News & Events

Hurricane Ike Resin Supply Update

The cleanup from Hurricane Ike continues and power outages remain across Houston and along the Texas Coast to the Louisiana Border. Feedstock, utilities (electricity and gas) and logistics (truck, rail, barge and ship) are major factors in determining when facilities can restart. While some plants have begun production, there is no exact timetable to when the supply channels will return to pre hurricane levels. Silgan is carefully monitoring our supplier’s progress as they restart their facilities.

Our resin suppliers are facing numerous force majeures and allocations from their raw material suppliers in addition to the same utility and logistical challenges previously mentioned. As a result, many of our resin suppliers have declared their own force majeure notifications or are on sales allocation. Additional force majeure and/or allocation announcements are a possibility as the difficult task of restarting major production facilities continues.

As previously communicated, Hurricane Ike has impacted PE and PP products more so than PET due to the large percentage of PE and PP production on the
Gulf Coast. Since PET production is away from the Gulf Coast, it is not as greatly affected. Despite numerous MEG (major PET feedstock) suppliers on the Gulf Coast declaring force majeure, our key PET suppliers have found alternative sourcing from NON Gulf Coast suppliers.

Based on Silgan’s current supply allocations and alternative supply plans that have been made, we are cautiously optimistic that we can meet all normal customer requirements. We will continue to keep you updated as this situation unfolds

As noted in earlier communications, our greatest risk will continue to be single-sourced items. This remains an opportune time to review the need for alternative resins to help mitigate this risk in the future.

DJC Hurricane Ike Update 9/23/08