Materials manufacturer Covestro said it has lifted the force majeure on the polyurethane raw materials MDI and TDI in Europe that it declared on Oct. 6.
A raw material supplier that had experienced an outage had lifted its own force majeure and began to supply Covestro with nitric acid once again. Covestro therefore was able to resume full deliveries of the chemical isocyanates MDI and TDI and byproducts.
Force majeure refers to any natural and unavoidable catastrophe. A force majeure clause is included in contracts to remove liability when such events restrict participants from fulfilling their obligations.
The raw materials are key ingredients in the production of polyurethane foam, which is used in a variety of applications to create consumer and industrial products, including footwear, sportswear and outerwear, as well as furniture cushions and mattresses, insulation, coatings and adhesives.
During the force majeure period, Covestro, based in Leverkusen, Germany, said it made considerable efforts to compensate for the missing raw materials by making alternative purchases from other suppliers. The company also kept its customers and suppliers informed about the situation and helped them find alternative solutions.
Covestro does not expect the situation to have any negative effects on the company’s declared business targets for 2016.
For the six months ended June 30, Covestro’s earnings before interest, taxes, depreciation and amortization rose 14.9 percent to 1.1 billion euros, or $1.2 billion, while sales fell 6.4 percent to 5.9 billion euros, or $6.5 billion. Net income increased 54.3 percent to 412 million euros, or $452.5 million.
Covestro is considered the largest manufacturer of polyurethane in the world, according to ISOPA — the European Diisocyanate and Polyol Producers Association.
The company’s business activities are focused on the manufacture of high-tech polymer materials and solutions in sectors such as textiles, sports and leisure, automotive, electrical and electronics, and construction. Formerly Bayer Material Science, Covestro has 30 production sites around the world and employs about 15,800 people.
Covestro was spun off last year from Bayer AG, which invented polyurethane.