Cabot Corporation (Cabot) is a global specialty chemicals and performance materials company.
The company’s principal products are reinforcing and specialty carbons, specialty compounds, conductive additives, carbon nanotubes, fumed metal oxides, inkjet colorants and aerogel. Cabot and its affiliates have manufacturing facilities and operations in the United States (‘U.S.’) and over 20 other countries.
Segments
The company’s business is organized into two reportable segments: Reinforcement Mat...
Cabot Corporation (Cabot) is a global specialty chemicals and performance materials company.
The company’s principal products are reinforcing and specialty carbons, specialty compounds, conductive additives, carbon nanotubes, fumed metal oxides, inkjet colorants and aerogel. Cabot and its affiliates have manufacturing facilities and operations in the United States (‘U.S.’) and over 20 other countries.
Segments
The company’s business is organized into two reportable segments: Reinforcement Materials and Performance Chemicals.
Reinforcement Materials
Products
Carbon black is a form of elemental carbon that is manufactured from by-product feedstock streams in a highly controlled process to produce particles and aggregates of varied size, structure and surface chemistry, resulting in many different performance characteristics for a wide variety of applications. Reinforcing carbons (a class of carbon blacks manufactured by Cabot) are used to enhance the physical properties of the systems and applications in which they are incorporated.
The company’s reinforcing carbons products are used in tires and industrial products. Reinforcing carbons have traditionally been used in the tire industry as a rubber reinforcing agent to increase tread durability and are also used as a performance additive to reduce rolling resistance and improve traction. In industrial products, such as hoses, belts, extruded profiles and molded goods, reinforcing carbons are used to improve the physical performance of the product, including the product’s physical strength, fluid resistance, conductivity and resistivity.
In addition to the company’s reinforcing carbons, the company manufactures engineered elastomer composites (‘E2C’) solutions that are composites of reinforcing carbons and rubber made using the company’s patented elastomer composites manufacturing process. These composites improve abrasion/wear resistance, reduce fatigue of rubber parts and reduce rolling resistance compared to reinforcing carbons/rubber compounds made entirely by conventional rubber mix methods enabling rubber product manufacturers to reduce the need to make performance trade-offs. The use of E2Csolutions enables the company’s customers to produce better performing tires, including giant off-the-road tires and on-road commercial tires, as well as other rubber products used in high-wear applications, such as mining. Additionally, because E2Csolutions can be integrated into current product methods without additional significant capital investment, and require fewer mixing stages, lower mixing temperatures and shorter mixing cycles than conventional products, operating and production costs may be reduced. E2C is one of the company’s focus areas for growth.
In fiscal 2023, the company launched a new technology platform, EVOLVE Sustainable Solutions. The company’s ambition under this platform is to work with customers and technology partners to develop products with reliable performance and produced at industrial scale across three sustainability categories: Renewable, Recovered and Reduced, meaning products made with renewable materials or materials recovered from end-of-life tires and/or using processes that result in reduced greenhouse gas emissions.
Drivers of Demand and Sales and Customers
Demand for the company’s Reinforcement Materials products is largely driven by the growth and development of the tire and automotive industries. In addition to general global economic conditions, demand for reinforcing carbons in tires is mainly influenced by the number of replacement and original equipment tires produced, which in turn is driven by (i) vehicle and driving trends, including the number of miles driven, and the number of vehicles produced and registered, (ii) changes in supply chain inventory levels to adapt to end-market demand, (iii) demand for high-performance tires, (iv) demand for larger tires and larger vehicles, such as trucks, buses, off-road vehicles used in agriculture, mining and similar vehicles, (v) demand for electric and hybrid vehicles, (vi) consumer and industrial spending on new vehicles and (vii) changes in regulatory requirements impacting vehicle fuel efficiency and tire regulations. Demand for reinforcing carbons for industrial products is mainly influenced by vehicle production and design trends, construction activity and general industrial production.
Demand in the developed Western European, Japanese, and North American regions is mainly driven by demographic changes, customers’ high-quality requirements, stringent tire regulation standards, changes in consumer preference (e.g., different tire sizes, model and powertrain types), and relatively stable tire replacement demand. Demand in developing markets, such as China, Southeastern Asia, South America and Eastern Europe, has been mainly driven by the growing middle class, rapid industrialization, infrastructure spending and car ownership trends and demand for products exported from these regions to the Western markets. The growth in vehicle production, and in exports, in turn drives demand for both original equipment tires and replacement tires in developing regions.
Sales of reinforcing carbons and E2Csolutions are made primarily by Cabot employees and secondarily through distributors and sales representatives. The company typically ‘make and sell’ in region, which, among other advantages, provides the company’s customers a regional supply chain and typically reduces transportation costs. Sales to five major tire customers represent a material portion of Reinforcement Materials’ total net sales and operating revenues. The loss of any of these customers, or a significant reduction in volumes sold to them, could have a material adverse effect on the segment until such business is replaced.
Under appropriate circumstances, the company has entered into supply arrangements with certain customers, the typical duration of which is one year. These arrangements typically provide for sales price adjustments to account for changes in relevant feedstock costs including natural gas and, in many cases, changes in other relevant costs (such as the cost of CO2 credits in Europe, vendor financing and product delivery). In fiscal 2024, approximately two-thirds of the company’s reinforcing carbons volume was sold under these supply arrangements. The majority of the volumes sold under these arrangements are sold to customers in the Americas and Europe.
Much of the reinforcing carbons the company sells is used in tires and automotive products and, therefore, the company’s financial results may be affected by the cyclical nature of the automotive industry. However, the majority of the market for the company’s products is in replacement tires that historically has been less cyclical as demand for replacement tires is correlated to miles driven.
Operations
The company owns, or has a controlling interest in, and operates plants that produce reinforcing carbons in Argentina, Brazil, Canada, China, Colombia, the Czech Republic, France, Indonesia, Italy, Japan, Mexico, the Netherlands and the U.S. An equity affiliate operates a reinforcing carbons plant in Venezuela. In addition, the company has a 98% ownership interest in an entity that manufactures the company’s E2C products in Port Dickson, Malaysia.
In 2024, the company began an expansion project at the company’s Cilegon, Indonesia plant to add approximately 80,000 metric tons of capacity for reinforcing carbons which the company anticipates becoming available in fiscal 2025.
In addition to carbon black, the company’s manufacturing processes produce usable energy in the form of tailgas, as a by-product. Nine of the company’s reinforcing carbons manufacturing sites and four reinforcing carbons/specialty carbons manufacturing sites have energy centers, and the company is installing an energy center at its reinforcing carbons plant in Ville Platte, Louisiana. These energy centers allow the company to utilize the tailgas through some form of energy co-generation, such as steam or electricity.
Performance Chemicals
In Performance Chemicals, the company designs, manufactures and sells materials that deliver performance in a broad range of customer applications across the automotive, construction, infrastructure, inkjet printing, electronics, and consumer products sectors and in applications related to the generation, transmission and storage of energy. In this reporting segment the company combines its specialty carbons, specialty compounds, battery materials, fumed metal oxides, aerogel and inkjet product lines. The company’s focus areas for growth include conductive additives and other materials for battery applications, and inkjet dispersions for post print corrugated packaging applications. The recent investments the company has made for growth in this segment, including in respect of these specific areas of focus, are described below under the heading ‘Operations’.
Products
Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and aggregates of varied structure and surface chemistry, resulting in many different performance characteristics for a wide variety of applications.
The company’s specialty carbons are used to impart color, provide rheology control, enhance conductivity and static charge control, provide UV protection, enhance mechanical properties, and provide formulation flexibility through surface treatment. These specialty carbon products are used in a wide variety of applications, such as plastics, which applications represent the largest use for the company’s products, inks, coatings, adhesives, toners, batteries, and displays.
The company’s masterbatch and conductive compound products, which the company refers to as ‘specialty compounds’, are formulations derived from specialty carbons mixed with polymers and other additives. These products are generally used by plastic resin producers and converters in applications for the automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries. As an alternative to directly mixing specialty carbon blacks, these formulations offer greater ease of handling and help customers achieve their desired levels of dispersion and color and manage the addition of small doses of additives. In addition, the company’s electrically conductive compound products generally are used to help ensure uniform conductive performance and reduce risks associated with electrostatic discharge in plastics applications.
The company’s battery materials products include the company’s conductive additives and fumed alumina, which are used principally in advanced lead acid and lithium-ion batteries used in electric vehicles. The company’s conductive additives consist of conductive carbons, carbon nanotubes and carbon nano structures, and blends of these materials, each of which offers different levels of conductivity and formulation flexibility for battery manufacturers to address performance (energy density, fast charging), cost and safety. In lithium-ion batteries, the company’s conductive additives are used in both cathode and anode applications to increase energy density by providing a conductive network between active materials. Fumed alumina is used to reduce cathode material and electrolyte decomposition and improve capacity retention leading to longer battery cycle life.
Fumed silica is an ultra-fine, high-purity particle used as a reinforcing, thickening, abrasive, thixotropic, suspending or anti-caking agent in a wide variety of products for the automotive, construction, microelectronics, batteries and consumer products industries. These products include adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries and pharmaceuticals. In addition to its battery applications discussed above, fumed alumina, also an ultra-fine, high-purity particle, is used as an abrasive, absorbent or barrier agent in a variety of products, such as inkjet media, lighting, coatings, cosmetics and polishing slurries.
Aerogel is a hydrophobic, silica-based particle with a high surface area that is used in a variety of thermal insulation and specialty chemical applications. In the building and construction industry, the product is used in insulative sprayable plasters and composite building products, as well as translucent skylight, window, wall and roof systems for insulating eco-daylighting applications. In the specialty chemicals industry, the product is used to provide matte finishing, insulating and thickening properties for use in a variety of applications including thermal runaway management for lithium-ion batteries.
The company’s inkjet colorants are high-quality pigment-based black and color dispersions and inks. The company’s dispersions are based on its patented pigment surface modification technology and polymer encapsulation technology. The dispersions are used in aqueous inkjet inks to impart color, sharp print characteristics and durability, while maintaining high printhead reliability. These products are used in various inkjet printing applications, including traditional work-from-home and corporate office settings, and, increasingly, in commercial and corrugated packaging, all of which require a high level of dispersibility and colloidal stability. The company’s inkjet inks, which utilize its pigment-based colorant dispersions, are used in the commercial printing segment for graphic arts.
Drivers of Demand and Sales and Customers
The company’s specialty carbons products have a wide variety of end-uses and demand is largely driven by the growth and development of the construction and infrastructure, automotive, electronics and consumer products industries. Demand for the company’s conductive additives for use in batteries is largely driven by the trend in electrification of vehicles. Demand for fumed silica is mainly influenced by trends in key markets for silicones, adhesives and coatings applications, notably, structural adhesives for automobile light-weighting, epoxy bonding paste for wind turbines, high-performance coatings and hybrid sealants for construction and silicones for medical devices and the proliferation of electronics. Demand for specialty compounds is mainly influenced by growth and development of the automotive, infrastructure, consumer goods and electronic devices, packaging and agriculture industries.
Demand for the company’s inkjet colorants is mainly influenced by developments in print media, pages printed in office and work-from-home environments, as well as press sales and utilization levels as digital aqueous pigment-based inks penetrate commercial and packaging applications historically served by analog printing methods.
Sales of these products are made by Cabot employees and through distributors and sales representatives. In the company’s specialty carbons and specialty compounds product lines, sales are generally to a broad number of customers. In the company’s fumed metal oxides product line, sales under contracts with five customers account for approximately one-third of the revenue. In the company’s battery materials product line, sales to three customers account for approximately 50% of revenue.
Operations
The company owns, or has a controlling interest in, and operates plants that produce specialty carbons primarily in China, the Netherlands and the U.S. The company produces its conductive additives in China, and at the company’s specialty carbon plants in the U.S. and in the Netherlands. The company also owns, or has a controlling interest in, manufacturing plants that produce fumed metal oxides in China, Germany, the United Kingdom (‘U.K.’), and the U.S.; and a manufacturing plant that produces aerogel in Frankfurt, Germany, which is idled. An equity affiliate operates a fumed metal oxides plant in India. The company’s specialty compounds are predominately produced in facilities that the company owns, or has a controlling interest in, located in Belgium, Canada, China and the United Arab Emirates. The company’s inkjet colorants and inks are manufactured at the company’s facility in the U.S.
Four of the company’s reinforcing carbons/specialty carbons manufacturing sites have energy centers.
Global Operations
Both of the company’s segments operate globally, and a significant portion of the company’s revenues and operating profits is derived from operations outside the U.S.
The company’s business model in China is predominantly to make and sell product in-country to established local and multi-national customers with operations in China. In fiscal 2024, sales in China across the company’s segments constituted approximately 25% of its revenues, and the company’s property, plant and equipment located in China constituted approximately 25% of the company’s total property, plant and equipment as of September 30, 2024.
Research and Development
In the year ended September 30, 2024 (fiscal 2024), the company spent approximately $63 million on technology development.
Safety, Health, Environment and Sustainability
The company's products are subject to the chemical control laws and regulatory requirements of the countries in which they are manufactured or imported and distributed commercially. These laws include the regulation of chemical substances and inventories under the Toxic Substances Control Act (TSCA) in the U.S.; and the Registration, Evaluation and Authorization of Chemicals (REACh) in the European Union.
The company has been named as a potentially responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (the 'Superfund law') and comparable state statutes with respect to several sites primarily associated with its divested businesses. In Europe, the company's four carbon black facilities are subject to the EU Emissions Trading Scheme.
History
Cabot Corporation was founded in 1882. The company was incorporated in the state of Delaware in 1960.
