chemical scoping Texas City plant?

Chemical reaction? Neither company is returning phone calls, but rumors are flying that Eastman Chemical Co. has been kicking the tires at Sterling Chemicals’ Texas City plant as it considers an acquisition.

Houston-based Sterling produces plasticizers, which make products more flexible, along with acetic acid, used in making rubber, plastics and adhesives.

The 290-acre Sterling plant, 201 Bay St., has undergone big changes in recent years.

In July 2008, Sterling Chemicals cut as many as 50 of its 232 local workers after Nova Chemical Corp., Canada’s largest plastics producer, purchased control of the plant’s styrene production.

Citing a glutted market, Nova Chemicals paid $60 million to control the styrene production but did not buy plant assets.

In January 2009, Sterling announced it had laid off about 15 people after German chemical maker BASF terminated a lucrative agreement.

Terms of the agreement called for the Texas City plant to sell all its plasticizers to BASF. In exchange, BASF supplied Sterling with most of its raw materials and also marketed Sterling’s plasticizers, which are used to make plastics in everything from toys to medical devices to food packaging more flexible.

BASF was required to pay an early termination fee of $9.8 million. But Sterling also was required to make payments to BASF for the undepreciated portion of past capital expenditures made by BASF if Sterling did not permanently close its plasticizers production units by March 31. That amount is about $2.6 million.

But Sterling wants more time to decide the future of its Texas City plasticizers business.

On April 4, Sterling entered into another agreement in which it paid BASF about $800,000 in exchange for the right to make the decision by July 10, according to filings with the U.S. Securities and Exchange Commission.

Sterling Chemicals was founded in 1986 to acquire and operate Monsanto Co.’s petrochemical plant in Texas City.

Kingsport, Tenn.-based Eastman, which has 11 manufacturing plants around the world, traces its roots to World War I. George Eastman, founder of the camera and film company Eastman Kodak, wanted an independent supply of chemicals for his photographic processes.

The war had caused a scarcity of raw materials such as photographic paper, optical glass, gelatin and chemicals such as methanol, acetic acid and acetone.

Sterling Chemicals (SCHI: OTC), reported first quarter net income of $11.7 million on revenues of $26 million for the months ending March 31, compared with net income of $983,000 on revenues of $27 million the same period the year before.

Sterling, which again reduced its workforce in the spring, has about 200 employees, Texas City officials say. Stay tuned.

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Buffing out business: If you like good business news, this ought to get your motor running. TennisonHarborside Collision, 6601 Harborside Drive, reports it has tripled sales since reopening under a new owner.

The auto-body repair shop is on track to post about $3.5 million in revenues this year and has grown the number of employees to 22, manager Sam Mick said.

Mick attributes the growth to the restaffing of the University of Texas Medical Branch, which had laid off thousands after Hurricane Ike-driven storm surge flooded the island campus, and also more people returning to the island since 2009. But old-fashioned customer service goes along way, too, Mick said.

“Being island owned and operated and taking care of customers brought us to this level,” Mick said.

While some auto insurers have their own “direct repair shops,” customers often request Harborside Collision, Mick said.

In February 2009, David Tennison, whose family owns Tennison’s Collision Specialists in Houston, acquired the land and the shop from island-based car dealer Sand Dollar Autoplex, 7802 Broadway. The shop also does warranty work for all makes of cars Sand Dollar sells. Meanwhile, the shop has welcomed LynMorris, who has 50 years experience in estimating damage.

For information, call 409-741-2996 or visit www.tennisonharborsidecollision.com.

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Change of hours: Downtown island eatery Que Café, 408 20th St. has cut hours, opening now on Fridays, Saturdays and Sundays, when business is best, reports owner David Watson.

The restaurant serves up authentic tacos and other Mexican cuisine.

Que Café recently added a breakfast menu and new dishes, including shrimp cocktail with avocado chunks and cold chicken wraps pre-made to go for those who need to dash. For information, call 409-539-5241.

Biz Buzz appears Tuesdays and Thursdays. We welcome your tips and suggestions. Call 409-683-5248 or email laura.elder(at)galvnews.com.