KINGWOOD, Texas—2016 was a very good year for Orion Engineered Carbons L.L.C., setting the company on a path in 2017 toward establishing its long-term goals, according to Jose A. Briones, Orion North American marketing manager for rubber.
These goals for 2017, according to Briones, include:
- Continuing Orion's growth in specialty and technical rubber carbon black grades;
- Expanding the specialty and technical rubber grade mix at the recently acquired Orion Engineered Carbon Qingdao in China;
- Consistently maintaining specialty product supply ahead of demand; and
- Executing strategies to shift capacity to higher-value-added products.
Integrating operations in China, with improvements in sales and product mix, was probably the most significant achievement for Orion in 2016, according to Briones.
"We had production in Asia before this, but not in China," he said. "China is one of the largest carbon black markets in the world, if not the largest."
Orion's strategy in China was very much part of its focus on specialty products, according to Briones.
"We have a very strong emphasis on shifting our portfolio to specialty products," he said.
Strengthening its specialty products portfolio also was behind the company's decision to close an unprofitable plant in France and to consolidate its South Korean operations into its Yeosu facility by mid-2018.
"Our company works continuously toward increasing the efficiency of our operations," he said. "Increasing productivity and efficiency is something we do every day."
Briones said he expects Orion to continue on a profitable path of expansion in the specialty product sector.
"I am an optimist," he said. "When I speak to our salespeople, I tell them there is no such thing as a straight commodity market."
Briones said as long as the firm understands its markets and its customers' needs, Orion will continue to innovate and sell no matter what the market is.
Carbon black market
Orion carefully and constantly monitors carbon black markets to assess total demand, according to Briones.
"It tells us the total aggregate demand, which allows us to prepare our strategy," he said.
The carbon black industry is looking at robust future growth, according to a recent report from Smithers Rapra. Smithers projects the industry's compound annual growth rate at 3.74 percent for the next five years.
Automotive trends affect both tires and mechanical rubber goods, according to Orion. The auto industry is the biggest end user of MRGs, and that demand has a direct impact on demand for carbon black, it said.