Archroma Pakistan declares force majeure due to raw material shortage

Archroma Pakistan declares force majeure due to raw material shortage

KARACHI: Archroma Pakistan has declared force majeure effective Thursday due to inability to manufacture and supply goods as the company’s raw material supply lines have choked.

“Archroma’s raw materials and petrochemicals supplies coming from China are getting adversely affected by the ongoing ‘energy consumption controlling measures’ and ‘environmental checks’, coupled with disrupted global supply chain situation due to non-availability of vessels and containers,” the company noted in a bourse filing.

During the last few weeks, Archroma has been informed by some of the global raw materials suppliers, affected by such supply chain disruptions and have also declared force majeure, due to abovementioned situation.

“The consequences of these events, which are beyond our control and leading to challenges for procuring some of our raw materials, therefore, we are being forced to declare force majeure effective from today due to our inability to manufacture and supply such affected products for the time being”.

It may be mentioned here effective October 01, 2021, Archroma increased the prices of its products by up to $0.25/kg. The increase was necessary to offset the ongoing exceptionally high freight and logistics costs. “Archroma made every effort to absorb these increases,” Marcos Furrer, Chief Operating Officer at Archroma said. “We have however reached a point where these adjustments are needed for us to be able to maintain our service levels.”

Archroma is a global, diversified provider of specialty chemicals serving the branded and performance textiles, packaging and paper, and coatings, adhesives and sealants markets. Headquartered in Reinach, Switzerland, Archroma operates in over 100 countries, with 3,000 employees located in 35 countries and 26 production sites.

National Development and Reform Commission of China (NDRC) last month announced updated measures under its existing dual control policy to curb both energy consumption and energy intensity. This followed an earlier dual control scorecard issued in August that named provinces that had exceeded policy targets.

NDRC’s energy curbs were issued in anticipation of more severe fuel shortages and disruptions after the lessons of the previous winter, and to try and resolve the imbalance by clamping down on energy intensive demand while efforts to shore up supply continue.

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