Context
A producer of biomethane and biogas operating multiple anaerobic digestion sites across the Po Valley in northern Italy — one of Europe's most concentrated areas of agricultural biogas infrastructure — injecting upgraded biomethane into the national grid under long-term offtake contracts with penalty clauses for non-delivery. A critical step in its gas upgrading is the abatement of hydrogen sulphide (H₂S) via a wet scrubbing process using dilute sulfuric acid (H₂SO₄); across its sites the company consumed several hundred tonnes of acid per year, procured on scheduled deliveries from a single primary supplier sourcing from a Gulf-region producer shipping by tanker through the Strait of Hormuz. In early 2025, escalating Persian Gulf tensions made Hormuz transits commercially uninsurable for chemical tanker operators; the supplier declared force majeure and suspended deliveries indefinitely. The client held roughly three weeks of working inventory — adequate for a short interruption, grossly inadequate for the disruption emerging — with no pre-qualified alternative, no visibility on European spot availability, and no experience navigating an acute chemical shortage. They contacted MAXAM within 48 hours of the force majeure notice.
Our Mission
Under an emergency brief: restore reliable sulfuric acid supply to the client's sites within a timeframe that would prevent any production interruption. The secondary mandate was to convert the crisis into a structural supply-chain redesign that would eliminate single-source dependency before the next disruption — whatever its cause — occurred.
Our Approach
Within the first 72 hours, MAXAM's chemicals sourcing team in Hong Kong and its European network mapped available sulfuric acid supply across the European market, targeting European producers — acid is produced as a byproduct of copper, zinc, and lead smelting at multiple sites across the continent, plus dedicated contact-process facilities — whose road and rail logistics were entirely unaffected by the Hormuz closure. Three European producers were identified with capacity and reach to northern Italy at compatible grades (93–98% H₂SO₄), two via two-to-four-day road freight and one by rail in a comparable window. Critically, MAXAM also located a Spanish industrial-chemical trader holding spot inventory in a Northern Italian bonded warehouse — an immediate bridge deliverable within 96 hours. MAXAM negotiated the purchase of that warehouse stock on the client's behalf, with road-tanker delivery to the two highest-volume sites within four days; the scarcity-premium price was far below the cost of a production halt and grid-injection penalties, and the bridge covered roughly five weeks of consumption. Concurrently MAXAM qualified and contracted two European producers within three weeks under a deliberately dual-source structure (a primary covering 60–65% of annual volume on a framework agreement, a secondary covering the remainder with scale-up flexibility), priced on a formula linked to published European benchmarks to remove discretionary-increase exposure. MAXAM then redesigned the site-level inventory protocol to an eight-week minimum safety stock — coordinating with two Italian equipment suppliers on the additional storage capacity required — and delivered a written structural supply-chain review of single-chokepoint exposure, the European cost-versus-resilience tradeoff, and remaining disruption scenarios, which became the basis of the client's updated procurement policy for critical chemical inputs.
Before & After Results
| Metric | Before | After |
|---|---|---|
| Production interruption | Shutdown risk within ~3 weeks | 0 (no downtime, no penalties) |
| Supply structure | Single-source Gulf | Dual-source European |
| Safety stock target | 3 weeks | 8 weeks |
| Acid unit cost | Gulf baseline | +18 to 22% (resilience premium) |
"The Hormuz crisis, unwelcome as it was, revealed a structural fragility in our chemical procurement that simply was not visible in normal operating conditions. The supply structure we rebuilt with MAXAM is more robust than anything we would have built incrementally without the forcing event."
Operations Director
Operations Director — Italian Biomethane Producer