Cabot to Close Four Manufacturing Plants
Carbon black producer Cabot Corp. announced that due a “significant reduction in global demand” it will close four of its manufacturing plants in 2009 and mothball two others while delaying the launch of new capacity in China.
Boston-based Cabot did not say which of its 39 manufacturing sites it would be closing.
The company has also implemented shorter worktimes at one facility, reduced capital spending plans by $50 million this year and made a host of other cost reduction efforts. Cabot hopes to cut $80 million in costs as a result of the restructuring.
Cabot said overall volumes for its rubber blacks declined 29% globally in the most recent quarter and 22% in North America, due mainly to the automotive slump impacting demand for tires. CEO Patrick Prevost said “Demand in the [upcoming] quarter is likely to be weak. We continue to be concerned about the automotive and construction sectors.”
Cabot also reported that its Rubber Blacks Business recorded an $11 million unfavorable adjustment in order to reduce inventory values to current market prices. According to Purchasingdata.com, carbon black prices plunged in the fourth quarter of 2008. In September, they were $1.40/lb and in January, prices were 94¢/lb.
Boston-based Cabot did not say which of its 39 manufacturing sites it would be closing.
The company has also implemented shorter worktimes at one facility, reduced capital spending plans by $50 million this year and made a host of other cost reduction efforts. Cabot hopes to cut $80 million in costs as a result of the restructuring.
Cabot said overall volumes for its rubber blacks declined 29% globally in the most recent quarter and 22% in North America, due mainly to the automotive slump impacting demand for tires. CEO Patrick Prevost said “Demand in the [upcoming] quarter is likely to be weak. We continue to be concerned about the automotive and construction sectors.”
Cabot also reported that its Rubber Blacks Business recorded an $11 million unfavorable adjustment in order to reduce inventory values to current market prices. According to Purchasingdata.com, carbon black prices plunged in the fourth quarter of 2008. In September, they were $1.40/lb and in January, prices were 94¢/lb.
source: www.purchasing.com
