Celanese Corporation Declares Force Majeure on Western Hemisphere Acetic Acid and VAM

Celanese Corporation, a global chemical and specialty materials company, today confirmed a declaration of force majeure and sales control for acetic acid and vinyl acetate monomer (VAM) sold in the Western Hemisphere. This comes as a result of intensifying force majeure conditions and operational failures experienced by multiple suppliers of critical raw materials essential to Celanese’s production of these products. Production challenges caused by these raw material supply disruptions, as well as other operational issues in its Acetyl Chain U.S. gulf coast network, are being assessed and actions are being taken to offset production losses.

The Acetyl Chain business is focused on meeting customers’ needs by utilizing all available network capabilities. The business has invested over the years to strategically enhance the flexibility of its integrated supply chain and will exercise that optionality to minimize customer disruptions. While under sales control, all non-contracted orders will be reviewed on a case-by-case basis.

  

“Right now, we anticipate that our second quarter U.S. gulf coast production of acetic acid and VAM will be negatively impacted by 15 to 20 percent as a result of these temporary challenges which we are still navigating,” said Mark Murray, senior vice president of the Acetyl Chain. “As we work through these challenges, we are prioritizing continuity of supply for our customers by employing the optionality that has been the hallmark of this business. The primary financial impact of these challenges in the second quarter will be due to incremental costs associated with production at higher cost facilities, external sourcing, and logistics in order to minimize impacts to our customers. There may also be a volume impact in the quarter depending on the magnitude of lost production.”   

Celanese regrets the impact this could have on customers and will stay in close communication to minimize the impact of these challenges. At this time, Celanese cannot provide any further details or timing of the full impact to customers or to its financial outlook. Celanese will comment further on the resolution of these temporary challenges and the financial impact when it reports second quarter earnings.

source:Celanese