Afternoon Coffee: Arkema Explosion Disrupts Chemical Supply Chains, Political Disputes Hamper Hyundai

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An Arkema Group plant near Houston reported two explosions early Thursday, triggering an intense fire that continues to burn, according to NBC News.

The plant manufactures organic peroxides used in products such as kitchen countertops, industrial paints, polystyrene cups and plates, and PVC piping. While Arkema has many other plants that could balance the temporary loss of this facility, the supply impacts to upper tiers of supply chains, including auto manufacturers, could be considerable.

The chemical supply chain is merely one of many affected by Hurricane Harvey. Be sure to check out our Q&A on what procurement teams should do to respond to the storm, as well as our compilation of research and resources to craft a response strategy for natural disaster risks.

Hyundai Production Suspension 

Political disputes between Beijing and Seoul are causing supply chain headaches for Hyundai. As the Wall Street Journal reports, the automaker was forced into a weeklong production suspension in China because it was unable to pay one of its critical suppliers due to political bickering.

Sears’ Woes

Sears is having trouble keeping products on its shelves, according to Reuters. The department store’s precarious financial position has caused some of its suppliers to flee, while others are demanding stricter payment terms and insurance to hedge against default risk. 

More Storms Loom

And finally, a weather update: Two new tropical threats are forming in the Gulf of Mexico and the Atlantic, the Washington Post reports, with a new hurricane named Irma forecast to strengthen significantly — to a Category 3 or higher.

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