Cabot to acquire Tokai Carbon’s Chinese plant for US$9 mn

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US carbon black supplier Cabot Corporation says it has entered a definitive agreement to acquire Tokai Carbon (Tianjin) Co. from Tokai Carbon Group for US$9 million, subject to customary closing adjustments. The carbon black manufacturing facility was commissioned in 2006 and is located in close proximity to Cabot’s current carbon black and specialty compounds facility in Tianjin, China. The acquisition is expected to support the growth of Cabot’s Battery Materials product line, while continuing to serve existing carbon black customers.

The growth of electric vehicles has led to rapid development in lithium-ion batteries. 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 tonnes/year of carbon black 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/CEO of Tokai Carbon Co, Hajime Nagasaka, said, “We are very pleased to transfer the business to Cabot and wish the employees great success with the new owner.”

Cabot will run the plant and intends to continue to supply current customers while conducting technology upgrades. The upgrades to manufacturing and environmental equipment will enable the site to manufacture conductive carbon black for battery materials as well as other carbon black products while meeting environmental standards.

The parties expect to close the transaction in the second fiscal quarter of 2022.

Founded in 1918 and headquartered in Tokyo, Japan, Tokai Carbon has for over 100 years been the market leader in a broad range of high-quality carbon and graphite products servicing numerous global customers in wide range of industries such as steel, aluminium, autos, semiconductors, and electronic components. Tokai Carbon maintains a global network of over 40 business locations across 10 countries in Asia, Europe and North America. It posted consolidated sales of JPY 202 billion and total assets of JPY 460 billion in the fiscal year ending December 31, 2020. Tokai Carbon is listed on the Tokyo Stock Exchange.