BOSTON (Oct. 29)—Cabot Corp. plans to close its carbon black plant in Altona, Australia, by October 2005, citing slackening domestic demand and raw material supply problems.
The decision still is subject to certain consultation processes, but Chairman and CEO Kennett Burnes called the move difficult and necessary, saying "we have no viable, cost-competitive alternative for our raw material supply in Australia."
In particular, Cabot cited its raw materials supplier's decision to cease supplying Cabot in September 2005 for its decision to close Altona. Cabot will supply Australian customers from other facilities in the Asia-Pacific region, some of which are being debottlenecked to make up for the 45,000 metric tons of annual output Altona represents.
Cabot said it expects the closing will result in an after-tax charge to earnings of about $12 million over the next two years, including cash outlays of approximately $5 million. Cabot also said it anticipates a payback on the Altona closing costs in less than two years based on reduced operating costs from running fewer plants.