UpdateStrikes force Arkema to declare FM on Lavera oxo-alcohols

14 October 2010 14:48  [Source: ICIS news]

(Updates with details throughout)

LONDON (ICIS)--Arkema has declared force majeure (FM) on supplies of oxo-alcohols from its Lavera, France, plant as a result of the strikes that have hobbled the country’s chemicals production, a company source said on Thursday.

“We had to declare force majeure, as we are in a shutdown,” a company source said. “We do not know for the time being how long this will last.”

The source said there were three strike-related reasons for the outage and force majeure declaration: the shortage of feedstock propylene due to refinery closures caused by port strikes; a lack of workers at Lavera due to the nationwide general strikes; and the unavailability of railcars to transport products to and from the plant.

However, the company said it had enough of both products in stock to prevent any production outages or force majeure declarations in its downstream acrylate ester and plasticiser markets.

Strikes at Marseille's Fos-Lavera oil port entered its 18th day on Thursday, and national strikes over pension reform began on 12 October. Both were now on rolling deadlines that are renewed for a further 24 hours each day.

Under the Oxochimie name, Arkema produces 150,000 tonnes/year of butanol and 150,000 tonnes/year of 2-ethylhexanol (2-EH) at the Lavera site, according to ICIS data.

The outage and force majeure would most likely continue until the port strikes end and propylene can be produced, the source said, adding that the company would try to get propylene elsewhere to restart production. But with most of the transportation sector out of commission, that would be a challenge.

Much of Arkema's oxo-alcohols are sold on the merchant market, where 2-EH has been critically tight for several weeks as a result of an ongoing force majeure at Polish major Zaklady Azotowe Kedzierzyn (ZAK). That company is currently in a shutdown to replace a catalyst.

At Arkema, however, the two molecules are also important feedstock for downstream production. While those products are currently unaffected, other producers in France said they were already feeling the pain of the unrest.

“It’s a big mess in France,” one producer source said on Thursday. “All the industry is paralysed.”

For more on oxo-alcohols, plasticisers and acrylates visit ICIS chemical intelligence
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By: Libby George
+44 208 652 3214

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