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Cabot spending $100M on Indonesian carbon black expansion

The Jakarta Post reports that PT Cabot Indonesia plans to invest US$100 million in Indonesia this year to expand production capacity at its carbon black plant in Krakatau Industrial Estate Cilegon, Banten, Indonesia. The project will increase capacity by 140,000 tons to 290,000 tons and is expected to be completed in mid 2014, based on comments from PT Cabot Indonesia director Gerry Howan on Tuesday in Jakarta. At present, Cabot operates two plants in Indonesia — one in Cilegon and another in Sumuranja, Merak, Banten. Cabot is the only carbon black producer in Indonesia.

“Our current installed capacity is only 150,000 tons, while existing demand is 230,000 tons. For this reason, we want to expand,” Mr. Howan told reporters after meeting Industry Minister MS Hidayat at the ministry.

The firm would allocate its entire output for the domestic market, which would see demand rising to 300,000 tons in the next three years due to the fast-growing automotive industry, Mr. Howan added.

In addition to the capacity expansion, the firm aimed to locally source its feedstock. “We are currently using imported decant oil. But by 2013, we will obtain it from KS [state-owned steel producer Krakatau Steel],” he explained.

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