May 10, 2018
Subject: Important Message – DRT and Privi Fires and Force Majeure
We wrote to you in November 2017 informing you of a fire in the Citral production unit of BASF, a major supplier to the fragrance industry. We have now been informed by BASF that initial Citral production has commenced, however supply chain replenishment will take time as downstream products become available in the coming months.
As you may have heard, two other major fires have recently struck the aroma chemical industry. The first occurred in DRT’s plant in Roha, India on February 19th, 2018 affecting their Di-hydromyrcenol (DHM) and Anthamber® (ISO-E Super) production lines. Fortunately, there were no injuries but their factory suffered severe damage. On February 21st DRT declared Force Majeure on DHM, ISO-E Super and all by-products. Factory repairs will take at least 12 months.
On April 26th, the other fire occurred at, the plant of Privi in Mohad, India, which destroyed large parts of the factory manufacturing DHM, Beta Ionone, Terpenyl Acetate, Citronellyl Nitrile and a range of other aroma chemicals. Again, fortunately, there were no injuries, but their factory suffered severe damage. Privi invoked Force Majeure on May 7th. DRT and Privi are market leaders for DHM and ISO-E Super, and together represent a major share of the global capacity of these products.
These latest fires, which come on top of an already tight raw material supply situation, will result in major disruptions across the fragrance industry. These events are completely unprecedented. At Agilex, we immediately activated a cross functional task force to manage this crisis. At this time we can share the following consequences and actions that Agilex is taking:
– A number of fragrance raw materials are in short supply.
– In order to ensure supply continuity, we are both rebalancing and/or substituting using olfactively similar ingredients. While we will make every effort to minimize changes to your formulas, there may be olfactive, chemical and other differences between the previously provided and the modified formulations.
– Orders received starting May 10th will be fulfilled using such modified formulas for the affected fragrances.
– As with the previous BASF Force Majeure, Agilex is unable to provide samples of any such modified formulas. Prior to use we advise you to perform any and all reasonable test procedures to ensure that the modified formulations are acceptable. Agilex will not be responsible for any damages associated with the differences between your original formulations and the rebalanced formulations.
– These disruptive events have put even further pressure on raw material costs.
We regret any inconvenience caused by these events that are outside our control and thank you for your understanding during this challenging time. We will keep you updated as soon as we hear more from our suppliers.