PANAMA CITY, Fla.—After several months of recovery following October's Hurricane Michael, Kraton Corp. has lifted its force majeure declaration for tall oil products.
Kraton had implemented the declaration for its North American tall oil fatty acid (FA-2) and distilled tall oil product lines after the hurricane. By November, Kraton had restored the Panama City facility's tall oil capacity to 100 percent, or about 107 kilotons, said H. Gene Shiels, director of investor relations.
The Panama City facility still is working on its crude sulfate turpentine processes, which were operating at about 60 percent by the end of December, Shiels said. The company's goal is to bring its CST processes back to full capacity by mid-first quarter 2019, after which the refinery will return to pre-hurricane supply rates.
The facility employs about 115, and while there was some modification to schedules while the plant was down, most everyone at the plant is working toward their full shifts at this point, Shiels said.
"It's a pretty quick recovery at this point versus what some people had anticipated," he said.
Recovering from the hurricane took time, but the company saw support from its employees days after the storm passed, Shiels said. When President and CEO Kevin Fogarty went out to the site, employees showed up to help with recovery efforts.
"He was saying, 'We appreciate you being here, but you guys need to be taking care of your families.' And one of the employees said, 'With all due respect, by getting this plant up and running, we are taking care of our families.' It's a small community, and it's an important job provider in the area," Shiels said.
About eight employees lost everything in the hurricane, and quite a few suffered substantial damage to their homes, he said.
"But they were at the plant, getting it up and running. That's their livelihood, and they were very dedicated," Shiels said.
The company did set up a fund to help support some of the hardest-hit employees, he said.
Repairs were slow going at first, as it took several weeks to get power back to all areas of the plant so that equipment could be checked for damage. Though some damage was directly visible, other parts required metallurgical testing and a deeper investigation. Among the damaged sections were two cooling towers, which had to be demolished and are in the process of being replaced, and a fractionation column within the CST process that is being refabricated, Shiels said. The building itself also sustained damage.
Kraton did not share an estimate of property damages or on total business interrupted by the hurricane. The maximum deductible the company would pay would be $14 million, Shiels said.
The company was able to mitigate some of that through product stored in local warehouses and tanks, which had only suffered minor water incursion that didn't damage the product, Shiels said. Kraton also was able to leverage some of its CTO capacity in its Savannah, Ga., facility to support customers, one of four global refineries with those capabilities, including the Panama City location, Pensacola, Fla., and Dover, Ohio. Most of the assistance came from the Savannah location, as the most logistically feasible.
"We were able to satisfy a lot of customer demand with inventory and product in tanks," Shiels said. "The force majeure was really directed at certain product grades where we didn't have all that we needed."
But the Panama City facility is Kraton's lone location with CST processing and refining capabilities, Shiels said.
Customers generally understood the difficulty bringing the facility back to full capacity, and several donated to the relief fund supporting Kraton employees," Shiels said. "Customers have been frustrated in terms of product availability, but understanding, and have been very patient with us as we get the plant back up and running."