RAG subsidiary Degussa bets on carbon black in the growth market of Brazil - Capacity expansion of the carbon black facility in Paulinia strengthens top global position

Degussa GmbH has doubled its production plant capacity for carbon black in Paulinia, Brazil, to 100,000 tons per year. With the expansion of capacity in Paulinia, Degussa is augmenting its position as the world’s second largest manufacturer of carbon black with approximately 1.4 million tons per year.

“Carbon black is one of the strategic growth areas that we are systematically expanding. This capacity enhancement allows us to serve the demand of our customers in the tire and technical rubber-products industry even better. We are very optimistic overall regarding future growth in the rubber industry. We are highly equipped to meet this demand with our modern plant in Paulina,” commented Dr. Klaus Engel, Chairman of the Board of Degussa GmbH at the opening of the plant. “We have invested a total of €65 million ($85 million) in Brazil.”

Brazil is a core market for the Advanced Fillers & Pigments Business Unit, which is responsible within Degussa for global business with rubber additives and carbon black pigments. In the Brazilian market, around 90% of the demand for carbon black comes from the tire and technical rubber articles industry, and 10% is used as pigment in plastics, dyes, enamels and print inks. “South America is particularly interesting for the Business Unit as a growth region. The automotive industry and particularly the tire industry are growing continuously there, also because export volumes are growing. Many tire manufacturers even export most of their production, particularly to the North American market. To this extent, we regard this region, along with Asia, as the focus of our investment activities,” added Thomas Hermann, Head of the Advanced Fillers & Pigments Business Unit. Around 55 million tires and 2.6 million vehicles were produced in Brazil in 2006, a third of each destined for export.

With 3,300 employees and an annual revenue of around €1.24 billion ($1.6 billion), the Advance Fillers & Pigments Business Unit is one of the most important strategic business areas of Degussa GmbH. The Business Unit is present globally in 30 production locations in 18 countries on five continents. Degussa is the only one-stop-shop supplier of the important product lines of carbon black, rubber silicas and rubber silanes. This makes the Advanced Fillers & Pigments Business Unit one of the highest performing system providers for the rubber-processing industry. The Business Unit’s entire product range also offers tailor-made solutions to manufacturers of dyes, enamels, and printing inks, and to the plastics industry.

Degussa has been active in Brazil, the focus of its activities in the Latin American economic area, for over 50 years, and is represented in all its Business Units. The most recent major individual project in Brazil was in 2006 and entailed the expansion of the production facility for hydrogen peroxide bleaching chemicals to 70,000 tons of capacity per year. The plant is located in Barra do Riacho.