Chemical Supply Chain Risks 30Nov2015 - By: Charlotte Hicks

Alot happened this Thanksgiving week, specifically with El Nino, air quality, strikes, fire and economic crisis...  To make this post easy to read, I've highlighted the impacted raw materials in bold.

El Nino Summary: This El Nino is starting to cause droughts and disease across parts of the world. While governments are better prepared to deal with consequences, there is still risk to the food/water supply that not only impacts people, but also raw materials used in production.

  • Indonesia: slash-and-burn clearing of dry lands has created massive fires and pollution in Southeast Asia that has sickened hundreds of thousands of people. In normal years, rain fall keeps fires and pollution in control, however drought in these areas is causing the pollution to linger longer than normal impacting the work force. Indonesia’s exports include palm oil and cleanroom apparel. From my personal supply chain map, downstream products of palm oil include: 

(Note: Palm oil prices continue to climb which could intern impact January 1st pricing on these materials) 

Ascorbyl Palmitate           

Magnesium Stearate

Calcium Stearate               

Myristic Acid

Caprylic Acid                       

Palmitic Acid

Cetyl Palmitate                  

Polysorbate 20


Polysorbate 80

Isopropyl Myristate         

Sodium Dodecyl Sulfate

  • Vietnam: Rice prices are expected to increase as freshwater levels fall and saltwater floods into rice patties. This could impact the work force and hydroelectric sources.

  • Peru: warm waters are impacting the fisheries in Peru. While this may not sound like it would impact us, here is the connection to corn, soy and lysine: 
    -Peruvian anchovies are used to make protein meal
    -The protein meal is used in animal feed
    -A shortage of protein meal causes manufacturers to consume grains
    -Potential tightness in downstream commodities include soy, corn and lysine


Other risks: 

Venezuela: The Venezuelan economic crisis continues to develop due to depressed crude oil prices. As a result, strong forex regulations have been imposed in Venezuela, making it difficult for offshore companies to receive payments from their subsidiaries in Venezuela. In the case of India, Pharma is working with the Indian government to work out a “medicines for oil” barter. While my personal supply chain map does not show materials sourced from Venezuela, you should monitor your supply chain for materials imported and exported to/from Venezuela.  

China: Beijing and Shanghai residents have been advised to stay indoors as the government issued its the highest level smog alert. While coal burning (for winter heating) is a source of the smog, authorities have also temporarily shut down or reduced production of factories in Hebei. From my personal supply chain map, I see the following raw materials at risk.



Amino Acids


Ammonium Bifluoride







Silica Gel Desiccant


Sodium Pyruvate







Hydroxylamine HCl

Vitamins and Derivatives 

Rotterdam Port Strike: Longshoreman at the Rotterdam port in The Netherlands plan to strike a day (24 hours) in December and again in January in protest of possible job cuts. Rotterdam is Europe’s largest port and is one of the largest globally.  Be aware if you have materials shipping out of Rotterdam.

Fire at Strides Shasun:  A fire last week took out API manufacturing at Strides Sasun, however, on 23Nov, it was reported that they were able to resume production except in the block where the fire occurred. Strides Shasun manufactures pain management OTCs like Ibuprofen as well as other materials.

Author: Charlotte Hicks 


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“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”

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