"The investment is an important part of our strategy to expand our position as a global partner for the automotive supplier industry," Evonik CEO Klaus Engel said.
"With the construction of the plant in the Southeastern U.S. and the planned acquisition of the silica business of Huber, we are strengthening our Resource Efficiency growth segment and are extending our leading market position as a silica provider."
The plant predominately will supply the tire industry. Evonik said the industry needs high-quality precipitated silica for producing fuel-efficient tires with good wet grip properties, which can save up to 8 percent fuel in comparison to conventional car tires.
In North America, the demand for tires with reduced rolling resistance and the associated higher fuel efficiency is experiencing above-average growth.
The Southeast U.S. has seen a wealth of tire growth as Goodyear, Michelin, Bridgestone Corp., Continental A.G., Pirelli Tyre S.p.A., Toyo Tire & Rubber Co. Ltd. and Yokohama Rubber Co. Ltd. all operate tire manufacturing plants in the region.
Michelin, Bridgestone and Continental all have manufacturing in South Carolina with Giti Tire Group preparing to open a site in the state, too. Sweden's Trelleborg A.B. opened a specialty agriculture tire plant in Spartanburg, S.C., last year.
Hankook Tire Co. Ltd. has a plant near Clarksburg, Tenn., nearly ready to open, Continental recently disclosed plans construct a $1.4 billion truck/bus tire plant in Mississippi, and China's Qingdao Sentury Tire Co. Ltd. has committed $530 million for a plant in Georgia.
"The proximity to the key customers in the tire industry was decisive in choosing South Carolina. We want to provide global tire manufacturers with the supply security and flexibility they expect from us in local production. That's why we invest in sites that are close to our customers," Johannes Ohmer, member of the Board of Management of Evonik's Resource Efficiency segment, said in a statement.
Headquartered in Essen, Evonik has operations in more than 100 countries with 33,500 employees. The specialty chemicals producer generated sales of about $14.9 billion in 2015.
The firm operates a colloidal silica plant in Portland, Ore., and it produces fumed silica in Waterford, N.J., and Mobile, Ala. It also is constructing a silica production facility in Brazil that is expected to be complete by the end of 2017.
This report first appeared on the website of Rubber & Plastics News, an Akron-based sister publication of Tire Business.