Cabot closing reinforcing carbon black unit at Chinese site

Boston, Massachusetts – Cabot Corp. has posted restructuring charges of over $8 million (€7.3 million) for the planned closure of its reinforcing carbons unit in Tianjin, China, the company has announced.

In an 8 Feb SEC filing of first quarter results, Cabot said the move was part of a wider restructuring activity initiated during the final three months of 2023.

The restructuring, said Cabot, covered both its carbon black operations ‘reinforcement materials segment’ and its performance chemicals segment.

Under the ‘reinforcement materials' plan, Cabot said it will close the Tianjin reinforcing carbons unit, acquired from Tokai Carbon in February 2022.

With the move, the company expects to consolidate reinforcing carbons operations and reduce ongoing operational costs.

During the three months ended 31 Dec 2023, Cabot recorded charges of $2 million for severance-related costs and $6 million for 'accelerated depreciation' as part of the restructuring plan.

Cabot expects to record additional restructuring charges of $1 million related to the measures during the remainder of its fiscal year, ended 30 Sept 2024.

On acquiring the Chinese facility from Tokai Carbon, Cabot announced plans to upgrade the operation to support its battery materials product line.

Located near Cabot’s existing carbon black and speciality compounds facility in Tianjin, the site had the capacity to produce up to 50 kilotonnes per annum of carbon black when acquired.

In a statement about the unit closure, a Cabot spokeswoman said that since acquiring the Tianjin plant, "we have been upgrading the capabilities of the facility to support the growth of our battery materials product line."

Cabot, she added, will "ensure security-of-supply for our reinforcing carbons customers in China and elsewhere by leveraging... our other [facilities] in Tianjin, Shanghai and Xingtai, to name a few."