BOSTON—Cabot Corp. is closing its joint venture carbon black factory in Malaysia, blaming manufacturing inefficiencies and raw material costs.
The company said production at the Port Dickson, Malaysia, facility will end in July, although shipments from the site will continue for a time. The closing will affect 90 employees.
Cabot said it owns a 51-percent interest in the firm, Cabot Malaysia Sdn. Bhd., which operates as a subsidiary of the Boston-based supplier.
"We continuously evaluate how to best serve our customers, wherever they may have needs for our products and services around the globe," said Dave Miller, president of Cabot's Reinforcement Materials Segment. "In order to do this profitably, we must make choices regarding our manufacturing assets. 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."
Cabot remains committed to engaging with customers currently served from the Port Dickson plant to determine how best to meet their needs during and after the shutdown of Malaysian production, the firm said.
"One of Cabot's competitive strengths is its global manufacturing footprint, including extensive capacity throughout the Asia Pacific region," said Jeff Zhu, president, Cabot Asia-Pacific region. "We will leverage our global manufacturing reach to continue to offer quality products and technical services to our customers in Malaysia as we do throughout Asia Pacific."
The plant closure should result in one-time cash and non-cash charges to the joint venture of about $13 million and $15 million, respectively, Cabot said, and annual savings for the partnership will be approximately $7 million. Cabot owns 51 percent of the CMSB joint venture.