News from Notch Consulting, Inc.

February 10, 2012

Cabot carbon black chosen for auto paint

Filed under: Carbon Black — Notch @ 2:09 am

Taiwan-based Halsan Paint & Color has chosen Cabot’s EMPEROR 1800 carbon black for its next-generation black automotive coatings, which find use on vehicles and motorcycles across Asia.

Black coatings formulators are continuously trying to achieve superior jetness, meaning cleaner and darker with a blue tint, with the use of carbon black pigments that are considerably difficult to handle. Several top-class carbon black pigments have drawbacks that include the use of costly dispersants and long milling times. They minimize the formulator’s capability to alter other features of the final coating.

EMPEROR 1800 is the Cabot’s newly developed product in the area of high-strength black pigments used for water-borne formulations. This advancement contributes to reduction in manufacturing costs and exceeds industry standards for color performance.

PCBL reports 35% decline in profits; cites Chinese imports

Filed under: Carbon Black — Notch @ 1:52 am

Phillips Carbon Black, India’s largest carbon black maker, reported a fall of 35% in its net profit at Rs 19.64 crore during the third quarter ended December 31, 2011 as compared to Rs 30.03 crore for the same period in 2010. Sales, however, rose to Rs 514.34 crore from Rs 431.61 crore due to higher prices caused by a sharp rise in cost of inputs. The performance was affected due to lower off-take by tire companies and higher imports of carbon black from China at dumping prices. This resulted in lower capacity utilization for PCBL’s new plant in Mundra, which started up in April 2011.

Full results can be found here.

Michelin considering new plant in South Carolina

Filed under: Tires — Notch @ 1:40 am

Michelin North America is searching for the right location for its so-called “Project Cougar,” a tire plant valued at some $550 million. One possible site is in Anderson County, South Carolina, where Michelin already operates a rubber mixing and semi-finished goods plant in Shady Springs, SC.

According to the Anderson Independent Mail, Michelin North America is seeking a land/incentives deal with plans to invest a purported $550 million. According to the newspaper, “Interim county administrator Rusty Burns confirmed Monday night (Feb. 6) that Michelin is the company that officials have been calling ‘Project Cougar’ during public meetings where incentives were discussed.

The newspaper said the county council held the second of three required votes on an incentive package on Feb. 6, and a public hearing is scheduled for Feb. 21.

“‘This is still very much a competition,’ Burns said. ‘We are competing with others in South Carolina and on other shores,’” the newspaper reported.

On Jan. 17, the Anderson County Council voted unanimously for a “conditional incentives agreement” it planned to take to the tiremaker. The deal reportedly “says larger incentives are available if the company completes what is considered an ‘enhanced investment project’ that creates a minimum of 125 jobs and includes a minimum investment of $150 million,” the Independent Mail reported. “Incentives for the company will be even larger, according to the agreement, if the business creates at least 300 jobs and invests a little more than $500 million in Anderson County.”

Based on more recent tire plant projects announced for the state – Continental Tire the Americas and Bridgestone Americas both committed to huge investments in the state last year – $550 million would not appear to be enough for more than one facility. But the newspaper noted that “Economic development director Burriss Nelson said during the county council’s January meeting that the proposed project amounts to a minimum investment of $550 million. He said that, over time, the company’s plan could grow into a larger project that would be in the ‘$600 million to $1 billion’ range.”

CEAT building tire plant in Bangladesh

Filed under: Tires — Notch @ 1:31 am

Tire company CEAT on Wednesday announced plans to set up a Rs. 250-crore ($50 million) manufacturing plant in Bangladesh. The initial capacity would be 65 tonnes per day and production is to commence in FY-13. Of the total production capacity, 80 per cent will be of truck and light-truck tires and the rest of two- and three-wheelers and last-mile vehicles (i.e., 4X4s), said Mr. Anant Goenka, Deputy Managing Director, CEAT.

“Over the next three years, we will be looking at increasing our market share in Bangladesh up to about 40 per cent. We have a strong presence in Sri Lanka as the only tire manufacturer. We hope to replicate the same in Bangladesh,” he said. Present in Sri Lanka for the past 15 years as the sole tyre manufacturer, CEAT 50 per cent of the Lankan market. Approximately, 80 per cent of the raw material for the Bangladesh plant will be imported from India and South-East Asia. The Rs 250-crore investment will be raised through a mix of equity and at least 60 percent debt, said Mr Goenka.

“We will be competing mainly with imports and, therefore, have a cost advantage. There is good demand for Indian-manufactured tires out there,” said Mr Goenka.

Chinese carbon black delegates visit India

Filed under: Carbon Black — Notch @ 1:22 am

European Rubber Journal (subscription required) reports that a delegation from China’s carbon black industry visited India from 13-19 January, with three companies represented: Jiangxi Black Cat; Hebei Bright, and Shandong Gold. The trip was supported by China’s Ministry of Commerce. The Chinese language article is here, via CRIA, the Chinese Rubber Industry Association. The trip was prompted by ongoing trade disputes between the two countries regarding carbon black, including India’s recent decision to begin an anti-dumping investigation into Chinese carbon black imports.

According to ERJ, the delegates visited Indian carbon black makers as well as tire companies, including Apollo Tyres and JK Industries, as well as the Indian Automotive Tyre Manufacturers’ Association. They discussed at length India’s imposition of special measures on Chinese carbon black imports

According to the delegation, India’s carbon black capacity is 910,000 tonnes/year, but actual production in 2011 was 860,000 tonnes, of which 200,000 was exported. Domestic demand was around 600,000 tonnes. The Chinese delegation concluded that the market is not over-supplied at present.

(Note: these figures are substantially at odds with Notch estimates for the India carbon black market, which are available in the Carbon Black World Data Book 2012, which has just been published. Notch data put Indian production at 717 KT, exports at 115 KT, and domestic demand at 675 KT for 2011.)

Another conclusion is that price is a big factor, but also reliability of regular deliveries. In comparison to Chinese companies, India’s costs – notably the salaries of senior executives – is high, however worker productivity is low.

Indian tyre makers continue to buy Chinese carbon black, but only up to 25 percent of their total requirement. One reason for this is to diversify the supply chain away from India’s domestic suppliers.

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