Cabot Corporation to Close West Virginia Carbon Black Plant
Cabot Corporation announced that it will close its Carbon Black manufacturing facility in Waverly, West Virginia. It is anticipated that manufacturing operations will cease in March 2008 with customer shipments from the facility continuing through the middle of 2008.
The decision to close the facility was driven by changes in the tire manufacturing industry. Over the past 18 months, tire manufacturing has seen a significant restructuring, with multiple tire capacity reductions in North America and the expansion of tire manufacturing facilities in China and other countries in the Asia Pacific and South America regions. These changes, together with the projected growth of imported tires to the United States, require Cabot to make this North American carbon black capacity adjustment in order to maintain its competitiveness. Cabot is in the process of debottlenecking several of its carbon black manufacturing facilities in North America to continue to fully meet customer requirements.
Cabot expects the closure plan will result in a pre-tax charge to earnings of approximately $22 million over the next two years with approximately $8 million of this amount expected to be recorded during fiscal year 2007. Of the $22 million, the net cash outlays anticipated to be paid over the next two years are approximately $4 million.
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