AFPM ’21: Logistics constraints hitting niche products

SAN ANTONIO (ICIS)–Logistical constraints are causing delays in obtaining some niche chemicals that are used in very specialised products, the CEO of Huntsman said on Tuesday.

These niche chemicals are typically made by a sole source, said Peter Huntsman, CEO. He made his comments to ICIS on the sidelines of the International Petrochemical Conference, (IPC), held by the American Fuel & Petrochemical Manufacturers (AFPM).

Some of these specialised products could be 98% completed except for that one niche chemical, Huntsman said.

Because the niche chemical is supplied by a sole producer, companies cannot find an alternative source, Huntsman said. As a result, the company has little choice but to wait for the delivery.

More delays could result from the nature of producing specialised products.

Often, such products are manufactured in a cycle, Huntsman said. A company would make one product before cycling to the next one.

The company would continue making other products until it completes the cycle.

If shipping delays prevent a company from completing a product, it will not pause its production cycle, especially if the volume is small, Huntsman said. Instead, it will proceed with the next product in its production cycle.

AIR FREIGHT
In some cases, shipping delays has caused Huntsman to rely on air freight, he said.

He estimates that the company has shipped more product by air in the past year than in the previous 10.

The experience has illustrated supply-chain vulnerabilities and the value that customers give to Huntsman’s products, since they are willing to pay extra for air delivery, Huntsman said.

The IPC ends on Tuesday.

Interview article by Al Greenwood

(Thumbnail photo by ERIK S LESSER/EPA-EFE/Shutterstock)