Orion Engineered Carbons, a global leader in carbon black production, has announced a major strategic

[Frankfurt, Germany – July 2025] — Orion Engineered Carbons, a global leader in carbon black production, has announced a major strategic move to shut down 3 to 5 carbon black production lines worldwide by the end of 2025. These closures will affect multiple facilities across the Americas, Europe, the Middle East, and Africa, signaling a significant restructuring of the company’s global operations.

Background: Mounting Cost Pressures and Intensified Market Competition

According to Orion, the decision aims to streamline capital expenditures by focusing on "more reliable, higher-yield, and more efficient" production lines. The company acknowledges that its tire-grade carbon black segment has experienced persistent weakness in recent quarters, with no clear timeline for market recovery.

The European market, in particular, has been under intense pressure. Local manufacturers face rising energy and labor costs, while also contending with price competition from imports—especially from countries like India—whose producers are not subject to EU carbon emission regulations. This regulatory gap places European manufacturers at a distinct cost disadvantage.

Restructuring: Workforce Reduction and Cost Optimization

Orion's global streamlining efforts began as early as Q4 2024, with the company reducing its non-plant workforce by approximately 6%. This initiative is expected to save around USD 6 million in 2025. These proactive measures reflect Orion's commitment to improving capital efficiency and operational flexibility amid an uncertain economic environment.

Official Statement: Long-Term Focus and Competitive Strengthening

In an official statement, Orion’s management emphasized:

"We are taking decisive steps to enhance the sustainability and profitability of our production system. This will not only help us manage near-term pressures but also position us for long-term growth."

The company further noted that it will continue investing in technologically advanced, energy-efficient, and low-emission production lines, while expanding into high-value segments such as specialty carbon black to hedge against volatility in the traditional tire market.

Industry Insight: Carbon Black Sector Accelerates Transformation

Orion’s restructuring move reflects a broader industry trend toward transformation. As environmental regulations tighten, global trade dynamics shift, and downstream tire manufacturers demand higher quality and supply stability, carbon black producers are being pushed to consolidate and upgrade.

Industry analysts believe that the future of carbon black competition will shift from scale to quality and sustainable manufacturing. Orion’s strategic downsizing of low-efficiency capacity and focus on lean operations may serve as a reference for other players in the sector.