PPG declares "force majeure" due to fire - KPLC 7 News, Lake Charles, Louisiana

PPG declares 'force majeure' due to fire

LAKE CHARLES, LA (KPLC) -

It was Christmas Eve when there was a serious fire at PPG industries -- one that caused damage so serious to the vinyl chloride monomer unit that it's been shut down. 

The company cannot meet its contract obligations to its customers so PPG has declared what's called a force majeure, aimed at protecting itself from getting sued.

Jeremy Neuhart is with PPG Corporate Communications in Pittsburg. He explained: "Force majeure is invoked in situations where factors outside of our control significantly disrupt operations and as such we're not able to meet certain customer obligations," said Neuhart.

With the equipment damage and lost sales volume, Neuhart said the company's commodity chemicals earnings may be reduced by $5 to $8 million in the 4th quarter of 2012 and possibly up to $5 million next year.

"We're working to minimize any and all impact on our customers. From an earnings standpoint, based on what we know. We estimate that expenses stemming from equipment damage and  lost sales will impact our commodity chemical earnings from between $5 and $8 million in the fourth quarter of this year and perhaps and incremental $2 to $5 million in 2013," said Neuhart.

The fire itself is still under investigation. Explained Neuhart, "The fire was isolated to the vinyl chloride monomer unit. We can't predict when that will be up and running. But we do have teams working right now to repair it and quickly as possible," he said.

Neuhart said the cause must still be determined. PPG has not released the name of the injured employee who, at last word, was still hospitalized for smoke inhalation. Though the vinyl chloride monomer unit is down, there is no word of any employees being displaced or laid off.

The situation is not expected to affect the merger with Georgia Gulf.

Copyright 2012 KPLC All rights reserved.

To read PPG's news release click here.

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