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An Aug. 10 fire led to a shutdown of production and a declaration of a force majeure in Europe
August 25, 2017
By: Anthony Locicero
Copy Editor, New York Post
The Aug. 10 fire at Ashland’s Marl, Germany facility has suspended production until at least late September and could set the company back $15-20 million, Ashland announced in a press release. The blaze led to a shutdown of production and subsequent declaration of a force majeure in Europe on 1.4 butanediol (BDO), tetrahydrofuran (THF) and formaldehyde, according to Global Communications Leader Gary Rhodes. The investigation is still ongoing, he said. Ashland said it expects volume to remain “somewhat” constrained into the first quarter of fiscal 2018. “Early estimates for the loss associated with the incident, which could change as new information becomes available, are in the range of $15 – $20 million, all but several million of which will be recorded in Ashland’s September fiscal quarter,” the press release states. “This range includes the lost profitability associated with any lost sales stemming from the lack of product availability during the quarter. “Given the unusual nature of the loss, Ashland plans to include the majority of the financial statement impact from the fire under ‘key items’ when it releases earnings for the September quarter, therefore having no impact to adjusted results. However, the lost profitability associated with any lost sales will impact adjusted results for the Intermediates and Solvents (I&S) reportable segment. As a result, Ashland now expects adjusted EBITDA for the I&S segment to be in the range of $5-10 million during the fiscal fourth quarter.” The force majeure situation in Europe is currently limited to BDO, THF and formaldehyde and has no impact on the supply of any other Ashland products, according to Rhodes.
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