Cabot to shut Indonesia carbon black plant

Boston, Massachusetts – Cabot Corp is closing down its carbon black manufacturing facility in Merak, Indonesia, with operations set to cease by the end of January 2016, the company announced 12 Nov.

The shut-down, will affect approximately 50 local employees and was driven by the Merak facility’s financial performance over the past few years.

“Despite efforts to be competitive, the facility has suffered from low utilisation rates,” said the press release.

According to Cabot, the move is part of a wider restructuring plan to consolidate the company’s manufacturing footprint in Asia Pacific.

The goal is “to ensure that we are operating as efficiently and effectively as possible to become more competitive in a challenging environment,” said Sean Keohane, president, reinforcement materials segment.

“We will consolidate production in Asia by ceasing production at our Merak facility and using our Cilegon, Indonesia as well as other Asian and global carbon black production sites to meet the regional demand,” he added.

Cabot however, stressed that Indonesia remained a “strategic country” for its carbon black business.

“Its tire manufacturing industry supplies growing local and global demand,” said Cabot, adding that it was engaging with customers on how to meet their needs during and after the shutdown.

Cabot expects the closure plan will result in a pre-tax charge to earnings of around $33 million (€30.7 million) but deliver annual savings of around $8 million.

Cabot announced earlier in October that it was cutting 300 jobs across its global operations in a bid to save $50 million in its 2016 fiscal year.