ESEN, Germany—Evonik Industries A.G. will build a precipitated silica plant in Sao Paulo, Brazil, that will go online in 2016.
The company said it is investing a “mid-double-digit million euro amount” in the project, to be the first production plant for highly dispersible silica in South America. It will mainly supply products for low rolling resistance tires, according to the company.
The move responds to growth in the automotive industry in South America over the past years and increasing demand for low rolling resistance tires in the region. Evonik said it expects additional demand because of the planned labeling of the energy efficiency of tires in Brazil.
"With this investment in Brazil, we are positioning ourselves as an innovative provider of advanced inorganic materials for resource-conserving applications in the important South American market," said Patrik Wohlhauser, executive board member and chief operating officer of Evonik Industries.
Evonik is expanding its silica capacities worldwide. By the end of 2014, its capacity will have grown by around 30 percent compared to 2010. This includes silica plant anticipated to produce a 20 kilotons per year in Chester, Pa., which will start up later this year, and a plant extension completed in Thailand in March.
Evonik said its worldwide capacity is about 550 kilotons per year of precipitated and fumed silicas and matting agents.