A deadly explosion at a chemical plant in China has created shortages of certain key chemicals purchased by Western firms. It has also prompted a call for those firms to reconsider sourcing policies that allowed them to purchase from a company that was clearly out of compliance with local safety and environmental laws.
The March 21 explosion at Jiangsu Tianjiayi Chemical, in the city of Yancheng in China’s Jiangsu Province, killed 78 people and injured more than 600. After the explosion, local officials closed all operations in the industrial park where the plant was located to assess safety conditions.
Customers started to feel the effects of the explosion soon thereafter. In its April 18 earnings report, the Swiss chemical maker Lonza said the explosion and other Chinese supply-chain disruptions were creating raw material sourcing challenges for its specialty ingredient business.
And the British Coatings Federation recently warned members that the closure of factories in the industrial park has caused “severe shortages” of ingredients such as preservatives for waterborne paints, photoinitiators for ultraviolet light–cured inks, and certain red and yellow pigments.
After the accident, China’s State Council said local authorities were lax in enforcing safety regulations at the facility. But in a new report, the Institute of Public & Environmental Affairs (IPE), a Beijing-based environmental research group, charges that Western companies also perpetuate dangerous conditions at Tianjiayi and other Chinese chemical companies by purchasing from them in spite of documented safety and environmental shortcomings.
Tianjiayi was on record with multiple serious safety and environmental violations, the report says, such as the lack of an emergency shutoff on a benzene tank.
In addition to Lonza, the IPE identified BASF, Clariant, DuPont, and Merck KGaA as likely buyers of chemicals from Tianjiayi. The group criticized them for staying silent about how they might help avert such accidents.
Tracking supply chains is difficult, the report acknowledges, and companies often use vague language to describe their relationships with suppliers.
In the case of DuPont, the IPE published data from a trade-tracking service showing roughly 50 shipments of m-phenylenediamine from Tianjiayi to DuPont between 2014 and 2019. Yet DuPont told the IPE that Tianjiayi is not a supplier, and DuPont spokesperson Megan Morris reaffirmed to C&EN that Tianjiayi “is not a primary ingredient supplier of DuPont.”
Clariant told the IPE that Tianjiayi was not a “direct supplier,” adding that “the indirect business impact is under estimation.” Clariant did not respond to C&EN’s request for clarification. The IPE credited Merck with the most constructive response, in which it acknowledged that Tianjiayi is a “tier 2” supplier through a Spanish trading firm.