Cabot to Boost Global Carbon Black Capacity on Strong Demand

Cabot Corporation CBTis adding considerable capacity to its global network of carbon black plants. The company is expanding its global capacity by more than 300,000 metric tons through a combination of operational improvements, plant expansion and debottlenecking projects.

Cabot will add capacity of roughly 160,000 metric tons through an expansion at its facility in Cilegon, Indonesia.

This will serve the increasing demand of carbon black in Southeast Asia, which is expanding at 4-5% per annum. The company expects product from this expansion to be available for sale by late 2020 or early 2021.

Moreover, Cabot is investing roughly $50 million in debottlenecking projects and operational improvements across 18 of its carbon black facilities. The move will provide an additional 150,000 metric tons of increased carbon black capacity available for industrial rubber, tire and specialty carbon customers. Notably, the company has already completed about a third of this capacity expansion and it expects the project to reach full completion by 2021. These investments are expected to increase its global carbon black capacity to roughly 2.5 million metric tons.

Cabot’s shares have lost 7% in the past three months, underperforming the industry’s 3.3% decline.