Companies such as Giti Tire Group, Yokohama Tire Corp., Michelin, Bridgestone Corp., Continental A.G. and Trelleborg Wheel Systems are adding tire facilities, expanding others or converting structures in the U.S. to boost tire production in North America.
Those additions are bound to have an impact on carbon black producers, Reese said, especially from 2016-18. “As they come on line, our goal is to always participate in new capacity.”
Meanwhile, the U.S. Environmental Protection Agency has been emulating some of its counterparts in Europe and implementing stiffer wear and tire rolling resistance regulations.
That coupled with the need for better fuel economy has put pressure on tire manufacturers.
Tire producers are some of the prime customers of businesses that make carbon black, and Cabot has taken a proactive role in moving to help them both in North America and abroad, according to Reese and Jay Doubman, vice president and global business director, tires.
Key to this is addressing customer needs to develop better performing tires, they said. While rolling resistance and wear performance always have been differentiating characteristics of tires, they said the advent of tire labeling and more original equipment requirements have increased the importance of these issues.
“We've always known that both are important to our customers,” Reese said. “Now that they are being legislated, we've increased our efforts.”
In order to meet customers' needs, the Reinforcement Materials business expanded its manufacturing base and capacity during the past two years.
It opened a new zinc production facility using state-of-the-art technology in Xingtai, China, last year through a joint venture with the Risun Group, and in 2013 the firm purchased the remaining 60 percent interest in Mexican joint venture Nhumo S.A. de C.V. to strengthen its presence in North America.
Both will play important roles as Cabot continues to build its rubber carbon black growth plan in North America and Asia.
Reese noted that North American tire production is expected to grow during the next several years, which will create greater demand for rubber black. Becoming sole owner of the Nhumo facility “gives us greater access to the Mexican market with a fully owned factory and positions us to provide security of supply as our customers' demand for carbon black increases in North America.”
Cabot's new plant in China will allow the company to become a much bigger participant in that market, he said. “As China tries to penetrate better markets, tire companies will need to produce better tires there, which is where the Xingtai plant comes in.”