Foreign-invested enterprise closes another Chinese factory
Continental Carbon, a carbon black subsidiary of the global carbon black manufacturing giant China Rubber Group, has decided to close its Anshan carbon black plant in China.
01 Carbon black giant closes Chinese plant
Although the carbon black giant Continental Carbon had previously stated that it would "gradually expand" its production capacity in North America and Europe, no one would have thought that it would be completed in the form of "capacity replacement" at the time.
On March 11, 2025, China Rubber Group announced plans to close its manufacturing base in Anshan, Northeast China, to reorganize its global production capacity.
Prior to this, China Rubber Group also announced the sale of its carbon black plant in Chongqing to Longxing Chemical. China Rubber Group said that the main reason for reducing production capacity in China is that the supply competition in China's carbon black industry is too fierce. It is true that China's tire production capacity is increasing day by day, but the competition in its upstream supporting industries is even more intense-China's carbon black market has long been in oversupply.
According to data from some institutions, due to the increase in suppliers and the expansion of factory capacity, the capacity utilization rate of China's carbon black factories will be only 58% from 2019 to 2023. From 2019 to 2023, China's rubber tire production increased from 842 million to 988 million, but the 17% increase in production still did not catch up with the increase in carbon black supply.
Generally speaking, capacity utilization must reach 70% to ensure profitability, and the 58% operating rate of China's carbon black factories means something.
Many institutions pointed out that in recent years, China's carbon black market has been characterized by overcapacity and intensified competition. In addition, Russia has also increased its carbon black exports to China, and there is too much carbon black in the Chinese tire market.
In the Chinese market, an inevitable result of intensified competition is undoubtedly price involution - the carbon black subsidiary of the International China Rubber Group pointed out that low-priced carbon black is now flooding the Chinese market, and the lower market price has brought a huge impact on the sales of its group's carbon black business.
Under the plummeting sales, the Anshan plant of the International China Rubber Group has lost an average of 92 million yuan per year in the past five years. Of course, in addition to the decline in profits caused by the sales impact, the inefficient operation model of the Anshan plant is also a stumbling block to its profitability. But just like the dilemma that Sumitomo Rubber's US factory is in - if you want to increase production capacity, you have to upgrade equipment, but this requires a lot of capital investment to meet new environmental and technical standards.
After weighing the sales expectations after the upgrade, the future competitive environment and its own long-term competitiveness, the International China Rubber Group finally chose to close the Anshan factory and reorganize its production capacity globally. In addition, the International China Rubber Group has also finalized the sale of its Chongqing factory.
02 The Chongqing factory of the International China Rubber Group has been renamed
On March 11, 2025, Longxing Chemical purchased the Chongqing factory of the International China Rubber Group for 86.87 million yuan. Longxing Chemical said that this acquisition helped it increase the market supply in the southwest region. It helps it to cover the carbon black demand of tire companies such as Hankook Tire, Double Coin Tire, Cheng Shin Rubber, and Sichuan Haida in the southwest region.
For the International China Rubber Group, this acquisition is conducive to the return of funds for capacity restructuring; for Longxing Chemical, it is in line with its strategic development plan, which is conducive to integrating industry resources and enhancing market competitiveness.
In 2024, Longxing Chemical is in full production, and its capacity utilization and production and sales rates have been at a high level for a long time. The financial report shows that in 2024, Longxing Chemical's sales reached 4.355 billion yuan, a year-on-year increase of 1.95%; net profit reached 142 million yuan, a year-on-year increase of 28.7%. Such growth is remarkable in the carbon black industry in 2024.
03 Funds return, global restructuring
In addition to adjusting China's production capacity, International China Rubber Group also plans to adjust its global production capacity. The group plans to gradually expand its production capacity in North America, such as expanding the production capacity of two plants in Texas and Oklahoma. At the same time, in order to increase the supply of high-end carbon black to Europe, International China Rubber is also building a plant in Iskenderun, Turkey.
In addition, International China Rubber Group also plans to accelerate product transformation and pay more attention to the research and development and supply of high-value specialty carbon black applications and environmentally friendly carbon black products. However, whether it is capacity adjustment or product transformation, International China Rubber has only one purpose-to keep pace with changes in market demand, so as to be able to respond to demand more flexibly.
As the world's No. 1 carbon black producer, the carbon black products produced by Continental Carbon, a subsidiary of China Rubber Group, are widely used in the global market demand for rubber, plastics, coatings, inks, etc. In terms of environmental protection and sustainable development, China Rubber Group has been committed to reducing energy consumption and environmental pollution to enhance the company's sense of social responsibility.
