Growing battery market drives Orion to add carbon black additives capacity

CLEVELAND—Materials maker Orion Engineered Carbons plans to build a new carbon black additives plant in La Porte, Texas.

"We're seeing double-digit growth for this product from batteries and other areas," marketing manager Kevin Milks said in an interview at AMI Compounding World in Cleveland. "This is a way for us to bring our products closer to our customers."

He added that Orion has seen good demand in 2022, in spite of some lingering supply chain challenges.

In a news release, officials with Orion in Houston said that the plant will be the only plant in the U.S. making acetylene-based conductive additives. Those materials are "a critical link in the value chain" for lithium-ion batteries, high-voltage cables and other products used in electrification and renewable energy, they added.

The new plant will be backed by a long-term acetylene supply agreement from a neighboring site owned by Equistar Chemicals, a unit of resin maker LyondellBasell Industries. Orion's production process turns acetylene into a powder, which is added to lithium-ion batteries to enhance electrical conductivity and extend battery lifetime.

Orion will invest between $120 million and $140 million in the facility, which is expected to start up in the second half of 2024. The investment should increase the company's conductive additives capacity by about 26 million pounds per year.

"With this investment, we will quadruple our effective manufacturing capacity of acetylene-based conductive additives," CEO Corning Painter said in the release. "We are already experiencing high demand for this material, so expanding capacity for it is one of our top investment priorities and a major milestone in our growth plans. This is a very big day for Orion."

Orion already operates a similar plant in France, which is also supplied by LyondellBasell. Officials said the U.S. plant will bring new technology and high-skilled jobs to the country and will impact long-term local job creation.

Demand for battery additives is expected to grow rapidly amid a global boom in the construction of gigafactories making lithium-ion batteries, they added. Painter said that batteries "will continue to play an increasingly vital role in the world's shift toward clean energy."

Orion is a leading global supplier of carbon black. The firm's products are used in plastics, tires, coatings, ink, batteries and other applications. Orion has 14 global production plants and posted sales of more than $1.5 billion in 2021.