WUHAI, China—Cabot Corp., through its wholly owned subsidiary Cabot China Ltd., has signed an agreement with Inner Mongolia Hengyecheng Silicone Co. Ltd. (HYC) to form a joint venture to manufacture fumed silica in China.
The firms signed the agreement on Sept. 12. Cabot said in a news release that it will hold an 80 percent of the venture and HYC will own the remaining 20 percent.
“We are pleased to partner with an industry leader and innovator such as Cabot to build this state-of-the-art fumed silica plant,” Wang Yongquan, chairman of Zhejiang Zhongcheng Holding Group Co. Ltd., parent company of HYC, said in a statement. “Not only will we have access to Cabot's silica for use in our silicone compounding operation, but we also will be able expand production efficiencies through the utilization of a closed loop system.”
The joint venture will invest about $60 million to build a fumed silica manufacturing facility in Wuhai with the capacity of 8,000 metric tons of fumed silica per year. Once the venture obtains the necessary governmental and regulatory approvals, Cabot said construction is projected to begin in early 2017 and is schedule for completion in 2019.
Cabot said the project will allow it to meet growing demand for its high-quality, high-performance fumed silica. According to Cabot's website, its fumed silica is used in a variety of applications including adhesives, coatings, food, greases, pharmaceuticals, silicone rubbers and silicone sealants.
“Growing in our core is a key component of our new corporate strategy, and today's announcement is confirmation of our ongoing commitment to this strategy. We are a market leader for fumed silica, and this investment will further strengthen our position in this core market,” Sean Keohane, Cabot president and CEO, said in a statement. “Cabot has achieved tremendous success over the years in China, and we continue to see great opportunities to innovate and support our customers while being a model for sustainable production in China. We are partnered with a leader in HYC, and through this partnership we will establish a world-class fumed silica production site in China.”
Headquartered in Boston, Cabot is a global specialty chemicals and performance materials company that provides rubber and specialty carbons, activated carbon, inkjet colorants, cesium formate drilling fluids, fumed silica, and aerogel.