The carbon black industry has been one of the most active sectors of the rubber industry in recent months, ranging from tackling environmental issues to dealing with shortages and price increases, to expansions and acquisitions that will shuffle the worldwide players.
Last year ended with the climax of a decade-long probe by the U.S. Environmental Protection Agency, as the last three major players involved in the investigation signed consent decrees that brought millions of dollars of fines and commitments to invest hundreds of millions of dollars to install state-of-the-art pollution control technologies.
Then a Sid Richardson report at the annual Clemson University Tire Industry Conference detailed an expected shortfall of 375 million pounds a year in carbon black supply in North America by 2025. The situation worldwide is similar, with high utilization rates making for a tight market and—not expectedly—a number of price increases around the globe.
Earlier this year, there were reports that India's carbon black shortage was so severe that a number of small and medium rubber product makers were forced to shut down operations.
To help ease the situation, there have been a number of the major players announcing expansion plans, though it will be some time before these projects can help. Among some of the more notable plans unveiled recently, Cabot Corp. said it will spend $120 million to boost capacity at its site in Indonesia and another $50 million for debottlenecking projects across its global network.
Asia also will see other major activity. Anlun Chemical said it plans to build its facilities in Yuncheng, China, into the world's largest carbon black site. And Taiwan's China Synthetic Rubber Corp., with its utilization rates climbing, will spend more than $230 million to increase production at its operations in both India and the U.S.
And now Japan's Tokai Carbon Co. Ltd. has agreed to pay $310 million to buy Sid Richardson, the No. 1 carbon black producer in the U.S., in a deal that it says will help make it a truly global player. It said the purchase will make it the world's No. 5 carbon black manufacturer, with annual production capacity approaching 1 billion metric tons.
As the major filler material in tires and rubber goods, rubber product makers better take notice. There's likely much more to come.