Cabot to open new carbon black plant in China

Cabot Corporation (NYSE: CBT) and joint venture partner Risun Chemicals Company, Ltd., broke ground today on its new carbon black manufacturing facility in Xingtai, China.

The project, announced in March 2011, is scheduled to be completed in mid-2013, and will further solidify Cabot’s position as the world’s No. 1 producer of carbon black.

Cabot and Risun are investing approximately $140 million in the new facility, with Cabot owning a 60-percent equity interest. In this mutually beneficial relationship, Cabot brings technology advancements and a strong leadership position in rapidly growing China while Risun provides the feedstock and energy integration capabilities with its current operations.

The new facility, located about 250 miles (400 kilometers) south of Beijing in Heibei Province, will help support tire and automotive growth in China. Carbon black is a reinforcing agent essential in the manufacturing of tires. The material is also used in many automotive parts, including adhesives and sealants, battery materials, coatings, and more. According to IHS Automotive, China’s motor vehicle fleet is expected to grow to approximately 315 million vehicles over the next 10 years, up from 102 million vehicles today. Cabot’s industry-leading carbon black products will help to meet the needs of the tire and automotive segments in China.

Cabot and Risun’s new Xingtai facility will have a Phase I manufacturing capacity of 130,000 metric tons of carbon black per year, and will enable Cabot to increase its carbon black manufacturing capacity in China by 25 percent. The new site will employ the most advanced technologies for production of high performance carbon black materials, environmental protection and comprehensive utilization of energy recovery. These technologies will solidify Cabot’s leadership position in regard to energy efficiency and reduction of emissions.

“We’re committed to supporting China in achieving its goal of increased mobility, and we’re going to do it in a highly sustainable way,” said Patrick Prevost, Cabot president and chief executive officer. “Our customers in China value us because we’ve established our technology leadership position in this industry over the past 20 years. We’re also investing significantly in process equipment and infrastructure to increase our energy efficiency and minimize our impact to the environment. Our new facility in Xingtai demonstrates this commitment.”

“We specifically want to thank the Hebei Provincial Government, the Xingtai Municipal and County Government and Risun Chemical Co., Ltd who have been invaluable to the continuation and success of Cabot's manufacturing development in China,” Prevost said. “We are proud of our operations in China and we believe that this plant will enable us to bring brand new products to customers, and move the carbon black industry in China towards a new era of a green economy.”

“Our customers are increasingly demanding high performance materials to make their products more efficient,” said Dave Miller, president, Core Segment. “Our plant in Xingtai will be designed to deliver high performance carbon black products that are engineered to meet China’s emerging demand for higher performance reinforcing materials for tires and industrial rubber products.”

“It is with great pleasure that we take part in and celebrate the groundbreaking of this new facility and the deepening of our relationship with Cabot,” said Yang Xuegang, chairman and president of Risun Chemical Company, Ltd. “This new modern facility, which will be built in close cooperation between Cabot and Risun, will be state-of-the-art for carbon black production and will support local employment and help to meet the growing demands of the Chinese market.”

The participating entities in this new site are Cabot (China) Ltd., a wholly-owned subsidiary of Cabot Corporation and Risun Chemical Company, Ltd., a wholly owned subsidiary of Risun Coal Chemicals Group, Ltd.