Can you give us an overview of what's been happening at Cabot and some of the key highlights from the past year?
In 2023, despite challenges in the chemical and industrial sectors, Cabot recorded its second-highest year of earnings, a testament to our resilience and strategic planning. This success came amidst a backdrop of significant de-stocking across the sector, driven by the high demand during the COVID-19 pandemic years, which led to an over-build of inventory. However, we managed to navigate these challenges effectively, even as we faced geopolitical tensions, supply chain disruptions, and inflationary pressures. Our achievements include notable sustainability advancements and the launch of our EVOLVE® Sustainable Solutions technology platform, aimed at developing more sustainable, bio-based, and circular materials. Additionally, we've made significant strides in the battery materials sector, opening a new battery technology center in Europe and launching our new ENTERA® aerogel thermal insulation additive designed to help protect lithium-ion batteries from thermal runway – both of which help to support the growing demand for lithium-ion batteries essential for electric vehicles. We also achieved International Sustainability and Carbon Certification (ISCC) PLUS certification at seven sites across our network, making Cabot the leading carbon black producer with the highest number of ISCC PLUS certified sites globally. ISCC is a globally applicable certification system that covers entire supply chains and a variety of biobased feedstocks and renewables to ensure compliance with ecological and social requirements, GHG emissions savings and traceability and provides our customers the necessary third-party verification to ensure the integrity and performance of our global supply chain.
What strengths and challenges does Cabot face with its global presence, particularly with operations in Europe, the US, and China?
A key element in our success is our unique ability to identify key points of global economic development and grasp opportunities as they arise. Whether it was the European Renaissance after World War II, the rise of Japan in the 1960s, or the opening and reform of China and the Southeast Asia market during the past forty years, we have been able to seize the opportunity and move into a leading position in these markets. Cabot's global strategy leverages our pioneering heritage and a business model that emphasizes local production and leadership to meet regional demands effectively. With 80% of our sales generated outside the US, our approach contrasts sharply with the average US company, demonstrating our extensive global footprint and commitment to innovation and customer service across diverse markets. This model has allowed us to respond swiftly to local customer needs and innovate rapidly by working closely with them. However, the current geopolitical climate poses challenges, prompting a shift towards regionalization and control over supply chains. Despite these hurdles, we remain adaptable, acknowledging the intertwined nature of global value chains and the importance of maintaining robust trade and competition, especially outside strategic sectors defined by geopolitical interests.
What do you think is the greatest challenge for the chemical industry in reaching its sustainability goals?
The chemical industry faces a significant perception and reputational challenge, which impacts our progress towards sustainability goals. There's a common misconception that the chemical sector is unsafe, despite our recordable injury rates being much lower than the industrial sector average. Overcoming this perception is crucial, as the sustainability challenges we face cannot be solved without innovative chemistry. The industry plays a pivotal role in addressing major sources of greenhouse gas emissions, such as mobility, power generation, and building efficiency, which are deeply intertwined with chemistry. Therefore, fostering a collaborative dialogue among industries, the public, and governments is vital for making strides in sustainability. Additionally, the fragmentation in regulation and sustainability assessment creates inefficiencies that hinder progress. Streamlining these processes could greatly enhance our ability to move forward collectively.
Why do you think Cabot is a trailblazer in technology innovation and sustainability within the industry?
Cabot's long heritage of innovation positions us as a trailblazer in the chemical industry, an industry inherently tied to almost every aspect of our lives due to its role as a provider of building blocks. Our history of developing new, high-performance materials, such as in the Chemical Mechanical Planarization industry and inkjet printing technology, exemplifies our commitment to innovation.
In addition, we are committed to bringing the power of innovative chemistry to our customers to help solve many of the sustainability challenges facing our world. More recently, our focus on battery materials to enhance the performance and efficiency of lithium-ion batteries reflects our dedication to supporting sustainable advancements.
The launch of our EVOLVE® Sustainable Solutions technology platform is a testament to our commitment to sustainability, focusing on developing materials from recovered sources, renewable feedstocks, and reducing our products' greenhouse gas footprints. These initiatives, driven by customer demand for more sustainable solutions, underscore our leadership and innovative spirit in tackling the challenges of sustainability.
What can we expect from Cabot in 2024?
In 2024, you can expect continued innovation and leadership from Cabot, building on our 140-year legacy of pioneering advancements and innovative solutions across various sectors. Our focus remains on driving forward with our commitment to sustainability and technological innovation, addressing the pressing needs of our customers and the broader industry challenges.
