Orion to Close 3–5 Carbon Black Production Lines by End-2025
Orion S.A. announced plans to discontinue three to five carbon black production lines at multiple sites in the Americas and EMEA by the end of 2025, part of a portfolio rationalization to prioritize higher-performing assets and strengthen free cash flow. Management added that the impacted capacity represents less than 5% of Orion’s global footprint.
HOUSTON - Orion S.A. (NYSE:OEC), a global specialty chemicals company with annual revenue of $1.85 billion, announced Tuesday plans to discontinue production at three to five of its carbon black lines across multiple facilities in the Americas and EMEA regions by the end of 2025. According to the company, it has been facing cash flow challenges, making this restructuring particularly significant.
The company, which supplies carbon black for applications including tires, coatings, and batteries, described the move as part of its strategy to focus maintenance investments on higher-performing production lines.
“This decision is part of Orion’s strategy to focus maintenance investments on higher-performing production lines and to rationalize underperforming assets,” said Orion CEO Corning Painter in a press release statement. The company indicated the action is intended to enhance free cash flow.
Painter cited recently introduced U.S. tariffs and the EU anti-dumping investigation as factors that could help reverse the loss of local tire manufacturing share, though he noted uncertainty about the timing of recovery led to the decision to take action now.
Orion currently operates 15 carbon black production plants worldwide with four innovation centers. The company has not specified which particular facilities will be affected by the production line closures.
Carbon black is a form of carbon produced as powder or pellets used in various applications, including tires, inks, plastics, and batteries, to provide properties such as reinforcement, coloration, and UV protection. With an EBITDA of $268.1 million in the last twelve months, Orion maintains a significant presence in this specialized market.
In other recent news, Orion S.A. has announced an interim dividend of $0.0207 per share for the fourth quarter of 2025, amounting to approximately $1.2 million. This dividend will be distributed on October 8, 2025, to shareholders recorded by July 7, 2025, with a 15% Luxembourg withholding tax applicable, subject to certain exemptions. Previously, Orion S.A. declared a similar interim dividend for the third quarter of 2025, also totaling around $1.2 million, with payment scheduled for July 2, 2025. Shareholders on record by June 11, 2025, will be eligible for this dividend, and the same withholding tax conditions apply.
Additionally, JPMorgan analysts recently downgraded Orion’s stock rating from Overweight to Neutral, adjusting the price target from $18 to $12. This decision reflects concerns over economic uncertainties and their potential effects on valuation. Despite Orion’s projected EBITDA multiples for 2025 and 2026, JPMorgan cited the reduced likelihood of multiple expansion as a factor in the downgrade. The analysts noted Orion’s free cash flow yield is estimated at about 15% for 2026, following a decrease in capital expenditures. Orion’s standing in the carbon black market and its valuation relative to peers like Cabot were also considered in the analysis.
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