News from Notch Consulting, Inc.

August 30, 2010

Evonik introduces two new silicas for silicone rubber

Filed under: Silica — Notch @ 10:50 am

On August 30, Evonik Industries announced the introduction of two new grades of SIPERNAT® specialty silicas intended for use in the silicone rubber industry: SIPERNAT® 288 and SIPERNAT® 268. These new SIPERNAT® products are intended for use in high-temperature vulcanized silicone rubber, liquid silicone rubber, and two-component room-temperature vulcanized silicone rubber. Specific applications include highly transparent end products such as keyboards for mobile telephones, computers, remote controls, etc. According to Evonik, the grades offer reduced yellowing, good mechanical properties, and ease of processing and dispersibility. SIPERNAT® 288 and SIPERNAT® 268 are manufactured by Evonik Wellink Silica (EWS) in Nanping, China.

Here is the press release.

August 25, 2010

Carbon Green deregisters with SEC

Filed under: Carbon Black, Tire Recycling — Notch @ 3:36 pm

Carbon Green Inc. (OTCBB: CGNI), a supplier of recycled carbon black based in Bratislava, Slovakia, announced on August 20 that it had voluntarily deregistered its common stock with the the Securities and Exchange Committee. Carbon Green expects to continue its operations as a privately held company. Here is the press release.

Carbon Green Inc. (the “Company” or “Carbon Green”) (OTCBB: CGNI) announced today that it has suspended its reporting obligations under the Securities Exchange Act of 1934 by filing a Form 15 with the Securities and Exchange Commission on August 20, 2010. Filing of the Form 15 will also accomplish a voluntarily deregistration of Carbon Green’s common stock. It is eligible to suspend its reporting obligations and deregister its common stock because there are less than 300 holders of record of Carbon Green’s common stock.

Upon the filing of the Form 15, Carbon Green’s obligation to file certain reports with the SEC, including Forms 10-K, 10-Q, and 8-K, was immediately suspended. Carbon Green expects that the deregistration of its common stock will become effective 90 days after the date of filing the Form 15 with the SEC.

Carbon Green simply is not well-suited to being a public reporting company because of the limited number of shareholders. The limited number of shareholders and difficulty in trading shares among such a small group leads management to believe it is unlikely Carbon Green will be able to establish a meaningful public trading market for its common stock in the foreseeable future. Management believes having an active trading market is one of the principal benefits of being public, in that it provides liquidity and access to the capital markets for capital formation. Without a meaningful trading market, this benefit is not available and it does not seem prudent to continue to incur the cost of regulatory compliance that goes along with being a reporting company.

In light of the foregoing circumstances management expects Carbon Green will go forward viewing itself as a privately-held company, it will not attempt to facilitate a public trading market in Carbon Green common stock, and it will evaluate new options for restructuring and capital formation. Such options could involve the sale of additional securities, a merger or restructuring (which could include a cash-out elimination of minority stockholder interests), joint ventures, or other arrangements.

August 23, 2010

Epic Chinese traffic jam enters ninth day

Filed under: General — Notch @ 12:58 pm

Massive traffic jams on the highways leading into Beijing (National Expressway 110, or G110, and the Beijing-Tibet Expressway) have entered their ninth day.

From AFP:

Thousands of vehicles were bogged down Monday in a more than 100-kilometre (62-mile) traffic jam leading to Beijing that has lasted nine days and highlights China’s growing road congestion woes.

The Beijing-Tibet expressway slowed to a crawl on August 14 due to a spike in traffic by cargo-bearing heavy trucks heading to the capital, and compounded by road maintenance work that began five days later, the Global Times said.

. . .

That stretch of highway linking Beijing with the northern province of Hebei and the Inner Mongolia region has become increasingly prone to massive jams as the capital of more than 20 million people sucks in huge shipments of goods.

From Chinese state media:

Since August 14, thousands of Beijing-bound trucks have jammed the expressway again, and traffic has stretched for more than 100 kilometers between Beijing and Huai’an in Heibei Province, and Jining in Inner Mongolia Autonomous Region, China National Radio (CNR) reported Sunday.

. . .

For drivers, suffering the congestion on the Beijing-Tibet Expressway is nothing new. In a similar scene this July, traffic was also reduced to a crawl for nearly one month.

When seeing news like this, one obvious conclusion is that China will need to continue to make massive investments in infrastructure over the next few decades. But it also makes me ponder the question: how many cars can China actually support?


Photo: Reuters

August 17, 2010

Notch Publishes Carbon Black World Data Book 2010

Filed under: Carbon Black, General — Notch @ 7:00 am

Notch Consulting is proud to announce the publication of the 2010 edition of the Carbon Black World Data Book. Published annually, the Carbon Black World Data Book is an essential resource for anyone involved in the carbon black industry, whether as a producer or purchaser. The report provides extensive data on carbon black capacity, capacity utilization, production, imports, exports, apparent consumption, demand by market (passenger tires, truck tires, other tires, non-tire rubber goods, and specialty) and demand by grade (tread, carcass, and other), as well as market value and average pricing. This truly is the most comprehensive and up-to-date report available on the carbon black industry.

Responding to the global economic crisis and a severe downturn in the motor vehicle industry, the carbon black industry faced one of its most challenging periods in its modern history from the end of 2008 through the first half of 2009. Global carbon black demand was down 19% during the first half of 2009 compared to 1H 2008, or 29% if China is excluded from the data. Nearly alone among major economies, China and India, after sharp but short-lived downturns, bucked the global trend and posted strong gains in 2009, driven by their domestic motor vehicle and tire industries. China in particular saw volume growth of nearly 19% in 2009. Outside of these countries, however, conditions were grim, with Japan’s market down 35% for the year, North America down 20%, and the European Union down 25%. Utilization rates were among their lowest on record, and suppliers removed substantial capacity in North America and Europe, while numerous units were temporarily idled across all regions. The global carbon black market bottomed out in 2Q 2009 and began a robust recovery in 3Q 2009 has been sustained through 3Q 2010. Given these results, 2010 is expected to be a strong recovery year for all regions, though rates of growth vary. Capacity expansion activity has resumed, and 2010 looks to be a strong year for expansions, led by China.

For more information or to order this report, write to info AT notchconsulting.com, call Notch Consulting at 413-253-7733, or visit Notch’s website.

Click here for an overview of the report.

August 16, 2010

EPA Requires US Carbon Black Producers to Report GHG Emissions

Filed under: Carbon Black — Notch @ 1:14 pm

The U.S. Environmental Protection Agency has issued new regulations that mandate greenhouse gas reporting in the U.S. carbon black industry. These regulations were the impetus for the development of a new ASTM International standard, ASTM D7633, Test Method for Carbon Black Carbon Content.

“Carbon black producers and contract laboratories will be the primary users of ASTM D7633,” says George Joyce, Manager, Materials Analysis Laboratory, Columbian Chemicals Co. Joyce says that the new standard may be adopted into U.S. and Canadian greenhouse gas regulations, and may also eventually be adopted by other national environmental agencies, including those of European Union countries that already have greenhouse gas reporting requirements.

“I anticipate global acceptance and utilization of ASTM D7633 since it is the only applicable testing standard available for carbon content of carbon black products,” says Joyce.

According to Joyce, ILS participants will need to have a carbon combustion analyzer in their laboratory. “Our current test method utilizes a combustion analyzer with infrared detection, but the committee will open participation to labs using all types of carbon combustion analyzers.”

In addition, Joyce notes that D24.66 is currently developing a proposed new standard, ASTM WK27667, Test Method for Carbon Content in Carbon Black Feedstock Oils. The proposed standard will be applicable to most commercial feedstock oils used to produce carbon black products in a furnace or thermal process.

Goodyear Ramps Up Danville as Truck Tire Demand Improves

Filed under: Carbon Black, insoluble sulfur, Tires — Notch @ 12:39 pm

From R&P News comes word that Goodyear is ramping up production at its Danville, Virginia tire plant by bringing back laid-off employees and returning to a continuous seven-day workweek. The plant cut back production in March 2009 from continuous operation to a normal schedule of three shifts five days per week. The increase is spurred by recovery in the aviation and commercial truck tire markets.

Why Did Michelin’s PAX Run-Flat Fail?

Filed under: Run-flats — Notch @ 11:54 am

Rita McGrath, blogging at Harvard Business Review, provides a short post-mortem on the failure of Michelin’s PAX run-flat tire system, which was discontinued in April 2008 after failing to catch on in the marketplace and prompting several class action lawsuits.

It turned out that to use the flat-run tires, the underbody of the cars had to be redesigned, and cash-squeezed auto makers proved reluctant to make the necessary investment. Also, replacing the tires required special equipment that most mechanic’s shops didn’t have and didn’t invest in. Say you had a flat-run tired and it failed, You’d have to go on a bit of a treasure-hunt to find someone who could replace it. Finally, if you did find a new PAX tire, it could cost upward of $1,200, about twice what customers expected to pay for a performance product.

Rita McGrath has written before on PAX, including this 2008 piece that includes many of the same points.

Earlier thoughts on the failure of PAX can be found here.

Buy Phillips Carbon Black: Choksey Securities

Filed under: Carbon Black — Notch @ 11:18 am

From the Economic Times, Deven Choksey, MD, an analyst with KR Choksey Securities, discusses his buy recommendation on Phillips Carbon Black.

For Phillips Carbon Black, the first comfort factor that we have in this company is that this is a company where you have got a huge amount of marginal safety.

It is just available at around 4 times odd to its future price earning multiple and having a carbon black capacity of about 3,60,000 tonnes and they are expanding it by about 1,15,000 tonnes additional and along with that, they have got about 60 megawatts power, which they are expanding by another 88 megawatts.

Now the power like in sugar industry is a by-product for them but if you look at the bottom line contribution in the last year, the power ended up contributing about more than 60% to the bottom line because the entire gas that is getting generated from the carbon black business is a feed stop for the production of power which is just about 60 paisa per unit cost vis-à-vis that they end up selling at about Rs 5 per unit kind of a thing out of which whatever they produce, 30% is captive and 70% is merchant sell.

All put together, this company is now moving probably into higher space with 157 to 160 crore profit in the current financial year and next year about 200 crore plus profit. So we find it much comfortable.

August 12, 2010

Rhodia Starts up Tire Silicas Plant in Qingdao, China

Filed under: Silica — Notch @ 7:00 am

In early August 2010, Rhodia Silcea completed construction on its new precipitated silica plant in Qingdao, China, where the company already operates a silica plant. The plant focuses on high performance silicas for the tire industry with a capacity of 72,000 tonnes/year. The plant will operate as Rhodia Silcia Qingdao Chengyang. Originally scheduled for completion in 2009, construction was delayed by the downturn in the tire industry. The plant will be commissioned on October 20.

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