Hurricane Maria knocks out Essentra in Puerto Rico
Essentra confirmed on Monday that its two health and personal care packaging sites in Puerto Rico had been disrupted as a result of the recent Hurricane Maria.
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The FTSE 250 company said that, while the facilities at Manati and Guaynabo had not sustained “significant” physical damage, they had not been operational since 19 September.
Since that time, Essentra said it focussed its efforts on ensuring the safety of its 345 employees in Puerto Rico, and providing both them and customers with “whatever practical support” it can during the “extremely challenging” conditions.
Notwithstanding that both sites were fundamentally intact, the board said there were “significant impediments” to resuming manufacturing activity, including the circumstances of employees, availability of power, ongoing disruption to general infrastructure and the extent to which customers themselves had been impacted.
As a result, Essentra said it was not currently possible to confirm the timing that normal output levels would be resumed, although it did say it was “unlikely” to be in the immediate future.
To the extent that the two facilities were not operational, the company said the financial impact was estimated to be in the range of £0.5m to £0.75m per week - a significant part of which was expected ultimately to be recovered through the company's comprehensive insurance policies.
Having already experienced some minor disruption from Hurricanes Harvey and Irma to its sites in Houston, Largo and Puerto Rico, Essentra estimated that the profit impact from those previous storms, ie, pre-Maria, to be in the range of £0.5m - 1.0m.
“Our experienced local team was very well prepared for the hurricane strike, and - supported by colleagues from the wider health and personal care packaging Americas business - has done an excellent job of managing events to date, thanks to their tireless efforts and commitment,” said chief executive Paul Forman.
“With communications in Puerto Rico remaining sporadic, our ongoing priority is confirming the safety of all our employees and on providing them with whatever assistance we can, including the shipment of emergency provisions as soon as ports and the airport reopen.”
Forman said the company was also in “regular dialogue” with its customers, most of whom are in a similar position regarding the status of their own operations and workforce, and had already implemented business continuity plans to transfer orders to Essentra facilities in mainland United States and beyond.
“Given the exceptional nature of Hurricane Maria and the current level of uncertainty regarding its ongoing impact, the company is clearly continuing to closely monitor the situation in Puerto Rico and will provide an update in our next trading statement, or when we have greater clarity if earlier.”