BASF fire’s effects in human nutrition likely to be small

An explosion at a BASF plant in Ludwigshafen, Germany could send a shock through the global supply of vitamins A and E in feed markets but is unlikely to significantly affect the human nutrition side. 

The affected portion of the plant supplies precursors for vitamin and carotenoid production. 

As far as supply chain disruptions are concerned, BASF released this statement on Aug. 1: 

“At present, we cannot rule out delays or disruptions for products from the vitamin E and vitamin A value chain and related carotenoids. Regarding aroma ingredients, we continue to produce core products of our aroma ingredients portfolio such as Citral, Citronellol, Linalool, Geraniol, Lysmeral, and related derivatives. We cannot rule out delays or disruptions for selected other aroma ingredients.” 

The fire, in which 15 workers were injured, was attributed to an organic solvent leak. The company said there was no air, water or soil pollution associated with the event, which occurred on July 29. The fire was extinguished by the company’s in-house fire department. The injured workers received medical attention and were discharged the same day. 

As of Aug. 5, the company said it had reentered the affected area of the plant, started assessing the damage and begun remediation work. The first step in that process is to remove the water left from fighting the fire, all of which is contaminated and requires special processing. 

Not the first explosion at the plant affecting vitamin production 

Explosions at chemical processing facilities are always a risk, especially when holding large quantities of volatile solvents is part of the process. 

An explosion at a krill oil processing plant in Quebec in 2013 that was owned by Neptune Technologies and Bioressources (now known as Neptune Wellness Solutions) killed one worker and put the plant offline for months. That event permanently altered the trajectory for the company. 

There have been other incidents at the Ludwigshafen plant as well. In 2017, BASF suffered another explosion and fire at the plant. That event also affected the global supply of vitamins A and E.   

On Wednesday, the company declared force majeure on contracts related to vitamin and carotenoid supply involving the affected facilities. BASF made a similar declaration relating to the 2017 fire, after which the company reportedly had to rebuild market share lost while it repaired its facilities and brought them back into production.

And in 2016, an explosion and fire killed three workers who were doing maintenance on pipelines that deliver feedstocks to the vast plant where – in addition to food-grade chemicals – insulating materials, solvents and paints are produced. According to BASF, the Ludwigshafen plant located on the Rhine River south of Frankfurt is the world’s largest integrated chemical complex, covering 10 square kilometers. 

Supply for human nutrition markets unlikely to be affected 

Industry sources contacted by Natural Products Insider said the most recent event is unlikely to have a big impact on the human nutrition market.   

The 2017 fire reportedly sent vitamin A and vitamin E prices soaring as fewer supply alternatives for the affected ingredients were available at that time.

The market has changed in the meantime. According to the site All About Feed, bulk prices for vitamin A have fallen steadily since early 2021. Vitamin E prices fell, too, but then started trending back upward at the beginning of the year. The European-based site is currently on summer hiatus and won’t resume its weekly price updates until August 20. 

“I don’t think this will have much of an impact, if any, on the human supplement side,” said Scott Steinford, a principal at the consulting firm Trust Transparency Center and former CEO at a contract manufacturer. 

“I think there is ample capacity for these ingredients at the moment.” 

Steinford said many companies were carrying extra inventory of ingredients immediately after the trauma caused by the pandemic, but that practice has receded. Most companies are back to doing business as they had been pre-pandemic, at least in terms of their supply arrangements, added Steinford, who noted that “carrying costs are much higher than they used to be.” 

“Ingredients like this usually are not carried in large quantities over what’s needed immediately,” he said. 

There seems to be ample capacity of vitamins A and E in today’s market, according to Steve Hanson, a consultant and principal at the firm Nutrisocial.  

“What we would see is that Chinese suppliers would just pick up the shortfalls,” he explained. “They have the ability to ramp up their production pretty quickly.”