Spain chemicals plants press on as two-week quarantine kicks off

Author: Jonathan Lopez

2020/03/16

LONDON (ICIS)--Petrochemicals and chemicals plants in Spain stepped up safety measures over the weekend as the country entered on Monday morning a two-week state of emergency due to the coronavirus outbreak.

The Spanish chemicals trade group FEIQUE, BASF Spain, and the trade group representing the petrochemicals hub of Tarragona said to ICIS that operations at all plants are running, but strict social distancing measures have been taken.

All office-based employees have been sent to work from home.

Spain’s coronavirus cases jumped over the course of last week. By Monday morning, nearly 9,000 cases had been confirmed, and nearly 300 deaths.

Spanish Prime Minister (PM) Pedro Sanchez declared on Saturday a state of emergency, starting at 8:00 CET on Monday, which entails all private health providers will be now under the authority of the national government.

The country’s main stock exchange Ibex 35 was trading nearly 10% lower on Monday morning; the main bourses in Europe all accumulated losses between 6% and 9% despite concerted measures taken by major central banks on Sunday to add liquidity to the markets.

The Spanish health system was put against the wall last week as coronavirus patients clogged up emergency services; the capital region of Madrid is the worst affected. Showing the extent of the outbreak, many public figures have tested positive, including the PM’s wife and several members of Parliament (MPs).

The hit to the Spanish economy is expected to be large, with the depth of the recession yet to be seen. On Monday morning, the main trade groups and trade unions in the country jointly asked the government to approve extraordinary measures to support the economy.

The Spanish government followed Italy’s example and decided that social distancing was the only way forward at this stage; the state of emergency confines Spaniards to their houses – they are only allowed out to buy groceries, due to medical necessity, or to go to their workplace.

EMERGENCY: ONE MONTH LIKELY
While chemicals companies have planned for office-based workers to work from home, those at the plants are still at their posts but strict measures for social distancing have been adopted.

For the moment, demand for petrochemicals in Spain remains normal for the time of the year as all industrial facilities remain open, according to the country’s chemicals trade group FEIQUE.

Its director general said to ICIS on Monday that the two-week state of emergency is likely to be extended for two more weeks, effectively putting Spaniards in quarantine for one month.

“The PM said we would get back to normal once the number of discharged patients outnumbers the positive cases; I think we are still far from that. We’ll probably follow the same trajectory than Italy, where the crisis is far from abating,” said Juan Labat.

He added however that chemicals plants are running normally; even if the crisis went into a second phase in which more social distancing measures were adopted, chemicals plants would still be running as they are considered a critical industrial sector.

“Chemicals plants are not like assembly lines. There are less workers and they can keep a prudent distance from each other. On top of that, we have stepped up disinfection measures, more cleaning, and workers plan their shifts so they don’t see each other when entering or leaving the workplace,” said Labat.

The director general for BASF Spain said that the German major’s plants in Spain has so far been running normally, and supply of raw materials has also been unaffected.

Carles Navarro said that, as Monday morning, the state of emergency would imply there will be police controls to access Tarragona’s chemicals park.

“[The] BASF plant in Tarragona is considered a critical [industrial] facility, so the Ministry of Interior has asked us to provide the names and the car registration numbers of all those who are going to access the plant,” said Navarro.

“We had already been monitoring truck drivers during the past few days so any supply to the plant didn’t entail any risk. For now, the state of emergency is not causing any disruption in our plants.”

While average for most products remains unchanged, Navarro said BASF has noticed a decrease of orders form automotive as some plants have reduced output or shut down; car dealerships are due to remain shut during the state of emergency.

Spain is the second largest EU automobile producer after Germany, according to figures by trade gropu ACEA.

BASF’s plants producing chemicals with end markets like the personal hygiene or disinfectants are running at full capacity, said Navarro, due to sharply higher demand.

The trade group representing Tarragona’s petrochemicals hub AQET also confirmed operations are running normally and said all its members are following public authorities’ guidance on social distancing.

Tarragona’s chemicals park is one of the most important in Spain, where majors like BASF, Dow, or Repsol have petrochemicals operations.

“Production continues unaffected and supply of products is running smoothly, and all chemicals plants are functioning. We have taken the necessary measures to guarantee the supply of certain raw materials which come from [coronavirus] risk areas, given industrial restrictions in those areas,” said AEQT’s president Francisco Montoya.

Front page picture: A member of Spain's Army Emergency Unit disinfects a railway station in Valencia on Monday
Source: Manuel Bruque/EPA-EFE/Shutterstock

Focus article by Jonathan Lopez