Specialty chemicals maker Ashland expects supplies of intermediates from a plant in Germany to be affected into next year after production was suspended following a fire earlier this month.
In an update, the Covington, Kentucky-based company said that it continues to asses the situation at a plant in Marl, Germany, where the August 10 fire resulted in the company halting production of 1.4 butanediol, tetrahydrofuran and formaldehyde.
No one was hurt in the fire but production is halted while the company investigates the cause of the blaze and extent of its damage. The company said the initial estimates are that damages will run $15 million to $20 million, most of which it will write off in the current quarter. It said it now expects adjusted EBITA in fourth quarter for its intermediates and solvents unit to range from $5 million to $10 million.
Ashland said that it will be early next month, at the earliest, before production can resume and that it expects production volumes to be “somewhat constrained into the first quarter of fiscal 2018." It is working with clients to help them find supplies of the three products.
Ashland is not the only pharma producer to deal with a plant fire this month. India’s Alembic reported that a blaze disrupted production at an Algerian-based generics plant that is part of a joint venture between Alembic Mami and local pharma Adwiya Mami. No one was injured in that fire either.
But that wasn’t the case for a fire late last year at a Sun Pharma API plant in Ahmednagar. Two people were killed and two others injured when a fire ignited during excavation work at the facility.