News from Notch Consulting, Inc.

November 29, 2011

Nokian cutting truck tire production

Filed under: Tires — Notch @ 6:50 pm

On November 25, Nokian Tyres P.L.C. announced plans to reduce production of heavy truck tires and lay off staff to adjust for weaker demand.

The preliminary plan is to change the working pattern of the heavy tyre production to a discontinued five-day three-shift model, and to reduce the work input of approximately 100 factory employees and 15 white-collar officials with lay-offs and possibly with personnel cuts. The production adjustments are estimated to start in January-February 2012 and to continue until further notice.

Nokian said that its passenger tire division has seen no weakening in demand, and expects to report improved sales and operating results for the year.

Is this a harbinger of a weaker 2012 tire market?

Tire Review:

“While this is not huge news (Nokian expected weaknesses in 2012) it stresses how fragile demand is for the pro cyclical heavy and truck tires is in a recessionary environment,” financial analysts from Morgan Stanley reported in an investor’s note published the day of the news.

The analysts view is that this move highlights the possibility of further risks for other players in the market, which have high exposure to truck and specialty tires. In this respect Morgan Stanley points out that Michelin, for example, generates more than 40% of revenue excluding mining and two-wheel tires. By contrast, exposure for Pirelli to this segment is said to be no more than 8%-10% of sales, but the point remains that this scenario could affect other players too.

As quoted by Reuters, Michelin’s Michel Rollier has stated that the global market remains relatively healthy and that the weakness is limited mainly to the heavy truck tire market in Europe.

Lockout at Cooper Findlay

Filed under: General, Tires — Notch @ 5:45 pm

On Monday, November 28, Cooper Tire & Rubber Co announced that it locked out the unionized workforce at its Findlay, Ohio tire plant following “repeated attempts to extend its recently expired contract or reach agreement on a new long-term contract with United Steelworkers Local 207L (USW),” according to a press release from the company. Cooper plans to continue manufacturing operations at the Findlay facility with a temporary workforce during the lockout.

In its own press release on the lockout, the United Steelworkers (USW) condemned the decision, saying it had made a good faith offer to keep working while negotiations toward a new labor contract proceeded. USW District 1 Director Dave McCall said that he expects the union to pursue unlawful bargaining charges against Cooper with the National Labor Relations Board (NLRB) and added that the union is still committed to negotiating a fair contract in Findlay.

Dates for future negotiations are currently being finalised.

Sibur-Russian Tyres approved to acquire Matador-Omskshina

Filed under: General, Tires — Notch @ 5:12 pm reports that Russia’s Government Commission on Monitoring Foreign Investment has approved Sibur-Russian Tyres’s plan to acquire 100% interest in the Matador-Omskshina joint-venture, which it previously operated as a 50/50 joint venture with with Continental AG. Following the acquisition, the joint venture has been renamed Cordiant-Vostok.

Sibur-Russian Tyres says that it plans to increase passenger tire production capacity at the joint venture.

The joint venture with Slovak tyre producer Matador, which was subsequently bought German firm Continental AG, was founded in 1995. In 2010, the company increased production by 23 per cent, to 2.75 million units under the Cordiant and Matador brands. In June 2011, Continental AG withdrew from the joint venture, deciding to focus on the development of its own business in Russia.

Here is the press release (Russian language).

November 21, 2011

Reflections on Singapore

Filed under: Carbon Black — Notch @ 10:49 am

The Carbon Black 2011 Conference in Asia Pacific conference concluded on Friday, and Notch was honored to deliver one of the conference’s keynote addresses. The conference was organized by Boston & Billman and was very capably hosted by Sukhjeet Sekhon of Glencore, and together they put together a well organized, well attended conference in a beautiful location. Congratulations to all involved.

The tone of the conference was one of guarded optimism as many carbon black suppliers are entering 2012 with volumes essentially sold out and pricing on the rise, and the industry is investing heavily in new capacity, especially in China, India, and Russia. That said, there is concern about next year’s demand picture as the fourth quarter was weaker than expected (even taking into account holiday shutdowns). Further, there are very real concerns that the Eurozone’s financial crisis could lead to a double-dip recession. Other major areas of concern for suppliers include feedstock availability (especially low sulfur feedstock), the potential for tighter environmental regulations, and continued encroachment by silica into tire tread applications.

Here are some of the most recent production forecasts from the various regional outlooks:

India (courtesy of Ashok Goyal of Phillips Carbon Black):
FY 2010: 674 KT
FY 2011: 693 KT (+2.8%) – stronger gains hindered by increased imports, especially from China (NOTE: FY runs April to March)

Russia (courtesy of Igor Levenberg of Makrochem):
2010: 671 KT
1H 2011: 359 KT
2011 Annualized: 718 KT (+7%)

Ukraine (courtesy of Igor Levenberg of Makrochem):
2010: 76 KT
1H 2011: 52 KT
2011 Annualized: 104 KT (+37%)

China (courtesy of Liu Min of the China Carbon Black Institute):
2010: 3,375 KT
2011f: 3,691 KT (+9.4%)

Japan (courtesy of Midori Hajikano of Tokai Carbon):
2009: 577 KT
2010: 723 KT (+25%)

Notch Consulting forecasts that global carbon black production will grow 6.1% in 2011 to 10.8 million tonnes.

New carbon black plant in Abu Dhabi to produce specialty grades

Filed under: Carbon Black — Notch @ 9:17 am

The Carbon Black 2011 Conference in Asia Pacific, which just concluded in Singapore, included a talk by Alberto De Amicis of Eurotecnica regarding Abu Dhabi Oil Refining Co.’s new carbon black plant and coker project in Abu Dhabi, UAE. As we reported here previously, Eurotecnica is providing technology and basic design for the new plant. According to Eurotecnica, the technology, which was developed in association with India-based consulting firm PVTI, is energy efficient and results in high product quality. Eurotecnica is a leading provider of technology for melamine production, having licensed and implemented 17 units with a combined capacity of 430 KTPY, or about one-third of global capacity.

On the carbon black side, Eurotecnica’s services include the following:
– Feasibility studies;
– Basic, front-end and detailed engineering;
– Supply of proprietary equipment;
– Supply of critical equipment or client assistance in procurement;
– Technical advisory services for all phases of implementation, including plant commissioning;
– Theoretical and practical training at site.

Here are some details on the plant:
Engineering phase: completed
Construction: to begin 1H 2012
Total capacity: 40,600 t/y (nominal product mix), of which 27,600 t/y will be ISAF N-220 (CBFN 220 PC – UV Grade) and 13,000 t/y will be N-115 (CBFN 115 CP – semiconductive).
Specs: Output is zero grit, high-purity clean grades, with a grit residue requirement of 15 ppm max (Sieve/grit reside 325 mesh)
Feedstock: The plant will use two feedstocks (specific to each grade) that are hydrotreated slurry residues with very low sulfur content and different BMCI and property values
Uses: The special grades produced at the plant will be used in the production of plastic pipe (especially those requiring high purity, low residuals, such as potable water) and wire and cable products.

November 18, 2011

Escape the Map

Filed under: General — Notch @ 9:14 pm

Here is an innovative, interactive advertisement for Mercedes-Benz. Very fun and original.

Escape the Map.

November 11, 2011

Cabot adds graphenes to product line

Filed under: Carbon Black — Notch @ 7:05 pm

On November 1, 2011, Cabot Corporation announced the addition of graphene technology to its portfolio. These emerging performance materials will be offered through an intellectual property licensing agreement with Michigan-based XG Sciences, Inc. Under the agreement, Cabot will license intellectual property rights to XG’s xGnP® graphene nanoplatelets technology, including detailed know-how regarding the manufacturing process.

According to the press release, graphenes are highly electrically and thermally conductive, mechanically strong, thin sheets of carbon atoms. They are used as performance-enhancing materials in composites to add strength, stability, electrical and thermal conductivity, and other properties at lower loading levels than traditional materials.

Although both are made from carbon atoms, graphenes, because of their unique shape and structure, provide different application opportunities from standard carbon black. For example, the thermal transfer properties of graphenes extend beyond those of carbon black, making graphenes useful for applications in plastics that are heat sensitive and require a good conductor of heat. Because the particles are flat, graphenes can also be used as a barrier layer to reduce gas transfer in packaging applications.

The long road to a settlement

Filed under: Carbon Black — Notch @ 6:46 pm

NPR has published an article chronicling the long legal battle between residents of Ponca City, Oklahoma and the Continental Carbon carbon black plant on the outskirts of town. Persistent complaints about emissions from the plant eventually resulted in more than $20 million in payouts, including a $10.5 million settlement in 2009.

Rhodia inaugurates new silica plant in Illinois

Filed under: Silica — Notch @ 12:54 am

On Wednesday, November 9, Rhodia inaugurated its expansion of highly dispersible silica production at its Chicago Heights, Illinois site. The expansion of 16,000 tons increases Rhodia’s North American capacity by 33 percent.

“One year after commissioning our new plant in Qingdao, China, this additional increase in production capacity confirms our continued commitment to leadership in highly dispersible silica,” commented Tom Benner, president of Silica, in a company press release. “We are also in the construction phase of a similar expansion at Collonges au Mont d’Or, France that will be completed in 2012. “Combined,” he explained, “these three latest investments increase our global capacity of highly dispersible silica over 40 percent, ensuring that we are prepared now to meet long- term growth expectations associated with demand for fuel-saving tires.”

The Chicago Heights site, located south of Chicago, Illinois, founded in 1995, is one of eight Rhodia sites producing highly dispersible silica at the highest quality standard for fuel-saving tires, battery separators, and other key markets.

Press Release (PDF).

Eurotecnica to provide technology and design for new carbon black plant in Abu Dhabi

Filed under: Carbon Black — Notch @ 12:47 am

Eurotecnica recently announced that it has been awarded a contract to supply carbon black technology and basic design for Abu Dhabi Oil Refining Co.’s new carbon black plant and coker project in Abu Dhabi, UAE. According to Eurotecnica, the technology, which was developed in association with India-based PVTI, is energy efficient and results in high product quality. The technology has already been used at a new plant in Iran as well as another undisclosed project.

Eurotecnica will present an overview of the technology at the Carbon Black 2011 Asia Pacific Conference being held next week in Singapore.

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