ESSEN, Germany—Evonik A.G. has disclosed that it will invest about $120 million to build a precipitated silica plant near Charleston, S.C., close to the production facilities of many large tire manufacturers.
In May, the South Carolina Department of Commerce approved a $500,000 Economic Development grant to assist with site preparation and construction of the project. The document disclosed that the project was expected to create 55 jobs.
The facility will be located at the Charleston International Manufacturing Center in Goose Creek, S.C., about 24 miles north of Charleston.
Evonik earlier confirmed that the facility will produce its Ultrasil-brand of rubber silica at the new facility—which are reinforcing fillers for the rubber industry. In addition to the tire industry, the product line is used in hoses, belts and rollers.
The plant is projected to be complete in 2018, Evonik said, and comes on the heels of its agreement to acquire Huber Silica, the silica business of U.S.-based J.M. Huber Corp., for $630 million in a deal that's pending approval. The business consists of about $300 million in sales, six facilities and about 4,000 employees.
"The investment is an important part of our strategy to expand our position as a global partner for the automotive supplier industry," Evonik CEO Klaus Engel said in a statement. "With the construction of the plant in the Southeastern U.S. and the planned acquisition of the silica business of Huber, we are strengthening our Resource Efficiency growth segment and are extending our leading market positon as a silica provider."
The production plant predominately will supply the tire industry. Evonik said the industry needs high-quality precipitated silica for producing fuel-efficient tires with good wet grip properties, which can save up to 8 percent fuel in comparison to conventional car tires. In North America, the demand for tires with reduced rolling resistance and the associated higher fuel efficiency is experiencing above-average growth.
The Southeast U.S. has seen a wealth of tire growth as Goodyear, Michelin, Bridgestone Corp., Continental A.G., Pirelli Tire L.L.C., Toyo Tire & Rubber Co. Ltd. and Yokohama Tire Corp. all operate tire manufacturing plants in the region. Michelin, Bridgestone and Continental all currently have manufacturing in South Carolina with Giti Tire preparing to open a site in the state too. Trelleborg A.G. also operates a specialty agriculture tire facility in Spartanburg, S.C.
Hankook Tire Co. Ltd. has a Tennessee plant near completion, and Continental recently disclosed plans construct a new plant in Mississippi.
"The proximity to the key customers in the tire industry was decisive in choosing South Carolina. We want to provide global tire manufacturers with the supply security and flexibility they expect from us in local production. That's why we invest in sites that are close to our customers," Johannes Ohmer, member of the Board of Management of Evonik's Resource Efficiency segment, said in a statement.
Headquartered in Essen, Evonik has operations in more than 100 countries with 33,500 employees. The specialty chemicals producer generated sales of about $14.9 billion in 2015.
The firm operates a colloidal silica plant in Portland, Ore., and it produces fumed silica in Waterford, N.J., and Mobile, Ala. It also is constructing a silica production facility in Brazil that is expected to be complete by the end of 2017.