Orion S.A. Breaks Ground on Battery Materials Plant in Texas

Rhea-AI Summary

Orion S.A. (NYSE: OEC) breaks ground on a plant in Texas to produce acetylene-based conductive additives for lithium-ion batteries, supporting the global shift to electrification. The facility in La Porte will create high-skilled jobs, reduce carbon footprint, and strengthen the U.S. battery market.

Insights

Market Research Analyst

The groundbreaking of Orion S.A.'s new plant in Texas represents a strategic move within the specialty chemicals and battery additive market, particularly given the current global push towards electrification. This development is significant for investors as it taps into the burgeoning demand for lithium-ion batteries, which are essential for electric vehicles and renewable energy infrastructure.

Orion's position as the sole producer of acetylene-based conductive additives in Europe and its expansion into the U.S. market could potentially strengthen supply chains and reduce dependency on international imports, which have been a concern for the industry. The emphasis on a 'super clean' product with a lower carbon footprint aligns with increasing regulatory and consumer demand for sustainable practices, which could provide Orion with a competitive edge in the market.

Furthermore, the creation of high-skilled jobs indicates a long-term investment in the local economy and the technical sector, which may foster innovation and attract further investment. The collaboration with LyondellBasell for acetylene supply suggests a synergistic partnership that could enhance efficiency and stability in production.

Environmental Analyst

The environmental implications of Orion's new plant are noteworthy, particularly in the context of the global climate agenda. The production of conductive additives with a significantly reduced carbon footprint is a forward-thinking approach that aligns with broader sustainability goals.

By leveraging a production process that results in exceptional purity and reduced carbon emissions, Orion is positioning itself as a leader in sustainable manufacturing within the chemical industry. This move not only addresses the growing demand for environmentally friendly products but also anticipates future regulatory trends that may favor low-carbon technologies and penalize high-emission processes.

The partnership with LyondellBasell for the supply of acetylene further underscores the importance of integrated supply chains in reducing carbon emissions. The proximity of the supply source could minimize transportation-related emissions, contributing to the overall sustainability of the operation.

Energy Sector Analyst

The impact of Orion's new facility extends into the energy sector, particularly in its support of the electrification movement. As electric vehicles and renewable energy solutions like wind and solar farms gain traction, the need for high-quality battery components becomes increasingly critical.

Orion's focus on producing conductive additives that improve electricity flow and extend battery life is a direct response to the technical challenges faced by the battery industry. Improvements in battery efficiency and longevity are key factors in the adoption of electric vehicles and the reliability of renewable energy systems, which are central to the transition away from fossil fuels.

Investors should note that the expected facility start-up in 2025 positions Orion in a timeframe that coincides with projected spikes in electric vehicle sales and renewable energy deployment, potentially allowing the company to capture significant market share as these trends continue to rise.

HOUSTON--(BUSINESS WIRE)-- Orion S.A. (NYSE: OEC), a global specialty chemicals company, on Tuesday broke ground on a plant in Texas that will be the only facility in the U.S. producing acetylene-based conductive additives for lithium-ion batteries and other applications vital for the global shift to electrification.

The site in the city of La Porte, southeast of Houston, will create many high-skilled jobs – both in construction and technical fields – and bring innovative technology to the American economy. The battery additives produced by Orion’s plant will be super clean, with only one-tenth of the carbon footprint of other commonly used materials.

“Orion is already the sole producer of acetylene-based conductive additives in Europe,” Orion CEO Corning Painter said at the groundbreaking ceremony. “Our plant in La Porte will be a pivotal step toward strengthening the regional supply of conductive additives in the rapidly growing U.S. battery market.”

Every battery requires conductive additives. They enable a more efficient flow of electricity and extend the lifetime of lithium-ion batteries – the most valuable components of electric vehicles. The material also plays an essential role in high-voltage cables used for wind and solar farms.

The additives produced at the La Porte plant will be made from acetylene, a colorless gas that Orion’s production process turns into powder with exceptional purity demanded by leading battery manufacturers. The acetylene will be supplied by a neighboring site owned by Equistar Chemicals LP, a subsidiary of LyondellBasell.

At Tuesday’s groundbreaking ceremony, Kim Foley, LyondellBasell executive vice president of Global Olefins and Polyolefins, Refining and Supply Chain, said “At LYB, we see electrification as a crucial part of our plan to reduce carbon emissions across our industries. By supporting the production of key battery components, we're contributing to solutions for a better tomorrow.”

Orion’s plant in La Porte is similar to one the company has in the city of Berre-l'Étang in southern France. The facility also uses acetylene from LyondellBasell.

With the LaPorte project, key equipment procurement and off-site fabrication are already at an advanced stage. Field construction activities are ramping up, with the facility start-up expected in the second quarter of 2025.

About Orion S.A.

Orion S.A. (NYSE: OEC) is a leading global supplier of carbon black, a solid form of carbon produced as powder or pellets. The material is made to customers’ exacting specifications for tires, coatings, ink, batteries, plastics and numerous other specialty, high-performance applications. Carbon black is used to tint, colorize, provide reinforcement, conduct electricity, increase durability and add UV protection. Orion has four innovation centers and produces carbon black at 15 plants worldwide, offering the most diverse variety of production processes in the industry. The company’s corporate lineage goes back more than 160 years to Germany, where it operates the world’s longest-running carbon black plant. Orion is a leading innovator, applying a deep understanding of customers’ needs to deliver sustainable solutions. For more information, please visit orioncarbons.com.

Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements of future expectations that are based on current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. New risk factors and uncertainties emerge from time to time and it is not possible to predict all risk factors and uncertainties, nor can we assess the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information, other than as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240409707414/en/

Wendy Wilson

Orion S.A.

Head of Investor Relations

wendy.wilson@orioncarbons.com

+1 281-974-0155

William Foreman

Orion S.A.

Director of Corporate Communications and Government Affairs

william.foreman@orioncarbons.com

+1 281-889-7833

Source: Orion Engineered Carbons S.A.

FAQ

What is the ticker symbol of Orion S.A.?

Orion S.A.'s ticker symbol is OEC.

What is the purpose of the new plant in Texas?

The plant will produce acetylene-based conductive additives for lithium-ion batteries and other applications to support the global shift to electrification.

When is the facility start-up expected at the La Porte plant?

The facility start-up at the La Porte plant is expected in the second quarter of 2025.

Who will supply the acetylene for Orion's plant in La Porte?

The acetylene will be supplied by Equistar Chemicals LP, a subsidiary of LyondellBasell.

What role do conductive additives play in lithium-ion batteries?

Conductive additives enable a more efficient flow of electricity and extend the lifetime of lithium-ion batteries, crucial for electric vehicles.