On January 28, 2014, Cabot Corporation announced its intention to open a new Europe, Middle East and Africa Shared Service Center in Riga, Latvia, and to close its Leuven, Belgium site, subject to the Belgian information and consultation process. According to Cabot’s 8K on the move (see below), the actions were developed following an extensive evaluation of the company’s shared service capabilities in the EMEA region and a determination that the proposed future EMEA Shared Service Center will enable Cabot to provide the highest quality of service at the most competitive cost. Cabot expects to complete these actions by the end of calendar year 2014, and the company expects cash charges for the intended closure of the Leuven site and the transition to Riga to be in the range of $19 to $22 million. These costs include severance and employee benefits and transition and other closure costs. The cash outlays related to the intended closure are expected to occur over the next two years. Cabot expects a minimum of $6 million of annual cash cost savings, starting in calendar year 2015, as a result of this transition.
January 29, 2014
January 20, 2014
Tokai Carbon acquires Cancarb Limited for C$190M
TransCanada Corporation (Calgary, Alberta, Canada) announced today it has reached an agreement to sell Cancarb Limited and its related power generation facility to Tokai Carbon Co., Ltd. (Tokyo, Japan) for aggregate gross proceeds of C$190 million, plus customary adjustments. The transaction is expected to close late in the first quarter of 2014, subject to various approvals.
According to TransCanada, the Cancarb divestiture allows TransCanada to focus on its core business of large-scale pipeline and power generation projects in Canada, the United States and Mexico. J.P. Morgan Securities LLC acted as the exclusive financial advisor on the transaction.
TransCanada acquired Cancarb in 1981. Cancarb is the world’s largest producer of “thermal carbon black,” a specialized form of carbon derived from super-heated natural gas, which is used in a wide range of industrial and automotive products including high-grade rubber, insulation and ceramics. The adjoining 41-megawatt power plant that was added in 2001 captures large volumes of waste heat from the manufacturing process to produce electricity that is sold into Medicine Hat’s electrical grid, helping to reduce greenhouse gas emissions.
“Low natural gas prices, combined with Cancarb’s strong performance and global market share for thermal carbon black, made it an attractive investment for prospective buyers,” said Russ Girling, TransCanada’s president and chief executive officer in a press release.
Tokai Carbon is not currently a producer of thermal black, but is the seventh largest producer of furnace black in the world, with about 500K of annual capacity at plants in China, Japan, and Thailand. Other leading producers of medium thermal black are Orion Engineered Carbons, based in Germany, and Gazprom Pereabotka, based in Russia.
January 13, 2014
US light vehicle sales expected to top 16M in 2014 for the first time since 2007
Tire Business reports that multiple forecasting agencies covering the automotive industry expect US light vehicle sales to exceed 16 million units in 2014 for the first time since 2007, bringing to a close an extended period of very difficult restructuring in the US auto industry following the recession. Further, the US auto industry is in stronger shape now than in the pre-recession days, when the industry regularly over-produced and was forced to sell of excess inventory at cut-rate prices. In addition, a significant decline in the number of auto dealerships in the US means that each dealership should be selling more cars.
According to Tire Business, current forecasts for US light vehicle sales in 2014 include the following:
- IHS Automotive: 16.03 million – expects sales to remain about 16M/year through at least 2019
- LMC Automotive: 16.2 million
- Kelley Blue Book: 16.3 million
- Edmunds: 16.4 million
- Toprack Consulting: 16.5 million
- Ford Motor: 16 to 17 million, including about 300K medium- and heavy-duty trucks
US ITC retains antidumping duties on Chinese OTR tires
As reported in Rubber News, last week the US International Trade Commission decided to retain antidumping and countervailing duties against Chinese off-the-road tires that have been in place since 2008. Meanwhile, the same Chinese companies affected by the duties continue to press forward with a claim that the 2012 law allowing countervailing duties to be levied against Chinese goods is unconstitutional.
In 2008, the ITC, responding to a case brought by Titan Tire Corp. and the United Steelworkers union, ruled, first, that Chinese importers were selling OTR tires at below fair market value and, second, that these imports were causing material injury to the US. In response, the ITC instituted both antidumping and countervailing duties. The ITC is required to review the duties annually to determine if revoking them would cause the recurrence of material injury to US industries.
January 1, 2014
Happy New Year
Here’s wishing all of you a happy, healthy, and prosperous 2014! Thanks for reading!
