China's mask boom takes raw materials away from nappy makers

Beijing

CHINA'S ramp-up of mask production to counter the coronavirus outbreak has claimed unlikely victims - nappies, wet wipes and sanitary towels that are made with the same raw materials.

Manufacturers say textiles such as non-woven fabric have been in short supply from being diverted to the more lucrative mask business, leaving producers of hygiene products high and dry.

Some firms have been forced to halve production or hike prices, with the industry expressing concern over the future of supply lines.

As the coronavirus pushed China into lockdown after it was first detected in the central city of Wuhan lastDecember, leaders embarked on a massive effort to produce enough masks for overwhelmed medical staff and the country's 1.4 billion people.

But with everyone from carmakers to garment factories switching to mask production to meet demand, the cost of raw materials spiked, with no quick end in sight as the pandemic continues to wreak havoc worldwide.

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"It's not that we lack the capacity for production, but the costs are extremely high," said Huang Tenglong, deputy general manager of diaper maker Fujian Time and Tianhe Industrial.

"In January, the raw material for our diapers cost around 13,000 yuan (S$2,590) per tonne, but at its peak it went up to 140,000 or 150,000 yuan", he said, referring to a period late last month as global demand for masks surged.

Lin Yanting, deputy general manager of another nappy-maker DaddyBaby, said the cost of non-woven fabric remains around 50,000-60,000 yuan per tonne. "A diaper uses more material than a mask but I will only turn a profit if I use (the fabric) for a mask," he said.

"In this environment, a lot of smaller producers cannot sustain. This affects people making sanitary pads, diapers, facial masks and other nonwoven fabric-based products."

Mr Huang's firm, which employs around 400 staff, has halved its nappy production, reduced the range of products it makes and increased the sale price by up to 20 per cent.

Some clients continue making purchases with fewer orders but more have paused completely, Mr Lin said.

"I definitely hope that the pandemic will be over soon. Although we can produce protective gear as well, (the situation) is actually damaging to the overall economic system," he said. "At the end of it, we may have lost our main business," he added, referring to hygiene products.

Shen Shengyuan, deputy general manager of nappy-maker New Yifa Group, said although his company has tried sourcing raw materials from abroad, air freight is a problem and a shipping time of over two weeks would be too long. He said New Yifa had been taking fewer new orders and was struggling to fulfil existing ones because of short supplies.

Mr Lin added that DaddyBaby is producing nappies at a loss now with the high costs, making up the shortfall with profits from its new mask production lines set up during the outbreak - an attempt to maintain stability in the market.

Mr Shen said he was "worried" about an impact on supplies outside China. He estimates that suppliers make 10 times more profit by putting raw materials to use in masks than nappies. AFP