Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, has announced a declaration of force majeure and sales control for acetic acid and vinyl acetate monomer (VAM) sold in the Western Hemisphere. This decision is a response to escalating force majeure conditions and operational breakdowns faced by several suppliers of critical raw materials crucial for Celanese’s production of these chemicals. The company is assessing production challenges caused by these raw material supply disruptions, along with other operational issues in its Acetyl Chain U.S. Gulf Coast network, and is taking steps to mitigate production losses.
The Acetyl Chain business is committed to meeting customer demands by leveraging its entire network capabilities. Over the years, the business has made strategic investments to enhance the flexibility of its integrated supply chain and will utilize this flexibility to minimize disruptions for customers. During the sales control period, all non-contracted orders will be reviewed on a case-by-case basis.
Mark Murray, senior vice president of the Acetyl Chain, stated, “We anticipate that our second-quarter U.S. Gulf Coast production of acetic acid and VAM will be adversely affected by 15 to 20 percent due to these temporary challenges which we are currently managing. We are prioritizing continuity of supply for our customers by leveraging our business’s flexibility. The primary financial impact in the second quarter will stem from incremental costs related to production at higher-cost facilities, external sourcing, and logistics to minimize disruptions to our customers. There may also be a volume impact in the quarter depending on the extent of lost production.”
Celanese acknowledges the potential impact on customers and is committed to minimizing disruptions. The company will maintain close communication to manage these challenges effectively. Currently, Celanese is unable to provide further details or the timing of the full impact on customers or its financial outlook. Further updates on the resolution of these challenges and their financial impact will be provided during the second-quarter earnings report.
