Cabot Closing Indonesia Carbon Black Plant

Leading US carbon black player Cabot is planning to close a smaller plant at Merak, Indonesia, at the end of January, cutting 50 local jobs.

The shutdown is part of a global restructuring plan that will see 300 jobs eliminated across the company’s global operations as it tries to deal with a number of challenges, including intensive competition in Asia.

With the closure of Merak, which is said to have inferior economies of scale, its capacities will be transferred to Cabot’s other Indonesian facility at Cilegon. European production facilities at Botlek / The Netherlands and Ravenna / Italy, which are said to be well utilized, will be impacted only marginally by the restructuring plan, the company said.

Cabot’s finances also have been squeezed of late by a dispute with the US Environmental protection agency EPA over implementation of the Mercury and Air Toxics Standards (MATS) regulations. The company took an impairment charge in its balance sheet for fiscal 2015 (Sept. 30) to pay EPA fines for non-compliance. The case is being appealed.

Once the world market’s largest producer of carbon black in terms of output, Cabot is now in second place behind India’s Aditya Birla, which moved up from third place following the acquisition of Columbian Chemicals. Competition from Chinese producers is also putting pressure on the US producer.