Ashland (NYSE: ASH) issued the following statement related to the impact to its manufacturing operations and supply chain as a result of Hurricane Harvey:
Ashland operates two manufacturing facilities in the Houston area and south Texas – one in Texas City and the other in Kenedy. Together these sites employ approximately 230 employees. Our top priority is the safety of our employees and the surrounding communities. Both plants were shut down according to plan last weekend due to the storm, and all employees are accounted for and safe.
The Kenedy plant, which primarily produces N-HanceTM guar derivatives and AquaflowTM rheology modifiers, restarted operations on Monday, Aug. 28. Our Texas City plant – which produces PVP linear and crosslinked homopolymers, PVP/VA copolymers and NMP – is currently conducting a comprehensive assessment and inspection of the entire facility to ensure all equipment is safe and in proper working condition prior to restarting operations. While this assessment is progressing steadily, there is much more work needed to validate the operational condition of all the critical plant equipment. At this point, it is premature to estimate when the plant will resume full production.
Like nearly every company in the region, we are facing significant challenges to our supply chain as a result of the torrential rain and flooding. At this time, the biggest challenge is the constraints facing the broader shipping, trucking and rail networks. We are monitoring the situation closely and implementing contingency plans. We also are working through challenges associated with moving materials in and out of the region.
At this time, Ashland has not declared force majeure. We are working diligently to supply our customers from existing inventories wherever possible.
We also source many key raw materials from the affected region for our other North American facilities. All efforts are being made to utilize alternate sources of supply during this period. In some cases, existing inventories will mitigate the potential disruption of supply. Nevertheless, lack of raw materials for production may occur in some instances.
These challenges are not unique to Ashland. However, through our Incident Management Team and the efforts of our operations teams on the ground in Texas, we are committed to resuming production as soon as possible while maintaining safe and responsible operations.
Given the uncertainty around the time needed to resume full production at Texas City and the ongoing transportation and logistics challenges in the affected regions, it is premature to estimate the potential impact to Ashland’s earnings from the hurricane.
Ashland announced that it has made a $125,000 donation to the American Red Cross to support disaster relief. In addition, Ashland employees across the U.S. are donating gift cards to provide a helping hand to their colleagues in Texas City and Kenedy who have been affected by the flooding. Additional employee assistance is planned.
