Cabot to close plants as carbon black demand falls 29 percent

ERJ staff report (DS)

Boston, Massachusetts -- Cabot Corp., the world's largest carbon black producer -- has said it will, "close four of its manufacturing operations and one regional office. In addition, Cabot plans to mothball assets at two sites, implement short worktime at one site and delay the start-up of new capacity in China." The company did not specify which plants or which product areas would be affected.

The Company has already instituted hiring, travel and salary freezes, reduced capital spending plans by $50 million from fiscal 2008 levels, eliminated 300 contractor positions and reduced corporate costs.

The announcement coincided with the company's first quarter results. Cabot said contract lag -- high selling prices while raw materials costs were falling -- helped its rubber black business to increase profits. A year ago the reverse effect had negatively affected profits. The unit showed sales down to $399 million for the three months to 31 Dec. compared to $410 million a year ago. Operating profits for the rubber blacks division grew to $22 million, from $16 million a year ago.

Cabot reported significantly lower demand for carbon black in all regions in the tyre and automotive industries and customer de-stocking. Volumes declined by 29 percent globally- North America decreased 22 percent; South America decreased 40 percent; the Europe, Middle East, Africa region decreased 29 percent; Asia Pacific (excluding China) decreased 26 percent, and China decreased 30 percent.

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Press release from Cabot