News from Notch Consulting, Inc.

March 26, 2013

Yokohama receives awards for Chinese tire plant

Filed under: Tires — Notch @ 11:11 pm

RubberWorld reports that the Yokohama Rubber Co. has announced that Hangzhou Yokohama Tire Co., Ltd., its tire production base in China, received grants-in-aid totaling 13.47 million yuan (¥205 million or US$2.2 million) for the period from December 2012 to March 2013 from Hangzhou City and the Hangzhou Economic and Technological Development Zone (HEDA). The grants are in recognition of the company’s economic and environmental activities, and represent the largest amount awarded to a single company (not a group of companies) among about 340 located in the HEDA. The grants reflect several distint achievements, including the fact that Hangzhou Yokohama’s capacity expansion plans have been completed faster than planned, while the plant’s small-scale production method will enable flexible capital investment according to specific demand. On the environmental side, the company installed a system to purify exhaust from the mixing/vulcanization process, built a sewage treatment facility, implemented energy conservation efforts to reduce energy consumption in FY2012 was reduced by more than 15% from the previous year, and planted some 24,000 trees from 2007 through the end of 2012.

Europe looking to phase out rubber accelerator

Filed under: Rubber Chemicals — Notch @ 10:57 pm

Rubber & Plastics News reports that the European Commission’s SafeRubber research project plans to phase out a rubber accelerator — ethylene thiourea, or ETU — used primarily in the processing of polycholorprene rubber. The product has been used for more than 80 years but is likely to be restricted in the future under REACH regulations as it is classed toxic to reproduction. The Saferubber research project has been working on the development of a safer alternative to ETU since June 2010.

According to R&P News, the EC recently contracted a consultant to collect relevant information on the presence in articles of a list of CMR 1A and CMR 1B substances, which include ETU, and on the availability of alternatives.

Michelin considering European plant closures

Filed under: Tires — Notch @ 10:38 pm

Tyrepress (free subscription required) reports that Michelin is possibly considering some restructuring amongst its European capacity due to the weak conditions there.

Quoted in the Monday 25 March 2013 edition of French daily Les Echos, Florent Menegaux, director of the passenger car and light truck products division reportedly said: “We do not exclude anything, we must consider the evolution of the market, whether the situation is sustainable or not,” adding: “We are in a situation of overcapacity. All segments are impacted.”

Various news sources point out that Michelin, which employs 63,000 across Europe and is the world’s second largest tyre maker, met with union representatives on 7 March to discuss the future of some of its French plants. Any move in this direction would appear to counter earlier strategies to reduce headcount in the mature European markets through the natural cycle of attrition.

Earlier this month, Bridgestone announced that it would shut its passenger car tire plant in Bari, Italy, while Goodyear announced in January that it would shut down production at its Amiens, France plant.

Cabot sees outage at Japan carbon black plant

Filed under: Carbon Black — Notch @ 3:04 pm

Last week, JPMorgan Chase issued a note to investors that reiterated its neutral rating on Cabot Corporation. In the note, JP Morgan Chase mentioned an unexpected outage that affected results in the carbon black business:

The analysts wrote, Cabot indicated during its annual meeting that global carbon black volume decreased in January and February. In addition, the company was contending with the effect of a meaningful carbon black manufacturing outage.

More details were not provided, but Notch Consulting has heard from company sources that the outage resulted from a one-time event during Cabot’s second quarter (i.e., Jan-Mar 2013). The issue has since been resolved and the plant in question is running normally again. Cabot expects the outage to result in a charge of $6 million to $8 million, including both lost volumes and repair costs. Showa Cabot, Cabot’s Japanese subsidiary, operates two carbon black plants in Japan (in Chiba and Yamaguchi), but the company did not say which of the two plants had the issue.

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