Ashland resumes normal operations in Texas and Germany

Ashland has resumed normal operations in its manufacturing facilities in Texas City, Texas, and Marl, Germany, after shutting down last month due to Hurricane Harvey in south Texas and a previously announced fire at the German plant.

The Texas City plant – which produces PVP linear and crosslinked homopolymers, PVP/VA copolymers and NMP – returned to full production late last week after being down nearly three weeks due to the impact from the hurricane.

Local staff and a supplemental team of experts from across Ashland followed a comprehensive recovery plan to ensure all equipment was safe and in proper working condition prior to restart.

Rail service to the plant is back online, and shipping operations have returned to normal at the warehouse near the Texas City facility.

Ashland has also seen marked improvements in the broader shipping, trucking and rail networks, although some congestion remains and bulk truck capacity is tight in Texas as plants in the area restart and work through pent-up demand.

The Port of Houston has re-opened although some delays are expected, and domestic shipping is improving, particularly for packaged goods.

"This was an incredible team effort to help the Texas City plant return to safe and responsible operations following such a tragic event," said William A. Wulfsohn, Ashland Chairman and Chief Executive Officer.

"It’s a testament to the tremendous pride and commitment of everyone involved, particularly our 180 colleagues in Texas City, many of whom are facing personal hardship and property losses following the unprecedented flooding.

"At the same time, teams from across our organisation – including operations, supply chain, information technology, environmental, health and safety, and human resources – have provided critical support and expertise."

Based on current information, Ashland does not expect the event to have any material impact to adjusted results in the September quarter.

The Marl plant in Germany, which produces 1.4 butanediol (BDO), tetrahydrofuran (THF) and formaldehyde, has also restarted production ahead of schedule.

The company declared a force majeure in Europe on August 11 as a result of a fire that led to the shutdown of the plant.

Supply of those products in Europe remains somewhat restricted in the short term as the company works to rebuild inventory and return to normal operations.

Ashland has been working closely with affected customers to minimise the impact to their respective businesses during the shutdown and while the force majeure is in effect.

As a result of the faster-than-anticipated return to production, Ashland has reduced its expectation of the financial impact of the fire and subsequent plant shutdown by approximately US$5M, to an expected impact of US$10-15M.

As previously stated, 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 & Solvents (I&S) reportable segment.

Ashland continues to expect adjusted EBITDA for the I&S segment to be in the range of US$5-10M during the fiscal fourth quarter.