Cabot announces plant closure, rationalisation as earnings fall

Boston, Massachusetts — Cabot Corp. has flagged further rationalisation of its carbon black footprint in South America and Europe after reporting a sharp drop in Reinforcement Materials earnings for the second quarter of fiscal 2026, ended 31 March. 

In a 6 May statement to ERJ, Cabot said the actions were part of its ongoing strategic review of its global manufacturing footprint and  aimed at better aligning production capacity with evolving market conditions.

As part of this effort, Cabot said it had decided to cease operations at its reinforcing carbons manufacturing facility in Campana, Argentina.

This decision, it said, "follows a thorough evaluation of multiple alternatives and reflects structural changes in the region’s tire and automotive markets."

Cabot said it will consolidate production across its global network to create a more efficient manufacturing footprint while continuing to "reliably supply customers in Argentina and other markets."

According to its website, the Campana plant manufactures carbon blacks for elastomer reinforcement for the tire and industrial rubber product industries, as well as speciality carbons for plastics, inks, coatings and a variety of other applications.

Separately, Cabot also announced its intention to cease production on multiple manufacturing lines at its carbon black facility in Botlek, The Netherlands.

This proposed action is subject to local works council consultation processes, and no final decision has been made at this time, Cabot cautioned.

The Botlek facility also produces both rubber and speciality carbon blacks.

Cabot did not clarify which production lines will be closed but stressed that it is committed to supporting its employees throughout the processe.

The Boston-based supplier saw its rubber reinforcement segment post a weak second quarter, with earnings (EBIT) down 29%, or by $38 million (€32 million) year-on-year to $93 million.

Segment sales fell 8.4% to $544 million, Cabot reported 5 May.

The company attributed the decline mainly to “lower gross profit per tonne, primarily due to lower pricing and product mix” in 2026 tire customer agreements, as well as “increased competitive intensity in Asia Pacific.”

Volumes rose 3% compared to the same period last year, with growth recorded across all regions. Asia-Pacific volumes increased 5%, EMEA rose 3%, and the Americas edged up 1%.

Chief executive Sean Keohane said the results reflected a difficult operating environment.

The company, he said, continued “to operate at a high level in a challenging environment,” citing “disciplined execution… particularly in commercial and operational excellence.”

Cabot also signalled further restructuring within the segment, as part of wider efforts to align capacity with demand.

The group “intends to target capacity rationalisation at facilities in South America and Europe,” Keohane said.

The measures, he said, are expected to “better align production with demand conditions and enable a more efficient manufacturing network.”

The actions are projected to deliver “annualised fixed cost savings of $22 million once fully implemented.”

Looking ahead, the company expects demand conditions to remain broadly steady in the near term but flagged rising uncertainty.

“While we expect near term demand to remain stable, we are cautious of potential changes in demand levels towards the end of the fiscal year due to disruptions from the Middle East crisis,” Keohane said.

The company expects to maintain its margins "with price increases to offset higher input costs.”

Keohane said Cabot would continue to focus on “commercial excellence, cost management, and the asset rationalisations previously mentioned (ERJ report).”

The company, he added, remains “well positioned to manage near-term pressures, including elevated energy costs and geopolitical uncertainty.”