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UPDATE 1-Bayer in TDI force majeure after reactor outage

Tue Jul 7, 2009 10:39am EDT

* Output at Brunsbuettel TDI site reduced

* Site accounts for quarter of global TDI capacity

* Duration of force majeure unclear

(Adds details, background)

FRANKFURT, July 7 (Reuters) - Bayer BAYG.DE, the world's largest maker of padding and insulation foams, declared force majeure for the supply of a key chemical after a nuclear reactor shutdown in Germany choked production.

Bayer said on Tuesday that its production site for TDI, a substance that goes into furniture and car seat foams, in Brunsbuettel in northern Germany was damaged during a voltage drop caused by a rapid reactor shutdown at the Kruemmel nuclear power plant close to Hamburg on Saturday.

Production at the site, which accounts for more than a quarter of the company's global TDI capacity, was "substantially reduced" and it is yet unclear how long the problem will persist, the company added.

A force majeure declaration suspends a company's contractual liabilities for supply outages in the wake of an event that lies beyond its control.

Bayer's declaration covers European, Middle Eastern and African markets.

The Kruemmel power station, run by Vattenfall Europe [VATN.UL], failed to complete a restart for the second time over the weekend, following a two-year outage.

The voltage drop also caused some 1,500 traffic lights in Hamburg to stop working and industrial power consumers in the aluminium and steel industries were also affected. (Reporting by Ludwig Burger; Editing by Hans Peters)



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