Cabot Corporation, a chemical firm listed on the New York Stock Exchange, plans to build a carbon black manufacturing facility in the Jebel Ali Free Zone in Dubai, according to company officials.
The initial production capacity of the plant will be 25,000 tonnes per year with a planned future expansion capacity of 75,000 tonnes.
Cabot already has manufacturing plants in 24 countries and reported a sales turnover of $26 billion (Dh95.4bn) in 2007.
Sean Keohane, Vice-President and General Manager for the Performance Segment, said the company has already obtained the land for the factory and construction will start later this year, with production scheduled to start in the third quarter of 2009.
According to Cabot sources, the company is increasingly shifting its manufacturing operations to low-cost regions. It recently closed down several facilities in the United States, Australia and Europe while expanding operation at its site in Tianjin, China.
Starting operations in Dubai seems to be in line with this policy.
The Dubai plant will allow Cabot to meet the increasing demand in the Middle East, Europe, and Asia Pacific regions.
In recent years, the Middle East has become a major producer of polyolefins and downstream compounds and by 2010 is expected to produce one-fifth of the world's polyethylene (PE) and polypropylene (PP).
The Jebel Ali plant will also be close to petroleum feedstock, a by-product of the oil and gas industry, which is a major raw material for the chemical plant.
Keohane said: "Within the Middle East there is already strong demand for PE and PP compounds for use in building infrastructure for water supply, electricity, and telecommunications projects. These are key markets for us. This new site will offer significant quality and service advantages."
Carbon black is a major raw material used in tyre production.