Hurricane Rita didn´t pack the wallop of its predecessor Katrina, but it may have been more disruptive in the short term on rubber industry-related companies with facilities in the east Texas/west Louisiana Gulf Coast region.
Most companies were ready for Rita as it bore down on communities as far west as Corpus Christi and east toward New Orleans, which already faced overwhelming devastation at the hands of Katrina. The storm ended up hammering the coastline in places like Beaumont and Port Arthur, Texas, and Lake Charles, La.
Nearly all the rubber-related firms in the region shut down ahead of Rita´s expected Sept. 24 strike date, some as early as three days before. As of Sept. 28, most were still closed, with three polybutadiene rubber plants, four styrene-butadiene rubber units, eight butadiene and seven styrene monomer facilities reported down, according to the Chemical Market Associates Inc. Web site.
Seven carbon black plants representing nearly half of the U.S.´s production capacity also are located on the Gulf Coast, and six of them were shut down and evacuated as Rita approached, said Paul Ita, president of Notch Consulting Group in Amherst, Mass. Three of the sites suffered extensive damage from flooding and expect substantial down time.
Most companies contacted said it was too early during the week of Sept. 26 to determine the length of time their operations would be closed. They spent time evaluating damage, locating employees and determining the availability of essentials to restarting operations: power, raw materials, supply status and transportation.
A hit to supply
Polybutadiene and SBR manufacturer Firestone Polymers L.L.C. shut down its facilities in Lake Charles and Orange in anticipation of Rita. It also declared force majeure—the voiding of a supply contract due to an act of God—Sept. 22 for its Diene-, Duradene- and Stereon-brand customers. Damage to the plants, the length of the force majeure and the startup timeline were being evaluated during the week.
While some damage was sustained, the condition of equipment and processing chemicals within the facilities is stable and poses no hazard, a Firestone spokesman said.
Like Firestone, specialty chemicals manufacturer Sartomer Co. and SBR producer ISP Elastomers also declared force majeure after Rita hit. Sartomer, which has production facilities in Beaumont, made its declaration for its Wingtack-brand C5 hydrocarbon resins and shipments from Beaumont have stopped. Sartomer finalized the purchase of the Wingtack division from Goodyear earlier in September.
ISP Elastomers, based in Port Neches, Texas, said the hurricane would affect its obligations to deliver under current contracts or in general. Before it resumes production, the company needs to assess plant safety and damage; restore electrical power, water and steam, raw material supply and transportation access; and account for employees so they can return to the plant, according to Melvin W. Martin, ISP senior vice president and general manager.
ISP expects to restart no earlier than the week of Oct. 10, Martin said.
What´s down and out
Bill Hyde, a consultant with Houston-based CMAI, said it may be a little too early to tell what the real long-term impact of the hurricane and the shutdowns will be. There are many plants down, but several are in the process of coming back on line.
Hyde does believe, though, that this storm was more disruptive to the rubber industry than Katrina because of the plethora of operations in Rita´s path. In addition to infrastructure damage, any lack of electrical or steam power and raw material supply could keep the operations down for an extended period of time.
According to CMAI data as of Sept. 28, about 64 percent of the North American SBR capacity and 84 percent of the polybutadiene capacity was idle because of the hurricane´s effects. A spokesman for DSM Copolymer Inc., however, said the SBR producer never closed during Rita.
CMAI also said 68 percent of the butadiene prdouction capacity and 85 percent of the styrene capacity was down.
In the carbon black sector, damage to three plants—Cabot Corp.´s Franklin, La., facility and Degussa Engineered Carbons L.P.´s Orange and New Iberia, Texas, sites—will idle about 20 percent of U.S. capacity, for up to two weeks, Notch´s Ita said. While Hurricane Katrina-related carbon black shutdowns forced lost production of about 12.9 million pounds, Rita will force between 28.3 million and 35.3 million pounds of lost production, he said.
Cooper Tire & Rubber Co. announced Sept. 28 it will run its Texarkana, Ark., and Tupelo, Miss., tire plants on reduced schedules beginning Oct. 2 because of raw material shortages. It cited the damage at its suppliers´ carbon black and synthetic rubber plants, as well as limited transportation access, as the key reasons for the cutbacks.
The timeline for the curtailment at Cooper is unknown, but the company estimated it would take about 30,000 tires out of production per day.
In the Houston/Texas City, Texas, area, eight of nine oil refineries are in the process of restarting, but each of seven refineries to the east in the Beaumont/Port Arthur/Lake Charles area still are assessing operations and most don´t have power back yet.
Goodyear shut down its three chemical and synthetic rubber operations in Houston, Bayport and Beaumont, Texas, two days before Rita hit.
The Houston-area facilities, including an SBR plant, restarted Sept. 27, but the Beaumont facility, which produces SBR and polybutadiene, remained down because of power loss. The Beaumont factory houses more than 40 percent of the polybutadiene capacity in North America, according to CMAI figures.
Butadiene supplier Huntsman Corp. said none of its nine sites in the Texas/ Louisiana area had serious structural damage in Rita´s wake. As of Sept. 29, all of Huntsman´s facilities with the exception of those in Port Arthur, Port Neches and Lake Charles were in the process of restarting and expected to be on line within 48 hours.
The other three plants were closer to Rita´s epicenter when it hit land, and at press time had no power or other utilities up and running, the company said. "We feel extremely fortunate that none of our employees was injured and none of our facilities sustained serious damage, especially since the eye of the storm passed directly over Port Arthur," said Peter Huntsman, the company´s president and CEO.
Lanxess Corp.´s Orange facility—which produces polybutadiene, EPDM and HNBR—did sustain some structural and flooding damage, and the company continues to assess the extent of it before resuming production or bringing people back. The company had no reports of injuries.
Firestone Polymers wasn´t aware of any injuries, either, but did know that some employees had lost or suffered major damage to their homes. The company was attempting to contact employees who had moved to safe areas in the region or who hadn´t checked as of presstime.