Friday, January 6, 2017

Local Company Claims Chinese Hackers Cause of Bankruptcy

New Orleans, LA

Today Isaac B (IB) Kaghun announced that the bankruptcy proceedings completed today meant that the Blew Bayou Chemical Company was not going to re-open its doors. IB reported that Chinese hackers were responsible for the high-rework rate over the last six months that destroyed the profitability of the company. He claimed that hackers supporting Tianjin Chemical, his only competitor in the production of Tetramethyldeath (TMD), the revolutionary plasticizer being used as a replacement for BPA.

IB Kaghun, the son of Russian emigres, developed TMD during his graduate studies at LSU. TMD is a monomer that can be added to the polymerization of PVC and other plastics to provide both increased flexibility and strength to those plastics. Tianjin Chemical started production of the chemical after a well-publicized hack of Blew Bayou Chemical computers stole proprietary information about the production of the material. The FBI was never able to find prove that Tianjin Chemical had anything to do with the data theft.

Blew Bayou had been successfully manufacturing TMD for about ten years with multiple expansions of their facility east of New Orleans. Last spring the company started to experience manufacturing problems that resulted in high contamination rates in their product that made the TMD unusable. The costs associated with the lost production and disposal of the flammable chemical quickly ate into the bottom line of Blew Bayou Chemical.

Recent disclosures about vulnerabilities in the Robotron programmable logic controllers (PLC) raised the possibility that a hack of those devices being used in the Blew Bayou manufacturing facility raised the possibility of that being the cause of the manufacturing problems at the plant. IB contacted the Electronic Control System CERT for assistance to determine if a cyber attack had taken place.

Immanuel C. Securitage, a spokesman for ECS-CERT, confirmed that the agency had completed an on-site investigation and did find unauthorized modifications to the programming of some of the PLCs used in the manufacturing process.

“This was a very sophisticated attack,” Securitage said. “There is a critical temperature that must be maintained in the manufacturing process. Any temperature above that critical point causes an increase in the production of undesirable byproducts. The programing of the PLC was modified to change the temperature being reported by two separate temperature probes so that they reported lower temperatures than was actually being experienced in the reaction vessel.”

Kaghun added that whoever was responsible for the hack had very detailed knowledge of the manufacturing process. The revised PLC programming used a complex algorithm so that the rate of change of the reported temperature increased as the temperature approached the critical point. The reported temperature changes then slowly decreased back to actual temperatures above the critical temperature. This was important because at about 15 degrees above the critical point the pressure would have started to rise in the vessel, alerting operators to problems with the reaction.

UPDATE

Houston, TX

Rumors have been confirmed that as part of the bankruptcy settlement, IB Kaghun is providing the details about the manufacturing process for TMD to one of his suppliers, a major chemical company outside of Houston. This is being used in lieu of cash payment for the debts to that company. There are no plans to re-open the facility in Louisiana, according to industry sources.


There are also rumors that the Federal government is considering sanctions against Tianjin Chemical for their alleged part in the hacking of Blew Bayou Chemical.