News from Notch Consulting, Inc.

Cabot has announced plans to increase its capacity at the PT Cabot Indonesia subsidiary in Indonesia. The company will increase capacity at the plant in Merak, and has signed an agreement to purchase additional land near its plant in Cilegon to facilitate a future expansion at that site. The Merak expansion will be completed by mid-2011. The announcement stated that the expansion will increase Cabot’s total carbon black manufacturing capacity by 20 percent, but this is taken to mean the capacity of PT Cabot Indonesia. The state of the art capacity will use Cabot’s highly advanced energy recovery and environmental technologies.

On May 31, OCI announced plans to build a new carbon black plant in Gunsan, South Korea, where the company already operates a polysilicon plant. Construction will begin in the second half of 2010 and will be completed by the end of 2011. Capacity will be 70,000 tonnes per year initially, expanded to 100,000 tonnes by 2014. The project is expected to cost 75 billion won (US$61 million). The expansion will take OCI’s total carbon black capacity to 310,000 tonnes/year, including its two existing plants in Pohang and Gwangyang, and will make it the largest producer in South Korea.

The last few weeks brought two carbon black price increases driven by higher costs.

On May 21, Columbian Chemicals Co. announced that it would increase prices by 5 cents per pound for all ASTM N-Series and XT-Series-grade carbon blacks. The increase becomes effective on July 1 and applies to all non-contract customers in all market segments, Columbian said.

On May 26, Cabot announced a 5 cent-per-pound increase on rubber blacks as of July 1. The increase covers North American non-contract customers. The main driver of the increase is escalating raw material, transportation, energy and other direct manufacturing costs. In the announcement, the company stated that it could no longer offset these higher costs through initiatives to improve operating efficiencies.