Cabot Corp. started construction on a $89 million plant, expected to open in 2020, which will manufacture fumed silica, and create a 32-jobs in Carrollton, Kentucky.

Silicone products manufactured by Dow, which celebrated its 50th year in Carrollton, are used by Cabot as a building block for producing fumed silica, an ultra-fine, high-purity particle used as a performance additive in a broad range of applications. Dow, in turn, uses Cabot’s fumed silica in its silicone products as well as a by-product from Cabot’s production process in its operations.

“The long standing commitment by Dow to its Carrollton site has brought employment and a better quality of life for generations locally,” Governor Bevin said. “Leaders of both Dow and Cabot know this co-location model creates great efficiency and we are confident they have the resources to thrive in Kentucky’s much improved business climate. I am personally grateful to Dow for reaching its golden anniversary here in the commonwealth. We are delighted to welcome Cabot to Kentucky, where it can build a legacy to match Dow Corning’s 50 years of economic impact in the region.”

Dow and Cabot have developed a cooperative relationship as both supplier and customer to each other. They currently operate neighboring plants in Michigan, and Wales, United Kingdom.

Cabot President & CEO Sean Keohane said the new plant strengthens the corporate relationship with Dow as well as the region’s economy. “This is yet another example of our corporate strategy at play as we continue to invest and strengthen our core market capabilities,” said Keohane. “This is a great day for Cabot as we expand our presence in North America by building adjacent to our longtime partner Dow in Carrollton. As leaders in our respective industries with a shared commitment to manufacturing and safety, health and environmental excellence, co-location in Carrollton was a natural fit. We look forward to bolstering our partnership, the local economy and community with our new operation.”

Howard Ungerleider, Chief Financial Officer of Dow DuPont, said the two facilities will make positive impacts in Kentucky for years to come. “For 50 years, Dow has been an employer, neighbor and corporate partner in the region. We are proud of how far the Carrollton site has come and excited to recommit to the site with the groundbreaking of the new Cabot plant,” Ungerleider said. “The plant will provide a long-term supply of high quality CAB-O-SIL® fumed silica and enable growth of Dow’s silicones products at both our Carrollton and Midland, Michigan, facilities.”

For Dow, the event also highlights the plant’s 20 years in the OSHA Voluntary Protection Programs, a designation from Kentucky OSHA. The 450-employee facility, located on a 1,200 acre site, makes siloxanes, base silicon materials, used in manufacturing products for the electronics, personal care, construction and energy industries.

Construction for the Carrollton plant began in 1965 and the facility opened in 1967. The plant also houses Dow global dimethyl silicone research team, which works to improve manufacturing processes for silicon base products. The plant is undergoing a $9.5 million, 20-job expansion announced in June to add finishing lines and prepare property for the Cabot facility.

Dow, which also operates sister plants in Elizabethtown and Louisville, is a Michigan-based subsidiary of DowDuPont and the world’s largest supplier of silicone products.

Boston-based Cabot dates back more than 130 years and manufactures specialty chemicals and performance materials such as carbon black, fumed metal oxides, activated carbon, cesium formate drilling fluids, masterbatches and conductive compounds, aerogel, fine cesium chemicals, graphenes and inkjet colorants. Its fumed silica is used in a broad range of products, including adhesives, sealants, cosmetics, batteries, toners, silicone elastomers, coatings and pharmaceuticals.

To encourage the investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in May preliminarily approved Cabot for tax incentives up to $750,000 through the Kentucky Business Investment (KBI) program. In June, KEDFA preliminarily approved Dow for up to $300,000 through KBI for its project. The performance-based incentives allow companies to keep a portion of their investments over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets.

Additionally, KEDFA approved Cabot for up to $250,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing. The companies also can receive resources from the Kentucky Skills Network.