Ashland provides update on impact to operations from August 10 fire at manufacturing facility in Marl, Germany
August 23 2017 - 4:30PM
COVINGTON, Kentucky, August 23,
2017 - Ashland (NYSE: ASH) today provided an update on the impact
to its operations as a result of a fire at its manufacturing
facility in Marl, Germany, that led to the shutdown of production
operations on August 10 and the subsequent declaration of a force
majeure in Europe on 1.4 butanediol (BDO), tetrahydrofuran (THF)
and formaldehyde.
As previously announced,
production at the facility has been suspended while an
investigation into the cause and extent of the fire continues.
Ashland's safety procedures and emergency response systems worked
as designed and, as a result, there were no significant injuries
from the incident. However, the Marl facility is currently unable
to produce any 1.4 BDO, THF or formaldehyde, and the availability
of product is significantly reduced, leading to the force majeure
in Europe.
Based on initial results of the
investigation, the company currently estimates that production will
be suspended until late September at the earliest, with volume
expected to remain somewhat constrained into the first quarter of
fiscal 2018. Early estimates for the loss associated with the
incident, which could change as new information becomes available,
are in the range of $15 - $20 million, all but several million of
which will be recorded in Ashland's September fiscal quarter. This
range includes the lost profitability associated with any lost
sales stemming from the lack of product availability during the
quarter.
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
and Solvents (I&S) reportable segment. As a result, Ashland now
expects adjusted EBITDA for the I&S segment to be in the range
of $5 - $10 million during the fiscal fourth quarter.
The force majeure situation in
Europe is currently limited to BDO, THF and formaldehyde and has no
impact on the supply of any other Ashland products. Ashland is
working with affected customers to minimize the impact to their
respective businesses, and will continue to provide updates
regarding supply capability.
About
Ashland
Ashland Global Holdings Inc. (NYSE: ASH) is a premier global
specialty chemicals company serving customers in a wide range of
consumer and industrial markets, including adhesives, architectural
coatings, automotive, construction, energy, food and beverage,
personal care and pharmaceutical. At Ashland, we are nearly 7,000
passionate, tenacious solvers - from renowned scientists and
research chemists to talented engineers and plant operators - who
thrive on developing practical, innovative and elegant solutions to
complex problems for customers in more than 100 countries. Visit
ashland.com to learn more.
C-ASH
Forward-Looking
Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
and Section 21E of the Securities Exchange Act of 1934, as amended.
Ashland has identified some of these forward-looking statements
with words such as "anticipates," "believes," "expects,"
"estimates," "is likely," "predicts," "projects," "forecasts,"
"objectives," "may," "will," "should," "plans" and "intends" and
the negative of these words or other comparable terminology.
Ashland may from time to time make forward-looking statements in
its annual reports, quarterly reports and other filings with the
SEC, news releases and other written and oral communications. These
forward-looking statements are based on Ashland's expectations and
assumptions, as of the date such statements are made, regarding
Ashland's future operating performance and financial condition, as
well as the economy and other future events or circumstances.
Ashland's expectations and assumptions include, without limitation,
internal forecasts and analyses of current and future market
conditions and trends, management plans and strategies, operating
efficiencies and economic conditions (such as prices, supply and
demand, cost of raw materials, and the ability to recover
raw-material cost increases through price increases), and risks and
uncertainties associated with the following: the impact to the
Intermediates and Solvents segment of the shutdown at the Marl,
Germany manufacturing facility, the impact of acquisitions and/or
divestitures Ashland has made or may make, including the
acquisition of Pharmachem (including the possibility that Ashland
may not realize the anticipated benefits from such transactions);
Ashland's substantial indebtedness (including the possibility that
such indebtedness and related restrictive covenants may adversely
affect Ashland's future cash flows, results of operations,
financial condition and its ability to repay debt); the potential
that Ashland does not realize all of the expected benefits of the
separation of its Valvoline business; and severe weather, natural
disasters, cyber events and legal proceedings and claims (including
product recalls, environmental and asbestos matters). Various risks
and uncertainties may cause actual results to differ materially
from those stated, projected or implied by any forward-looking
statements, including, without limitation, risks and uncertainties
affecting Ashland that are described in Ashland's most recent Form
10-K (including Item 1A Risk Factors) filed with the SEC, which is
available on Ashland's website at http://investor.ashland.com or on
the SEC's website at http://www.sec.gov. Ashland believes its
expectations and assumptions are reasonable, but there can be no
assurance that the expectations reflected herein will be achieved.
Unless legally required, Ashland undertakes no obligation to update
any forward-looking statements made in this news release whether as
a result of new information, future events or otherwise.
Information on Ashland's website is not incorporated into or a part
of this news release.
FOR FURTHER INFORMATION:
Investor Relations:
Seth A. Mrozek
+1 (859) 815-3527
samrozek@ashland.com
Media Relations:
Gary Rhodes
+1 (859) 815-3047
glrhodes@ashland.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ashland Inc. via Globenewswire
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