Business & Finance

Pakistan's chemical maker declares force majeure amid disruption in China

  • Archroma Pakistan Limited says being forced to declare force majeure 'due to our inability to manufacture and supply such effective products for the time being'
Published October 15, 2021

Archroma Pakistan Limited has announced force majeure due to the company’s inability to procure raw materials and supplies coming from China.

Archroma Pakistan Limited, a subsidiary of Archroma Textiles GmbH, which manufactures, imports, and sells chemicals, dyestuffs and coating, adhesive and sealants, informed the Pakistan Stock Exchange (PSX) in its latest filing that its raw materials/petrol chemical supplies coming from China are getting adversely affected by the ongoing ‘energy consumption controlling measures’ and ‘environmental checks’ coupled with distributed global supply chain situation due to non-availability of vessels and containers.

Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, epidemic or sudden legal changes prevents one or both parties from fulfilling their obligations under the contract.

Archroma Pakistan Limited

“During the last few weeks, Archroma has been informed by some of the global raw material suppliers, affected by such supply chain disruptions and have also declared force majeure due to above-mentioned situation.

“As a consequence of these events which are beyond our control and leading to challenges for procuring some of our raw materials, therefore, we are being forced to declare force majeure effective from today due to our inability to manufacture and supply such effective products for the time being,” read the statement.

As per the company's third-quarter report 2021 for the period ending June 2021, Archroma achieved net sales of Rs14,843 million during the nine months ended 30 June 2021 versus Rs11,584 million in the same period of the previous year.

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