Cabot Corp to Expand Fumed Silica Production in China

Cabot Corporation (NYSE: CBT) and China National Bluestar (Group) Co. Ltd. announced today that Cabot (China) Ltd., a subsidiary of Cabot Corporation, and Bluestar New Chemical Materials Co. Ltd have signed an agreement to significantly expand the fumed silica capacity at the companies' joint venture plant in Jiangxi Province, China.

The Jiangxi site will have the near-term potential to produce up to 20,000 metric tons of fumed silica and will manufacture a wide range of products for multiple applications. The expansion will in its first stage increase the Jiangxi fumed silica capacity from 5,000 metric tons per year to more than 15,000 metric tons by the end of calendar year 2011. Commissioning will be staged, with incremental capacities coming on stream during 2010.

During the ceremony, Patrick Prevost, Cabot's President and CEO said, "Cabot is pleased with the opportunity to strengthen its global fumed silica franchise. This expansion will extend our ability to be a long-term, reliable source of high quality material for Bluestar and our global customer base. The Bluestar Group has been a valued partner of Cabot in China since 2004 and this investment will reinforce our long-term relationship."

The project will produce fumed silica using Cabot's world-class manufacturing technology and utilizing the methyltrichlorosilane byproduct from Bluestar's silicones monomer production. Bluestar's Xinhuo plant will then recycle the hydrogen chloride byproduct from the production of fumed silica as the raw material in the manufacturing of methyl chloride for their silicones monomer production.

Ren Jianxin, Bluestar founder and President of its parent company ChemChina said, "This expansion will stimulate Bluestar's silicone monomer business. This is an indispensable part of Bluestar's expansion of silicones monomer production and downstream silicones compounding at the Xinhuo Chemical Plant. More importantly, the expansion allows for optimization of resources through recycling of a byproduct stream, demonstrating our continued commitment to resource conservation and environmental protection."

This expansion will be in lieu of a previously announced facility in Tianjin, China.

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