News from Notch Consulting, Inc.

July 22, 2011

Evonik carbon black business to change name to Orion Engineered Carbons

Filed under: Carbon Black — Notch @ 7:40 am

Effective August 1, 2011, it is expected that the divestiture of the carbon black business from Evonik Corporation will be complete. Announced earlier this year, Evonik divested itself of the Carbon Black Business Unit and sold it to affiliates of Rhone Capital and Triton. The new company will be known as Orion Engineered Carbons. All of the silica-based products (Aerosil, Aeroxide, Acematt, Sipernat) will continue to be manufactured and sold by Evonik Inorganic Materials.

The company does not expect any interruption in the supply of carbon blacks or in customer relationships with the sales, marketing and technical personnel involved with the carbon blacks as a result of this divestiture. Likewise, there will be no changes in manufacturing sites, methods or equipment associated with this announcement. It is strictly a change in ownership.

July 21, 2011

Automakers ask Obama administration to reevaluate tighter US MPG ratings

Filed under: General — Notch @ 11:56 pm

From European Rubber Journal (subscription required) comes word that the auto industry is pressing the Obama administration for a promise to reevaluate an ambitious fuel economy target announced in June. The new rules would raise US to 56.2 miles per gallon by 2025, up from 27.3 mpg now.

Automakers are seeking to slow mileage-standard increases, saying the necessary technology isn’t yet in place and may slow sales by making vehicles more expensive. A review midway through the 2017-2025 program would give regulators a chance to reassess assumptions that the needed engine technology will exist, [Ellen] Gleberman [of trade group Global Automakers] said.

“It’s very difficult if not impossible to know where the industry will be in terms of technology or what the market conditions will be this far in the future,” said Gleberman, whose group represents Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and 11 other Asian and European automakers.

Read the full article here.

Bridgestone to invest $135 million in the US

Bridgestone Americas Tire Operations will invest $135 million to expand capacity at its passenger and light truck tire plant in Aiken County, South Carolina by up to 4,750 units per day. Construction is expected to be complete by the first quarter of 2013 and production is expected to begin in 2Q 2013.

The project will increase plant capacity by an additional 4,750 units per day to about 29,750 units per day. Bridgestone Americas said it will expand the facility by 266,000 square feet in the main plant and mixing areas.

EC approves Evonik carbon black acquisition

Filed under: Carbon Black — Notch @ 12:53 am

The European Commission has cleared the acquisition of German chemical company Evonik’s carbon black business under the EU Merger Regulation. The approval the EU Merger Regulation means that the deal is not considered one that will significantly alter the structure of the carbon black market or significantly impede effective competition in the European Economic Area. “The transaction would not significantly alter the structure of the market for carbon black as neither Rhone Capital nor Triton has any ownership interests in any business that manufactures or sells carbon black,” the Commission said in a statement. The sale to Rhône Capital was announced in April 2011.

Tyrepress notes that one of the acquiring companies, Triton, has an interest in a supplier of carbon black oil, but that did not change the Commission’s findings.

As one of the investment funds run by Triton controls Rütgers, a supplier of carbon black oil (which is the chemical intermediary product used to produce carbon black), the Commission also investigated the vertical relationship arising from the proposed transaction. The investigation confirmed that the transaction “will neither result in the shutting out of competing carbon black producers as there are many alternative suppliers of carbon black oil on the market, nor in the shutting out of other suppliers of carbon black oil as there are sufficient alternative outlets for their carbon black oil production.”

Triton bought coal tar company Rutgers Chemicals from Evonik Industries in 2007.

July 5, 2011

Environmental group to sue US EPA over black carbon (not carbon black)

Filed under: Carbon Black — Notch @ 5:15 pm

The Center for Biological Diversity, an environmental lobby group based in California, has issued a formal letter to the US Environmental Protection Agency, informing the Agency of its intention to sue for violations of Section 304 of the Clean Water Act in relation to pollution by black carbon.

The group’s full letter is available here.

Some media sources have reported that the letter refers to carbon black, but readers should note that “black carbon” is not synonymous with “carbon black.” Black carbon is soot released into the atmosphere by the incomplete combustion of fuels or biomass, whereas carbon black is an industrial filler and pigment manufactured from heavy residual fuel oil.

Toyota and Honda increase incentives in US in a sign that production woes are easing

Filed under: General — Notch @ 12:24 pm

According to Edmunds.com, increased incentive spending in June by Toyota and Honda indicate that the two Japanese automakers are turning a corner with their respective production issues. The company’s report on the True Cost of Incentives found that incentive spending by Toyota increased 30.5 percent to $1,631 per vehicle from May to June. Honda, meanwhile, boosted its average spend four percent to $1,023 per vehicle over the same period. The incentives jump by both automakers comes just one month after Edmunds.com found Toyota and Honda spending fell 26 percent and 46 percent, respectively, in May.

“By kicking up their incentive spending, Toyota and Honda are sending a clear message that production levels are starting to return, even if those vehicles haven’t yet hit dealer lots,” said Jessica Caldwell, director of industry analysis at Edmunds.com. “Honda, for example, introduced its Honda Promise’ program which lets car buyers lock in incentives on a new car now, even if the car can’t be delivered for another several weeks. With this program, Honda is not only demonstrating a confidence in its recovery, but also making a strong play to protect its market share.”

In related news, Edmunds.com estimated at 1,093,000 new car sales (including fleet sales) are expected for June 2011, representing an 11.2 percent increase over June 2010 and a three percent increase over May 2011.

The estimated sales volume translates to a Seasonally Adjusted Annualized Rate (SAAR) of 11.9 million in June, according to Edmunds.com analysts. Even with SAAR coming in below 12 million for the second month in a row, Edmunds.com continues to project an annual SAAR of 12.9 light vehicle sales overall in 2011.

Conti announces new tire plant in Russia

On July 1, 2011, Continental announced plans to build a new tire plant in Kaluga, Russia. Kaluga is a city of just over 325,000 inhabitants that lies 170 km southwest of Moscow.

Nikolai Setzer, head of the Passenger and Light Truck Tires division and member of the Executive Board of Continental AG stated in that Conti planned to invest a total of more than one billion euros over the next four years in order to build up additional passenger tire capacity. The site in Kaluga was chosen for its good infrastructure, central geographical location, and the good experience Continental has already had with the existing automotive electronics plant in the location.

Some €220 million will be invested in the new plant, with production slated to start at the end of 2013. Capacity will total about 4 million tires per year in its first full capacity phase, while employment will total about 400 by the end of 2013. The Russian government has promised to support the new site. Continental, as a major tyre producer serving the European OEMs, is thus following leading vehicle manufacturers like Volkswagen, for example, who have already had manufacturing operations in Kaluga for several years now. Construction will begin at the end of 2011.

The full press release is here.

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