News from Notch Consulting, Inc.

April 29, 2010

Rhodia Settles Strike at French Silica Plant with Minimal Disruption

Filed under: Silica — Notch @ 1:23 pm

Industry sources indicate that Rhodia has settled a short strike at its precipitated silica plant in Collonges au Mont d’Or, France that occurred last week. The strike caused significantly reduced production at the plant for five or six days, with total lost production of about 1,500 tonnes. Rhodia responded to the outage by declaring force majeure and temporarily reducing customers’ allotments. Company sources indicate that the strike has been resolved and that the plant is back to 100%.
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Update: The silica market is quite snug right now, between recovery from the downturn and new demand being generated by tire regulations, so the Rhodia strike created greater concern among European tiremakers than otherwise would have been the case. There are rumors that several supplies are contemplating expansions, but no projects have been initiated as of yet.

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April 27, 2010

Reflections of Chongqing

Filed under: Carbon Black — Notch @ 10:15 am

I have just returned home from the Carbon Black China 2010 conference held in Chongqing, China on April 18-21. This is a very well organized and comprehensive conference, and I owe a particular debt of gratitude to the generosity and hospitality of the hosts, the China Carbon Black Institute. The conference program focused on the challenges and opportunities facing the Chinese industry, but the scope of the discussion spread well beyond the country’s borders to the global industry as well. With China now accounting for some 32% of global carbon black output, the fate of the Chinese industry is intertwined with that of the global industry. This was one of the major findings of my keynote address to the conference.

The conference served as a commemoration of the 60th anniversary of the modern carbon black industry in China, and speakers addressed in detail both the accomplishments of the past as well as the challenges of the future, not only for the carbon black sector but also for rubber and silica. One impressive statistic presented by the China Carbon Black Institute detailed the steady progress that the Chinese industry has made with regard to yields: in 1977, the Chinese industry consumed on average 2.74 tonnes of feedstock to produce a ton of N330, but by 2008, the industry consumed just 1.68 tonnes of feedstock per tonne of N330. Similar improvements were made in regard to water consumption as well as steam and power generation.

There has been a similar evolution in terms of plant ownership: over the last ten years, the Chinese carbon black industry has shifted from being dominated by state-owned enterprises, which typically were inefficient and featured outdated equipment and technology, to a combination of privately-owned and foreign-owned joint ventures. This influx of new ownership has brought more advanced production technology, as well as improvements in material handling, product branding, etc. Still, the operating rate of the Chinese industry remains well below the global average, and more work is required to either shut down or improve the industry’s smaller, less efficient producers. Other challenges include product quality issues and feedstock shortages. I would recommend that anyone interested in the industry purchase the conference proceedings.

Photo: Sakyamuni in Nirvana (No. 11, the Southern Song Dynasty), part of the Dazu Rock Carvings dating from as early of the 7th century. A day trip organized by the conference.


Photo: a stretch of the Great Wall near Simatai, China

Carbon Black World Announces Preconference Seminar on Energy Recovery

Filed under: Carbon Black — Notch @ 9:21 am

The organizers of the Carbon Black World conference, which is to be held in Rome on November 17-18, have announced a pre-conference seminar entitled Energy Recovery & Emissions Abatement in Carbon Black Manufacture. The seminar will be held Tuesday, November 16 and will be taught by C.P. Natarajan, an independent consultant on industrial energy recovery and long-time veteran of the carbon black industry.

From the brochure:

Learn the latest about Energy Recovery to improve your bottom line and Emissions Abatement for a Greener environment. Attendees will discuss and examine the construction of state of the art energy equipment used in plants, how to keep equipment functioning when they show problems and how to identify operational problems before they occur. The discussions will continue about commercially available emissions abatement technologies and their adaptation to the carbon black industry.

Key topics to be covered:
* Basics of carbon black energy recovery, equipment and comparison of available designs
* Corrosion and material selection
* Operation, maintenance and safety
* Field problems and repair
* Emissions from carbon black plants and their effects on humans, livestock and plant life
* Emission control technologies and their adaptation to the Carbon Black Industry

April 25, 2010

Cabot to Shut Down Indian Carbon Black Plant

Filed under: Carbon Black — Notch @ 5:57 pm

On April 22, Cabot issued a Form 8-K filing announcing that the company planned to cease manufacturing operations at its carbon black plant in Thane, India by June 30, 2010.

On April 19, 2010, Cabot Corporation committed to cease manufacturing operations at its carbon black manufacturing facility in Thane, India. The decision, which will affect approximately 120 employees, was made as a result of a broad reaching analysis of the manufacturing assets including cost structure, ability to expand and a variety of other factors. It is anticipated that manufacturing operations at the facility will cease by June 30, 2010. The Company will continue to maintain a presence in India through its fumed metal oxides manufacturing joint venture and its continuing business operations in carbon black and other products.

The Company expects the closure plan will result in a pre-tax charge to earnings of approximately $24 million over 2 years, with approximately $23 million of this amount expected to be recorded during fiscal year 2010. Pre-tax estimates of the total amount the Company expects to incur for each major type of cost associated with the closure plan are: (i) costs relating to personnel of $5 million, (ii) accelerated depreciation and impairment of facility assets of $16 million, and (iii) demolition and site clearing costs of $3 million. These amounts exclude any potential gain that may be realized on the sale of certain assets related to the manufacturing facility.

Net cash outlays related to this action over the next 2 years are expected to be $8 million, approximately $7 million of which is expected to be paid during fiscal 2010. Cabot expects the operating cost benefits from the closure to offset the charge to earnings within approximately 2 years.

Birla Still Investigating Mexico?

Filed under: Carbon Black, General — Notch @ 5:48 pm

At the carbon black conference in Chongqing, I heard a rumor that Aditya Birla Group is still investigating the possibility of building a carbon black plant in Altamira, Mexico. The next day, the Mexican newspaper Hoy Tamaulipas reported that a team from Aditya Birla Group had visited with Governor Eugenio Hernandes Flores at his offices in Tamaulipas. Below is my translation of the article, based on Google and my own rudimentary Spanish.

During a promotional tour of Asia by Governor Eugenio Hernandez Flores in 2008, which promoted the competitive advantages of Tamaulipas as a land investment, top executives of the Aditya Birla Group announced plans to expand its operations in the port of Altamira.

Aditya Birla is a world-class India company, specializing in the field of telecommunications, petrochemicals, textiles and steel. The company announced an investment of at least $80 million in a carbon black plant in Altamira.

The governor received at his offices in Government House the corporate director of Aditya Birla, Santrupt Misra. Also the manager of Carbon Black Business Aditya Birla Group, Surendra Goyal and executive business strategy of this group, Joseph M. Domene, who stated that after a competitiveness study conducted in various parts of North America, the port of Altamira is the most interesting elective to expand their operations.

Flores Hernandez told them that among the incentives the government has offered is the recruitment and training of skilled workers, since this type of plant requires a highly qualified staff.

“We appreciate that this world-class company has put Tamaulipas and in particular the port of Altamira on your map. You will find here a friendly government that deals well with companies, workers and foreign investors,” said the governor.

The construction of the plant would generate a thousand direct jobs and 300 indirect. Once the operation begins, it will require at least 150 engineers and technicians.

Aditya Birla Group is also interested in creating a laboratory for research and technological development. In this context, the Hindu leaders expressed their safety they found in the Governor Eugenio Hernandez Flores all technical and administrative facilities.

April 18, 2010

In Chongqing for Carbon Black China 2010

Filed under: Carbon Black — Notch @ 10:26 am

I am in Chongqing, China this week for the Carbon Black China 2010 conference. This conference, which focuses on the current state of the Chinese carbon black and silica sectors, is held every other year. It was only in 2008 that the conference began inviting people outside the Chinese industry to attend, and I’m proud that Notch was once again invited to give a keynote address, which is entitled “Current Conditions in the Global Carbon Black Industry.” The Chinese conference is always a nice mix of a full schedule of talks combined with social activities and sightseeing. This year’s conference includes a riverboat tour of the Yangtze and Jialing Rivers, a folk performance in Huguang Guild Hall, and a tour of Dazu Rock Carvings, which date back to the 7th century. The speakers program begins tomorrow morning, so I will check back in at the end of the conference.

April 8, 2010

Notch Updates Silica Report

Filed under: General, Silica — Notch @ 9:25 pm

Notch Consulting has published the second issue of the Silica Market Update, a bi-annual report covering conditions in the global precipitated silica market. The PDF report is 22 pages with eight tables. The report also includes a separate Excel spreadsheet with 22 tables covering demand by region/country and capacity by company.

Figures include quarterly demand estimates for 2008 and 2009, as well as full year demand for all years going back to 2000 and forecasts for 2010, 2011, 2015, and 2025. Volume demand is provided in tonnes at the global, regional, and national levels.

Market segments covered in the report include tires (including a breakdown of conventional versus ‘green tire’ applications), non-tire rubber (MRG, silicones and footwear), dentifrice, nutrition/health (food, ag, pharma, and cosmetics), and industrial (paper, plastics, paints/coatings, other applications). Average pricing is provided for various grades of precipitated silica for the United States, the European Union and China. The report also provides an overview of recent and proposed capacity expansion projects, as well as global precipitated silica capacity by company and plant. Finally, the most recent issue also includes a discussion of recent tire rolling resistance legislation worldwide and its likely effect on long-term precipitated silica demand.

For subscription rates and options, please contact Notch Consulting at info @ notchconsulting.com.

April 2, 2010

Fire at Cabot Pampa, Texas Plant

Filed under: Carbon Black — Notch @ 1:46 pm

From today’s Amarillo Globe News:

Cabot Corp. is investigating the cause of a fire at its carbon black plant near Pampa. The fire began about 10:30 a.m. Wednesday at the plant, two miles west of Pampa, on U.S. Highway 60, a Pampa firefighter said. A Cabot spokesman said the equipment involved in the fire had been shut down for maintenance. He said the fire was contained before Pampa firefighters arrived. No injuries were reported.

Carbon black is produced at the plant by burning special oils, the spokesman said. The material is used in liquid crystal display screens, cables, tires and other applications, he said.

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