Cabot buys Tokai’s Tianjin carbon black plant for $9 million

Cabot Corporation has agreed to buy Tokai Carbon (Tianjin) Co. Ltd. from Tokai Carbon Group for US$9 million. The carbon black manufacturing facility was commissioned in 2006 and is located in close proximity to Cabot’s current carbon black and speciality compounds facility in Tianjin, China. Cabot will run the plant and intends to continue to supply current customers while conducting technology upgrades. The transaction is expected to close in the second quarter of 2022.

According to Cabot, the acquisition has been driven by electric vehicle demand growth since conductive carbon black additives play a key role in battery chemistry to increase the range and cycle life of lithium-ion batteries. The site currently can produce up to 50,000 metric tons of carbon black annually and Cabot plans to invest to upgrade the capabilities to produce battery grades.

“The acquisition of Tokai Carbon (Tianjin) is a natural extension for us as it aligns with our strategy to strengthen our global leadership positions while pursuing advantaged growth opportunities in high-growth, high-performance markets such as battery materials,” said Cabot President and Chief Executive Officer Sean Keohane. “With this acquisition, we will be better positioned to deliver solutions to meet the rapidly increasing demands for lithium-ion batteries and will do so by operating responsibly and investing in advanced environmental controls to reduce our impact.”

President and CEO of Tokai Carbon Co., Ltd., Hajime Nagasaka, said, “We are very pleased to transfer the business to Cabot and wish the employees great success with the new owner.”

Tokai: competition and regulation forced sale

For its part, Tokai Carbon confirmed that 100 per cent of Tokai Carbon (Tianjin) Co., Ltd. shares are being transferred to Cabot (China) Limited, a subsidiary of Cabot Corporation. Tokai put the sale down to increased competition and regulation. When the new owner Cabot opened its neighbouring Tianjin carbon black factory in 2006 it was the largest of its kind in the world.

As well as Cabot’s future plans for electric vehicle battery material supply, the news also impacts tyremakers since Tokai Carbon (Tianjin) has been “satisfying the demands of tyre and industrial rubber parts manufacturers by providing high-end carbon black” during the years before the sale. However, Tokai describes the surrounding “business environment” as “increasingly severe year by year such as the intensifying market competition and strict environmental regulations governing the operations.”

Tokai Carbon (Tianjin) was established as a joint venture in Tianjin Economic-Technological Development Area in 2004 responding to the growing demand for carbon black in China. In 2013, Tokai Carbon acquired all of the shares owned by the joint venture partner making Tokai Carbon (Tianjin) a wholly-owned subsidiary.