News from Notch Consulting, Inc.

July 22, 2014

Evonik Industries building precipitated silica plant in Brazil

Filed under: Silica — Notch @ 6:30 am

Evonik Industries (Essen, Germany) plans to build a plant to produce highly dispersible precipitated silica in São Paulo, Brazil by 2016. The new factory is budgeted in the mid-double-digit million euro range. Highly dispersible silica (HDS) is used mainly for high-quality low rolling resistance tires. The plant also will service South America’s food, animal feed, and agricultural industries.

Dr. Johannes Ohmer, head of Evonik’s Inorganic Materials Business Unit, said: “The new plant in Americana will enable us to offer our Brazilian and regional customers high-quality silicas from local production in combination with our outstanding services.”

According to Evonik, the market for low rolling resistance tires and, consequently, for HD silicas, has been growing much stronger than the market for conventional tires in South America. Evonik expects additional demand due to a planned tire labeling program for fuel efficiency for passenger car tires in Brazil. Evonik is the only company in the world that offers both HDS and silane coupling agents, which are used to improve the dispersion and processing of silica in the compound.

Evonik is expanding its silica capacities throughout the world: By the end of 2014 alone, they will have grown by around 30 percent compared to 2010. In Chester, Pennsylvania, a plant for precipitated silica with an annual capacity of about 20,000 metric tons is scheduled to begin operations in 2014. The expansion in North and South America follows expansions that have already been completed in Europe and Asia.

In addition to precipitated silica, Evonik Industries produces Aerosil fumed silica and Acematt silica-based matting agents. Evonik has a worldwide capacity of about 550,000 metric tons per year for precipitated silica, fumed silica, and matting agents together.

July 10, 2014

Equity firm acquires Emerald Performance Materials

Filed under: Rubber Chemicals — Notch @ 5:07 pm

Rubber News reports that New-York-based private equity firm American Securities L.L.C. plans to acquire specialty chemicals maker Emerald Performance Materials L.L.C. from Sun Capital, Inc. The deal is being executed with the cooperation of members of Emerald’s management team. Emerald, which is based in Cuyahoga Falls, Ohio, was formed in 2006 as an affiliate of Sun Capital Partners, following the divesture of certain businesses from Lubrizol. The company produces chemicals for a range of niche consumer and industrial markets—including tires, structural adhesives, coatings, composites, flooring, flavors and fragrances, and food and beverages. The transaction is expected to close in the third quarter and is subject to customary closing conditions and regulatory approvals. Financial details and the names of the members of the management team involved in the purchase were not disclosed.

July 2, 2014

Evonik building silanes research center in Germany

Filed under: Rubber, Silica, Tires — Notch @ 6:00 am

Evonik Industries (Essen, Germany) is building a new research center for silanes at its factory in Rheinfelden, Germany. Ground-breaking was held on June 30, 2014 and the facility is scheduled to be complete in early 2016. The investment was valued in the “double-digit-million euro range.” Silanes are used in electronics, tires, adhesives and sealants, and plastics. Application engineering, analytics, and quality management will also be located in the new research center in the future. The center is a logical fit for the Rheinfelden site, which supports an integrated silane chemical production network encompassing research, development, application technology, and production.

The new research center will house up 70 employees in an area of around 3,500 square meters. In a press release on the project, Peter Dettelmann, head of the Rheinfelden site, explained its focus of activity as follows: “The silanes we are researching into here make chips in smartphones faster and more efficient, protect buildings from corrosion and dirt, and enable fuel-saving tires or longer-lasting paints.”

Evonik produces silanes at its sites in Rheinfelden, Germany; Antwerp, Belgium; Rizhao, China; Mobile, Alabama; and Weston, Michigan. The specialty chemical company also operates laboratories for application technology support and regionally specialized research for silanes in China, India, Germany, and the United States. Evonik’s silane portfolio comprises chlorosilanes and organo- functional silanes with an overall annual capacity of 300,000 metric tons.

Here is the press release.

June 23, 2014

PCBL announces new carbon black plant in Egypt

Filed under: Carbon Black — Notch @ 2:43 pm

Phillips Carbon Black Ltd. released plans for a new carbon black plant to be built in Borg El Arab, Alexandria, Egypt. The plant would cost US$170 million with capacity of 140,000 tonnes/year and startup in early 2016. This project was first mentioned in PCBL’s Investor Outlook from May 2013, but no details were provided at that time.

India’s biggest producer of raw carbon black, RP-Sanjiv Goenka Group plans to build a USD 170 million carbon black plant in Alexandria, according to a board member at the Egyptian Indian Polyester Company (EIPC). “The project will be located at Borg El Arab, Alexandria and spread over an area of 200,000 square meters,” Amre Fayed, a member of Board of Directors told Zawya.

“The group will invest USD 170 million in the first stage to produce 140,000 tons of carbon black, which is used in the manufacture of tyres,” he said.

The company, which is the world’s sixth biggest producer of carbon black, has ‘completed all technical and financial studies’ related to the project and submitted required papers to various Egyptian authorities for approval to start work on the plant.

Fayed said the plant is expected to start production by the beginning of 2016; around 20 percent of production will cater to domestic demand and 80 percent to exports.
When completed, the project will provide about 1,400 direct and indirect job opportunities.

May 26, 2014

China moves to scrap 5M vehicles this year

Filed under: Auto — Notch @ 2:31 pm

From Reuters comes news of plans by the Chinese government to remove five million aging vehicles from the country’s clogged roadways this year alone, including 330,000 vehicles in Beijing alone.

In a wide-ranging action plan to cut emissions over the next two years, China’s cabinet, the State Council, said the country had already fallen behind in its pollution targets over the 2011-2013 period and was now having to step up its efforts.

As many as 5.33 million “yellow label” vehicles that fail to meet Chinese fuel standards will be “eliminated” this year, the document said. As well as the 330,000 cars in Beijing, 660,000 will be withdrawn from the surrounding province of Hebei, home to seven of China’s smoggiest cities in 2013.

Beijing plans to limit the total number of cars on the road to 5.6 million this year, with the number allowed to rise to 6 million by 2017. Last year it cut the number of new licence plates by 37 percent to 150,000 a year and is also paying for another 200,000 ageing vehicles to be upgraded.

May 21, 2014

Sid Richardson foresees carbon black shortages in US by 2016

Filed under: Carbon Black — Notch @ 3:40 pm

The United States can expect to see supply shortages of carbon black by 2016, according to Gregory King, vice president of marketing for Sid Richardson Carbon Co. As reported by Tire Business, Mr. King made the comments at the Clemson University Global Tire Conference, held every year in Hilton Head, South Carolina.

“There will be a shortage of carbon black starting in 2016, provided that everyone’s expansion plans for tire production go forward as assumed,” Mr. King said. “Starting in 2016, we’re going to be out of balance.”

Carbon black nameplate manufacturing capacity in the U.S. and Mexico stands at 4.63 billion pounds per year, Mr. King said.

However, EPA efforts to control sulfur oxide and nitrogen oxide emissions from U.S. carbon black facilities will cause domestic capacity to fall to 4.11 billion pounds by 2020, according to Mr. King. Projected demand for that year points to a production shortage of 465 million pounds.

As previously report on this blog, Cabot Corporation was the first of the US carbon black makers to reach an agreement with the EPA regarding emission levels. As a part of the settlement, Cabot committed to install advanced control technology and continuous emission monitoring systems on its U.S. plants. The control technologies will be installed and commissioned over a six-and-a-half year time period at a cost of approximately $85 million.

Sid Richardson and the other US carbon black makers are in active talks with the EPA on how to cut emissions, but Mr. King pointed out in his comments that a one-size-fits-all approach may not work.

“Controlling sulfur-oxide emissions is a matter of installing wet scrubbers,” he said. “We have two plants in west Texas, and we’re not sure we can get enough water there to absorb all emissions. Maybe we could consider air preheating or other options, or find ways to use less oil.”

In any case, the industry can expect an increase in production costs because of the operating cost components over and above the capital costs, Mr. King said.

Notch Consulting is currently tracking $5 billion in new investments in the North American tire industry from 2013 through 2020, of which $4.7 billion will be in the United States.

May 16, 2014

Evonik opens new Applied Technology center in Germany for precipitated silica in tires and rubber

Filed under: Silica — Notch @ 8:19 am

On May 15, 2014, Evonik Industries inaugurated a new building to house precipitated silica applied technology for tire and rubber at its Wesseling site near Cologne, Germany. Evonik invested an amount in the low tens of millions of € in the new building. The building was completed in 13 months and 34 technicians and scientists have been working there since October 2013. Evonik supplies precipitated silica to the tire industry globally from Wesseling where silica production and research were previously located. Thus it made sense to re-locate application engineering to the Wesseling site. Evonik will use the 2,500-square-meter building to develop and test new silica products for the rubber industry. Strict quality control, which is standardized worldwide, is applied to several thousand mixtures annually. The building is heated using waste from the plant’s silica production.

Evonik is in the midst of a worldwide capacity expansion program for its precipitated silica business. In March 2014, it opened an expanded precipitated silica facility in Thailand; in May 2013, it initiated planning for a new facility in Brazil; and it will begin operations later this year in an expanded facility in Chester, Pennsylvania, USA. Evonik’s global silica production capacity will increase by approximately 30 percent over its 2010 capacity by the end of 2014.

Here is the press release: 05-15-IM-Evonik_inaugurates_new_bulding_for_its_Applied_Technology_for_tire_and_rubber_in_Wesseling

April 30, 2014

Evonik Industries announces price increase for silica

Filed under: Silica — Notch @ 11:24 am

Evonik Industries yesterday announced that its Inorganic Materials Business Unit will raise the sales prices for its silica products, metal oxides and matting agents as of June 1st 2014. The fumed silica and metal oxides are sold under the brand names AEROSIL® and AEROXIDE®. The precipitated silica are sold under the brand names ULTRASIL®, SIPERNAT®, SIDENT® and ACEMATT®. The prices will be increased by up to eight percent or as contracts allow. This measure is needed to secure sustainable supply.

April 27, 2014

Orion Engineered Carbons files for IPO

Filed under: Carbon Black — Notch @ 10:28 pm

On April 22, 2014, carbon black producer Orion Engineered Carbons Holdings GmbH (Frankfurt, Germany) submitted a filing to the Securities and Exchange Commission to raise up to $300 million in an initial public offering with the intent to list on the New York Stock Exchange. A copy of the filing can be found here and a synopsis of the filing can be found here. The SEC filing did not disclose pricing terms. The deal is being handled by Goldman Sachs, Morgan Stanley, and UBS Investment Bank. Orion Engineered Carbons was formed in 2011 when Rhone Capital L.L.C. and Triton Advisors Ltd. purchased the carbon black unit of Evonik A.G. for €900 million. Orion operates 14 carbon black plants worldwide, including one majority-owned joint venture plant in China (Qingdao Evonik Chemicals) that Orion currently is seeking to wholly acquire. The sale is subject to ongoing Chinese government review and negotiations with Evonik and between Evonik and its joint venture partner. Orion is currently structured as a German limited liability company (Gesellschaft mit beschränkter Haftung, or GmbH) headquartered in Frankfurt am Main, Germany.

In 2013, Orion generated revenues of €1.3 billion based on volume sales of 968 kilotonnes of carbon black, including both specialty and rubber grades. According to the SEC filing, 34% of sales were in Europe, 24% were in North America, 24% were in Asia, 7% were in Brazil, and 11% were in Africa and elsewhere. According to its filing, Orion produces more than 280 specialty carbon black grades and about 70 rubber carbon black grades. According to the filing, Orion expanded its capacity in Korea in 2013, and is making incremental expansions in rubber black capacity at plants in the United States, Europe, and Brazil. Orion also commissioned an after-treatment facility for specialty carbon blacks in Germany in 2014.

April 24, 2014

Notch publishes new report on automotive extended mobility systems: run-flat tires, tire repair kits, and self-sealing tires

Filed under: Auto, Run-flats — Notch @ 6:00 am

In 2008, 69% of all passenger cars assembled worldwide came equipped with a full-size spare tire, but by 2012 that number had fallen to just 48% as automakers sought to reduce vehicle weight and save space. By 2020, the number of cars with full-size spares is forecast to fall to 36%. Notch Consulting has published a new multi-client market research report that examines the systems that are replacing the spare tire in new cars: Prospects for Extended Mobility Systems: Run-Flat Tires, Tire Repair Kits & Self-Sealing Tires in OEM Passenger Car Markets. This 77-page report includes 17 tables detailing demand for each of these three products in OEM passenger car markets by region and by customer, as well as average pricing, market share by supplier, and profiles of leading suppliers. The report provides demand in units for all years from 2008 through 2013, as well as forecasts for all years from 2014 through 2020. Data on run-flat tires covers all years 2002 through 2020 and include both OEM and replacement demand. Contact Notch at info@notchconsulting.com for more information or to order.

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