10 August 2009

Force Majeure Declaration - Update 2

As announced on 16 July 2009, INEOS ChlorVinyls is currently in Force Majeure with respect to supplies of VCM and S-PVC from several of our production plants across Europe.

By way of context, on the evening of 15 July a severe thunderstorm caused a major power failure at our Rafnes Site in Norway.  This was significant enough to cause our VCM plant to shut down, and has resulted in major problems restarting vital process equipment.

Due to the power failure and unexpected operating conditions that resulted we have had to take our VCM plant fully offline to remove process contaminants from the system.  During this work we have also discovered damage to the process equipment itself that must be repaired before production can resume.

We are using every resource available to us in order to rectify the situation.  However, our first attempt to restart the plant failed and we currently estimate that we will attempt to restart again week commencing 17th August.  Restarting the plant following an extended outage is a complex matter and may take some time to ensure that it is completed safely and that production is stable once the plant is operational.  We are hoping to resume normal VCM production as early as possible in advance of the planned maintenance shutdown in September.

In addition to the problems faced at Rafnes, we have also recently experienced problems at our VCM plant in Wilhelmshaven. This plant is currently running at reduced rates and as a result we have no choice but to continue the Force Majeure status until the issues are resolved and we can once again fulfill all orders. Our current view is that September supplies will also be affected.

We will therefore keep you informed through our regular communication channels and your Account Manager will brief you about the allocation consequences this has for your business.

Once we are in a position to lift the Force Majeure, we will issue a further communication.

We fully recognise the difficult situation this unforeseen event has caused, however please be assured we are working hard to restore normal output and thank you for bearing with us in the meantime.

ENDS

For further information please contact:

Geir Tuft
Business Manager VCM/PVC, INEOS ChlorVinyls
Phone: +47 22 53 24 82
Mobile: +47 915 18 114