Cabot on expansion campaign

ERJ staff report (R&PN)

Boston, Massachusetts -- Cabot Corp. is in the midst of major global carbon black expansions at several plants aimed at boosting its presence in some of the fastest growing regions in the world.

It also has launched fumed silica and masterbatch projects in Wales and China that will upgrade its production base in Europe and Asia.

Cabot is investing $180 million in the next two years to expand its carbon black capacity at three facilities in Europe and at plants in Argentina, Brazil, China and Indonesia, a company spokes¼man said.

Its annual global carbon black output will be boosted by about 15 percent, or more than 300,000 metric tons, when the expansions are complete in 2013.

The growth projects include:

• increasing capacity about 20 percent at the firm's South American operations in Brazil and Argentina;
• boosting its capacity 10 percent in Europe via debottlenecking actions; and
• expanding two plants in Cilegon and Merak, Indonesia, to raise capacity 50 percent.

Its biggest move is being made in China. Subsidiary Cabot (China) Ltd. has entered into a joint venture with Risun Chemicals Co. Ltd., a subsidiary of Risun Coal Chemicals Group Ltd., that is building a state-of-the-art carbon black plant in Xingtai.

Once commissioned in 2013, the factory will produce about 130,000 tons of carbon black annually with the potential to expand that figure to 300,000 tons, the spokesman said.

The new plant will employ advanced emissions control technology and energy recapture.

Boston-based Cabot owns a 60-percent equity interest in the venture. The facility will enable the company to make products not readily available in China, said Dave Miller, Cabot executive vice president.

The global producer of specialty chemicals and performance materials is making the $180 million investments in support of the firm's long-term strategy to grow in emerging markets, President and CEO Patrick Prevost said in a prepared statement. “We already have a strong presence in many of the fastest growing regions in the world. These investments will further accelerate our growth.”

He said that the need for carbon black is increasing worldwide.

“Mobility and transportation of goods is growing dramatically in developing countries around the world,” Prevost said. “As a result, the global demand for tyres is expected to increase by 5 to 10 percent annually over the coming 10 years in these developing countries.

“Tyre manufacturers need reliable partners to help them grow in these regions. Cabot is committed to being this kind of partner to our customers.”

Miller said the expansions will help solidify the firm's long-standing position as the worldwide leading provider of carbon black, noting that with the new investments, “we're taking action to help our customers grow anywhere in the world.”

Customers' needs have shifted toward higher performance grades of carbon black, he said, especially in Europe, and the firm's latest moves will help address those requests.

Cabot's total revenue-which was about $2.4 billion, up from $2.1 billion, in the first nine months of fiscal 2011-“is balanced across all regions,” according to the spokesman. “It's an even split.”

But the needs of customers in Asia, South America and parts of Europe for Cabot's carbon black are increasing, he said, so “we're expanding aggressively in those areas.” The market in North America is pretty mature, he said, but the firm has a strong presence there, and there currently isn't a major need to add capacity.

“We follow our customers where they want to grow,” the spokesman said.

Other projects

Meanwhile, Cabot will expand production at its fumed silica facility in Barry, Wales, by about 25 percent as part of a three-year plan to boost the firm's global production base and its presence in Europe.

An extension of Cabot's long-term partnership with Dow Corning Corp., the expansion is expected to be completed in 2012 and is aimed at increasing the company's fumed metal oxide capacity by 35-40 percent.

Dow Corning and Cabot have worked closely in Barry since 1991 when Cabot built a fumed silica facility adjacent to Dow Corning's silicone monomer plant.

The company provides Cabot with silanes, which are converted to fumed silica for Dow Corning's compounded silicones applications.

The two companies have a similar relationship in Midland, Mich.

In addition, the company recently completed construction of a black masterbatch plant at its Tianjin, China, complex. Cost of the project was put at about $20 million, the spokesman said.

The factory initially has capacity of about 45,000 tons with space available to expand output to 80,000 tons in the future, he said.

Demand for masterbatch in China and throughout Asia is growing rapidly, according to Sean Keohane, vice president and general manager of Cabot's Performance Segment.

From Rubber & Plastics News (A Crain publication)