A joint venture (JV) agreement has been formed and signed by Cabot Corporation and Inner Mongolia Hengyecheng Silicone Co., Ltd (HYC) for the building of a fumed silica manufacturing plant in Wuhai, China.
Cabot will own 80% of the shares in the joint venture and HYC will hold the remaining 20%. Approximately US$60 million will be invested by the newly-formed JV into the construction of the world-class facility that will have a manufacturing capacity of 8,000 metric tonnes of fumed silica per year.
The plant’s construction is expected to begin by early 2017 after the necessary governmental and regulatory approvals have been approved. The facility is expected to be completed by 2019.
The joint venture project will give Cabot the opportunity to meet the growing demand for its high-quality, high-performance fumed silica, enabled by a long-term reliable source of feedstock.
“We are a market leader for fumed silica, and this investment will further strengthen our position in this core market,” said Sean Keohane, president and chief executive officer, Cabot Corporation. “Cabot has achieved tremendous success over the years in China, and we continue to see great opportunities to innovate and support our customers while being a model for sustainable production in China. We are partnered with a leader in HYC, and through this partnership we will establish a world-class fumed silica production site in China.”
“Through this planned investment, we will be able to further strengthen our market leadership position for fumed silica and promote growth in a variety of industries in China,” said Nick Cross, executive vice president and president, Performance Chemicals segment. “This joint venture will provide a catalyst for growth in China and we look forward to serving local customers with high-quality products and solutions while capturing growth in the rapidly growing sectors of automotive, construction, renewable energy and other industries.”
“We are pleased to partner with an industry leader and innovator such as Cabot to build this state-of-the-art fumed silica plant,” said Wang Yongquan, Chairman of Zhejiang Zhongcheng Holding Group Co., Ltd, parent company of HYC. “Not only will we have access to Cabot’s silica for use in our silicone compounding operation, but we also will be able expand production efficiencies through the utilization of a closed loop system.”
Cabot has had operations in China for almost 30 years, and currently operates four manufacturing sites in Shanghai, Xingtai, Jiangxi and Tianjin. The new plant in Wuhai will become Cabot’s seventh fumed silica plant throughout its network in Asia, Europe and the US.