David Shaw of Tire Industry Research called my attention to this article from China Times. The Chinese language article reports that seven key members of the Board of Directors at Longxing Chemical (Shahe, Hebei, China) have resigned per a notification to the Shenzhen Stock Exchange. Longxing Chemical is the third largest carbon black producer in China and a leading producer of precipitated silica.
According to the notice, the seven resignations are:
- Yu Jumei, General Manager and Senior Accountant
- Ma Baoliang, Deputy General Manager
- Ms. Li Ying, Chief Financial Officer
- Liu Heshan, Board member
- Lixue Bo, General Manager
- Jiang Hao, Director
- Zhou Wenjie, Vice Director and Supervisor
At a Board meeting on May 17, the following replacement appointments were made:
- Mr. Zhang Wenbin, General Manager and Chief Financial Officer
- Mr. Ren Weiliang, Executive Vice President (responsible for the company’s overall carbon black business)
- Mr. Qi Yong, Deputy General Manager
According to the article, there are three reasons that the management of Longxing Chemical decided to resign at this time:
1. The company had planned financing and reorganization for three times in 2011 and 2015, respectively. However, all plans failed after all.
2. The company failed in the competition with the peer company (Jiangxi Black Cat Carbon Black Inc.,Ltd.). Longxing Chemical ranks No.3 in carbon black field, however Jiangxi Black Cat Carbon Black Inc.,Ltd. ranks No.1. The main reason for the failure is the higher cost of feedstock for Longxing Chemical compared to Black Cat. (Black Cat is back-integrated into coal tar distillation but Longxing is not.)
3. The price of carbon black continues to decline due to excess capacity. Now Longxing Chemical falls into losses. This situation destroys the confidence of the board. As a result, the board decided to resign before the situation becomes worse.
The company has called an EGM (Extraordinary General Meeting) for June 2 at 9:30 AM. Voting on the new board will be open on the web June 1 and June 2.
Related public filings (all Chinese language):
Sid Richardson Carbon, the largest carbon black producer in the United States, today announced a price increase for carbon black effective July 1, 2016, or as contracts allow. Price increases of 4% to 6% will be implemented. The company also will implement changes to its Standard Terms and Conditions of Sale and its Standard Packaging and Premium Charges, in each case effective July 1, 2016.
In the press release announcing the increase, William Jones, President and CEO of Sid Richardson Carbon, said that the price increases are necessary to offset increased operational costs associated with increasing governmental regulations, increases in the cost of labor and capital equipment necessary to maintain plant infrastructure, and inflation-related impacts.
Here is the press release.
Notch Consulting has updated the Silica Market Update, which provides a comprehensive overview of current conditions and future prospects for the global precipitated silica industry. The report provides tables detailing silica demand by region, market, and application, current pricing by application and region (US, EU, China), nameplate production capacity by company, plant, and country, and recent and proposed capacity expansion projects. This update includes a breakdown of annual precipitated silica sales for leading suppliers by region and major application. The report provides annual demand for all years 2007 through 2015, while forecasts are provided for all years from 2016 to 2020 as well as 2025. Market segments covered in the report include tires, non-tire rubber, dentifrice, nutrition/health (food, ag feed, pharma, and cosmetics), and industrial (paper, battery separators, paints/coatings, other applications). Applications are reinforcing fillers, abrasives, thickeners, anticaking agents, carriers, extending fillers, battery separators, matting/flatting agents, antiblocking agents, and defoamers. Average pricing is provided for various grades for the US, the European Union and ChinaAs always, the report includes a separate Excel spreadsheet providing extensive supplemental data.
For more information on this report, please write to email@example.com.
MAKROchem, a carbon black distributor based in Lublin, Poland, is investing $7.5 million on its first distribution center in the United States, which will be located in an existing building in Lancaster, South Carolina. The 183,000-square-foot facility is expected to be operational this year, and the company will begin hiring up to 20 employees for the site in May. Jacek Niemczyk, MAKROchem’s North American project coordinator, has said that the new trans-loading station will supply North American customers with carbon black for tire and non-tire rubber markets. MAKROchem is a leading distributor of carbon black in Europe.
According to sources at MAKROchem, the new operation will import carbon black primarily through Charleston, as well as Norfolk, Baltimore, Greer Inland Port, and the Charlotte Inland Terminal. The site will offer 12,000 tons of warehousing capacity for supersacks, as well as up to 2,000 tons in bulk rail cars. The site will provide delivery of carbon black in bulk silo trucks and supersacks, with railcar delivery to be added by the end of 2016.
This week I’ve been at the Carbon Black China conference in Haikou, Hainan, China, where Notch was honored to present a keynote address on future prospects of the global carbon black industry. The Chinese conference is held every other year at different locations in China. The conference has been held for many years but was only opened up to international attendees ten years ago, in 2006. Notch has presented papers at the last three CBC conferences, held in Guilin, Hangzhou, and Kunming. The conference is heavily focused on the Chinese industry, and attendance is about 90% Chinese. The papers are quite comprehensive and detailed, with a level of information sharing that would be unusual in a Western conference. There is an assumption that if a Chinese company determines a better way to do something, they have an obligation to share their findings.
The mood at the conference was cautiously optimistic, as China’s carbon black industry had a very tough year in 2015. Production volumes in China declined year-over-year by 1.9% to just over 5 million tons — the industry’s first annual decline in some 20 years. Exports declined 13% in 2015 while domestic demand was flat. Selling prices fell sharply due to both lower feedstock and energy prices as well as intense price pressures brought on by overcapacity and a weak tire industry, which is also faces weaker demand and severe overcapacity. Fan Ruxin of the China Carbon Black Institute presented the results of the industry’s 12th Five Year Plan, which ended in 2015, along with a blueprint for improvements to be implemented in the 13th Five Year Plan, which began in 2016. Dr. Soumen Chakraborty of Himadri Chemicals & Industries presented an excellent paper on the Future Prospects of the Carbon Black industry, Michael Spahr of IMERYS Graphite & Carbon gave a talk on Conductive Blacks, and Anil Kumar of PVTI gave a talk outlining a 360 degree approach to the business. All in all another excellent conference from the folks at China Carbon Black.
Photos: Hainan Taoism Cultural Court
Kemya, a joint venture between Sabic and ExxonMobil, and Continental Carbon Company have officially announced the start-up of a new carbon black plant located in Al-Jubail, Saudi Arabia. The Kemya facility has a capacity of 50,000 mt and will primarily serve the tire industry. Continental Carbon provided the technology for the project, and the new plant incorporates the company’s latest technical advances. The products will be commercialized by Continental Carbon Europe, under the Continex tradename. Construction on the plant was completed around third quarter last year.
Monique Lempereur, Managing Director of Continental Carbon Europe commented: ‘This new plant represents a unique opportunity for Continental Carbon to develop and expand its presence not only in Europe, Middle East, and Africa but also in the Asia Pacific region. The new organization, headquartered in Belgium, south of Brussels, will offer its customers with a premier customer care support combined with a complete supply chain service. The license to Kemya is also bringing to the market a new competitive source of carbon black produced by a large and reputable joint venture.’
Here is the press release.
On March 18, Birla Carbon announced a restructuring plan for its operations in Europe and Africa. The company will shut down its carbon black plant in Hannover, Germany and will permanently remove one production line in Alexandria, Egypt. The plan also calls for a “significant reduction of regional corporate personnel.” Birla Carbon plans to consolidate operations at its remaining manufacturing sites in the region. The announcement did not include details for how many workers would be affected or how much capacity would be removed. The restructuring activities will begin immediately and are expected to be completed in 2016.
Here is the press release.
On Friday, Cabot Corporation announced that Patrick Prevost would resign as President and Chief Executive Officer effective March 11, 2016. He remains a member of the Board of Directors and an employee of Cabot Corporation. In December 2015, Cabot announced that Mr. Prevost would take a medical leave of absence due to a minor stroke.
Also on March 11, 2016, Cabot’s Board of Directors elected Sean D. Keohane President and Chief Executive Officer, effective March 11, 2016. Mr. Keohane was also elected a member of the Board of Directors and will serve on the Board’s Executive Committee. Mr. Keohane joined Cabot in 2002 and since November 2014 has been Executive Vice President and President of Cabot’s Reinforcement Materials segment.
The Nation, a Bangkok-based newspaper, reports that SKI Carbon Black (Mauritius), a subsidiary of Aditya Birla Group, has launched a tender offer for all remaining shares it does not own in Thai Carbon Black. Aditya Birla Group has been consolidating its carbon black under the SKI Carbon Black holding company over the last few years.
It would tender for 213.76 million shares or 71.25 per cent of Thai Carbon Black’s issued shares. At the price of Bt22 apiece, the deal will cost Bt4.7 billion.
The tender offer was filed to the Securities and Exchange Commission yesterday.
SKI recently boosted its stake in the Thai company to 28.75 per cent, which automatically forces it to launch the mandatory tender offer.
Established in 1978, Thai Carbon Black is a leading manufacturer of carbon black in Thailand with a capacity of 275,000 tonnes per annum, according to data on Aditya Birla Group’s website. It also has the capability of producing customised carbon black grades as per requirement. TCB has the unique distinction of supplying Carbon Black to all the six continents from a single location. It meets over 50% of Japan’s total Carbon Black imports and also supplies to other global markets including Indonesia, Philippines, Malaysia, China, Korea, Taiwan and Australia.