News from Notch Consulting, Inc.

April 26, 2013

Denki Kogaku Kogyo considering new acetylene black plant in Japan

Filed under: Carbon Black — Notch @ 10:37 am

Japan Chemical Web reports that Denki Kagaku Kogyo is considering the construction of a new plant for acetylene black, an electrically conductive type of specialty carbon black that is finding increased use for the cathode materials of rechargeable lithium-ion batteries. Denki Kagaku Kogyo plans to make a formal decision by the middle of this year on the project, which involves the construction of 3 bn yen ($30.1 mn), 6,000-t/y facility in its plant in Chiba Prefecture. The facility would start operation by the end of fiscal 2014. The company currently produces acetylene black in Japan at its Omuta plant in Fukuoka Prefecture and at a plant in Singapore.

Cabot to close Malaysian carbon black plant

Filed under: Carbon Black — Notch @ 10:27 am

Cabot Corporation announced today that the Board of its joint venture carbon black company, Cabot Malaysia Sdn. Bhd. (CMSB), has decided to cease carbon black production at its Port Dickson, Malaysia, facility by the end of July 2013. Customer shipments from the plant are expected to continue for a period of time after production has been shut down. Cabot holds a 51 percent equity share in CMSB.

Dave Miller, president, Reinforcement Materials Segment, said in a press release, “Cabot and the CMSB Board have reached the decision that our carbon black plant in Malaysia is not well positioned to efficiently serve our customers in Southeast Asia on a long-term basis.” The closure, which will affect approximately 90 carbon black employees, was because of the facility’s manufacturing inefficiencies and raw materials costs.

The closure of the plant is expected to result in one-time cash and non-cash charges to the joint venture of approximately $13 million and $15 million, respectively. Annual savings for the joint venture are estimated to be approximately $7 million. Cabot owns 51 percent of the CMSB joint venture.

April 9, 2013

Bloomberg: Birla is merging carbon black businesses for possible IPO

Filed under: Carbon Black — Notch @ 9:21 pm

Following up on yesterday’s news that Aditya Birla Nuvo is selling its Hi Tech Carbon business to a Birla holding company called SKI Carbon Black (India) Pvt., Bloomberg today reported that Birla plans to merge all its carbon black units into SKI and possibly sell shares in the combined company, quoting two people familiar with the matter. Columbian Chemicals Co., which Birla acquired in 2011 $875 million, will also be merged with SKI, according to Bloomberg. The combined business is essentially tied with Cabot as the world’s largest producer of carbon black. The new entity may sell shares in an initial public offering as early as next year, Bloomberg sources said.

Aditya Birla Nuvo sells carbon black business (Hi Tech Carbon) to Birla holding company

Filed under: Carbon Black — Notch @ 1:07 am

Aditya Birla Nuvo announced today that it will sell its carbon black business, Hi Tech Carbon, to another Aditya Birla Group holding company called SKI Carbon Black (India) for Rs 1,451 crore. The move is widely seen as an attempt by the Kumar Mangalam Birla-controlled group to consolidate its carbon black business under one roof as a precursor to a global listing. The sale was aimed at reducing debt and follows a decision by the company’s Committee of Directors that it would be “extremely challenging” for Nuvo to become a global leader as tire companies prefer global suppliers while Nuvo’s Hi Tech Carbon subsidiary produces only at three plants in India. SKI Carbon Black (India) is the India arm of the group’s Mauritus-based holding company for the carbon black business.

The signs of consolidation were visible in December 2011 when the Birla group had unified its global carbon black business under one roof, forming an organizational structure to cut costs and take advantage of the worldwide leadership in the business. The Birla Group has some 2 million tonnes of capacity for carbon black, including Hi Tech Carbon in India, Alexandria Carbon Black in Egypt, Thai Carbon Black in Thailand, Liaoning Carbon Black in China, and Colombian Chemicals, which is based in the US but has global operations in carbon black.

J.D. Power: consumers less satisfied with run-flat tires than standard

Filed under: Run-flats, Tires — Notch @ 12:41 am

Rubber & Plastics News (subscription required) has details on a new consumer satisfaction survey from J.D. Power that indicates that owners of 2011- and 2012-model year cars in the US equipped with run-flat tires are less satisfied with their tires than owners of cars with standard tires. The findings are based on input from about 2,150 owners of cars with run-flats, about 7% of all respondents. Run-flats are installed primarily on luxury and performance sports cars and, while both groups were less satisfied with run-flats, the dissatisfaction was more pronounced among sports car drivers:

The difference in satisfaction level among owners of luxury vehicles vs. others was only about 1.5 percent, J.D. Power’s data show, while the difference among sports car owners was more than 9 percent.

The main complaint about run-flats was that they need to be replaced prematurely. According to the survey, 31% of customers with OE run-flat tires had to replace at least one tire in the first two years of ownership, compared to 19% for those whose vehicle was equipped with standard tires.

Bridgestone produces first tire at expanded South Carolina plant

Filed under: Tires — Notch @ 12:28 am

On April 1, 2013, Bridgestone Americas announced it had begun production at its new $346 million expansion at its tire plant in Aiken County, South Carolina. The new capacity can produce 12,750 passenger car and light truck tires per day. In July of 2011, the company announced the first phase of the PSR/LTR plant’s expansion, a $135 million investment designed to increase daily capacity by 4,750 tires. A supplemental expansion was announced in September 2011 to increase the plant’s tire production by an additional 8,000 tires per day. The result is a rated production capacity of 37,750 tires per day or approximately 13.4 million tires annually. This capacity focuses on ultra-high performance and light truck/SUV tires.

Yokohama completes first phase of Philippine tire plant expansion

Filed under: Tires — Notch @ 12:17 am

Rubber News has an update on Yokohama’s six-year, three-phase expansion of its tire plant in the Philippines. The ¥50B project began in 2011 and will be completed in 2017, and it will add 10 million units/year of capacity to 17 million u/y. Output is mainly intended for the North American market.

Phase one and phase two of the Philippines project consist of adding 3.23 million square feet to the 1.72 million-sq.-ft. facility. The expansions will put the plant at 4.95 million square feet, about 2.8 times larger than its former size. New machinery is being added at the site, and the factory work force ultimately will experience significant growth, said Hamaya, who has worked in both sales and manufacturing along with accounting and corporate planning at the tire maker.

The first phase was completed in February and adds a projected 3 million tires to the factory’s capacity. The second portion of the project, launched the same month, will boost capacity by an estimated 2.5 million tires when it is finished in 2015.

RMA: US tire demand to increase 1.5% in 2013

Filed under: Tires — Notch @ 12:04 am

The Rubber Manufacturers Association released its latest figures for its Tire Market Analysis Committee report on the US tire market on Friday. The organization indicated that US tire shipments remained unchanged in 2012 at 284 million total units, as a 10 percent increase in OE shipments offset a nearly 2 percent decrease in replacement shipments. The sluggishness is attributable to cautious consumers as well as economic uncertainties in both the commercial and consumer sectors of the replacement market. Nonetheless, the RMA points to some promising signs, including lower unemployment, a rebound in housing, and increases in vehicle sales and vehicle miles traveled. These and other macroeconomic factors should result in approximately 288 million total tire shipments in 2013, an increase of approximately 4 million units or nearly 1.5 percent.

RMA data and forecasts for specific segments are as follows:

Original Equipment (OE) Passenger Tires: Passenger OE tire shipments increased by 12.1 percent to 40 million units in 2012, a 4.3 million unit improvement. This reflects the 1.7 million unit increase in light vehicle sales for 2012, reaching approximately 14.4 million light vehicles. For 2013, light vehicle sales are anticipated to increase another 4.2 percent and crest the 15 million unit mark. As such, 2013 OE passenger shipments are expected to increase more than 6 percent or approximately 2.7 million units.

Original Equipment Light Truck (LT) Tires: Light truck OE tires increased 1.5 percent in 2012 to 4.3 million units as domestic vehicle production using LT tires experienced a marginal increase due to soft economic conditions in this sector. This category is forecast to grow by nearly 100,000 units in 2013, or approximately 3 percent.

Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: A increase in demand for commercial trucks and trailers in 2012 boosted commercial OE tire shipments by 2.6 percent, reaching approximately 5.1 million units. However, demand for new trucks is expected to level off in 2013 and little or no change in the total OE tire units is anticipated.

Replacement Passenger Tire: 2012 shipments decreased by 3.5 million units, or 1.8 percent, to 190.9 million units as anticipated demand failed to materialize due to continued soft economic conditions and cautious consumers. For 2013, improving economic conditions, positive signs of jobs added, and growth in vehicle miles traveled will be tempered by spending pressure on consumers. As a result passenger replacement shipments are forecast to increase by a modest 1 million units.

Replacement Light Truck Tire: Total 2012 LT replacement shipments was 28.1 million units, a decrease of approximately 500,000 units, or 1.9 percent. A nearly 1 percent growth is forecast for 2013 given the slowly improving economy and signs of improvement in the housing market.

Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: For 2012, this market declined by 4 percent, or 700,000 units, to 15.8 million units as fleets opt for new equipment and the economy remained sluggish. No increase is forecast for 2013 owing to a sluggish commercial sector.

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