BOSTON--(BUSINESS WIRE)--Nov. 11, 2015--
Cabot
Corporation (NYSE: CBT) announced that its carbon black
manufacturing facility in Merak, Indonesia will close. It is anticipated
that manufacturing operations will cease by the end of January 2016.
“To be successful over the long term, we must continue to focus on
improving profitability through cost savings and increased operational
efficiency while also producing the highest quality products that meet
our customers’ needs,” said Sean Keohane, president, Reinforcement
Materials Segment. “The decision to consolidate manufacturing across
Asia Pacific is a critical step in our plan to ensure that we are
operating as efficiently and effectively as possible to become more
competitive in a challenging environment, and to accelerate future
growth.”
The decision, which will affect approximately 50 local employees, was
driven by the Merak facility’s financial performance over the past few
years. Despite efforts to be competitive, the facility has suffered from
low utilization rates. Asia is quickly becoming one regional market and
this dynamic has created the need for our facilities to be even more
cost competitive. As such, we will consolidate production in Asia by
ceasing production at our Merak facility and using our Cilegon,
Indonesia as well as other Asian and global carbon black production
sites to meet the regional demand.
Indonesia remains a strategic country for Cabot’s carbon black business.
Its tire manufacturing industry supplies growing local and global
demand. Cabot is committed to engaging with customers currently served
from the Merak plant to determine how best to meet their needs during
and after the shutdown of production. Cabot will leverage its global
manufacturing reach to continue to offer quality products and technical
services to its customers in Indonesia as well as throughout Asia
Pacific.
“We wish to recognize our colleagues in Merak, who have
worked diligently over the years to take care of our customers and keep
the facility operating as competitively as possible,” said Jeff
Zhu, president, Cabot Asia Pacific region. “The decision to close the
facility is very difficult due to the impact on our people and the
community. We have high regard for those who are affected by these
actions, and we greatly appreciate their contributions to the company.”
Cabot expects the closure plan will result in a pre-tax charge to
earnings of approximately $33 million, of which approximately $8 million
of this amount is cash and $25 million is a non-cash charge. Annual
savings related to the closure are estimated to be
approximately $8 million, of which approximately $5 million is cash.
About Cabot Corporation
Cabot Corporation (NYSE: CBT) is a global specialty chemicals and
performance materials company, headquartered in Boston, Massachusetts.
The company is a leading provider of rubber
and specialty
carbons, activated
carbon, inkjet
colorants, cesium
formate drilling fluids, fumed
silica, and aerogel.
For more information on Cabot, please visit the company’s website at: http://www.cabotcorp.com.
Forward-Looking Statements
Certain statements in this release relate to future events and
expectations and are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as
“expect”, “estimate”, “will”, “intend”, or similar words or expressions
often identify forward-looking statements. All statements other than
statements of historical fact are forward-looking statements, including,
without limitation, statements regarding our outlook, projections,
forecasts or trend descriptions. These statements do not guarantee
future performance, and we do not undertake to update our
forward-looking statements. Cabot’s actual results may differ materially
from those described or implied by our forward-looking statements based
on a number of factors, including the factors described in detail under
“Item 1A. Risk Factors” in our Form 10-K filed with the SEC on November
26, 2014 for the year ended September 30, 2014.
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Source: Cabot Corporation
Cabot Corporation
Investor Contact:
Erica McLaughlin,
617-342-6090
or
Media Contact:
Vanessa Craigie,
617-342-6015