Arkema Group SA (ARKAY) shares fell sharply in Paris Thursday after the company confirmed an explosion at a chemical factory outside of the city of Houston that has led to a local evacuation.

Local media have reported explosions and black smoke at the in Crosby, Texas plant, which manufactures, among other products, organic peroxide, in the early hours of Thursday morning. The plant had been damaged by the high winds and flooding associated with Tropical Storm Harvey.

"At approximately 2 a.m. CDT, we were notified by the Harris County Emergency Operations Center (EOC) of two explosions and black smoke coming from the Arkema Inc. plant in Crosby, Texas," the company said in a statement. "Local officials had previously established an evacuation zone in an area 1.5 miles from our plant, based on their assessment of the situation.

"As we communicated in recent days, our site followed its hurricane preparation plan in advance of the recent hurricane and we had redundant contingency plans in place," the company added. "However, unprecedented flooding overwhelmed our primary power and two sources of emergency backup power. As a result, we lost critical refrigeration of the products on site. Some of our organic peroxides products burn if not stored at low temperature."

Arkema shares were marked 2.22% lower in Paris trading, after falling more than 1.5% following reports of the Crobsy blast, to change hands at a three-month low of €91.02 each. 

#Arkema explosion was anticipated. Area already evac'd to 1.5 mile radius already. Waiting for updates from Arkema Co on plume, via @KHOU pic.twitter.com/xfKJrvGlG0

— Christina Consolo (@RadChick4Cast) August 31, 2017

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