Chemical companies across the globe have ramped up efforts to combat the coronavirus pandemic that continues to spread with no signs of abating. The global chemical industry is scaling up the supply of essential products – from raw materials for hand sanitizers to personal protective equipment (PPE) materials – in response to this health predicament.
Demand for Health & Safety Products at a Fever Pitch
With the number of coronavirus cases around the world continuing to climb, demand for preventive products has skyrocketed. Critical items such as hand sanitizers, masks and gloves are flying off the shelves as people continue to stock up amid the worsening scenario.
Medical, health and safety products are currently in short supply amid the pandemic that has so far claimed more than 42,000 lives and infected more than 850,000 people globally. Notably, outbreak in the United States, Italy, Spain, Germany and France has worsened over the past several days. It has rattled global stock markets on concerns over broader economic impacts.
Dr. Maria Van Kerkhove, an infectious disease epidemiologist with the World Health Organization (WHO), recently said that the world is facing a significant shortage of PPE including masks, respirators, gloves, gowns and face shields for frontline health workers.
The WHO, last month, had called on manufacturers to increase production of PPE by 40% to meet the rising global demand. The WHO is concerned that limited access to PPE supplies has left frontline workers “dangerously ill-equipped” to care for COVID-19 patients. It has urged governments to provide incentives to the industry for ramping up production of PPE and other medical supplies.
While demand for PPE first spiked in China, where the outbreak originated, it rapidly surged across the world to an unprecedented level with the spread of the lethal virus.
Chemical Industry Playing a Critical Role
The chemical industry is playing an important role in these testing times. The industry provides the basic raw materials to the producers of health, hygiene and safety products such as PPE, sanitizers, disinfectants and other cleaning products.
For instance, the industry supplies two active ingredients for hand sanitizers – ethanol (ethyl alcohol) and isopropanol (isopropyl alcohol). According to the Centers for Disease and Control Prevention (CDC), a hand sanitizer with an alcohol concentration between 60-95% is more effective in killing germs.
The chemical industry also provides polypropylene, a polymer used to make PPE, as well as plastic products such as polyethylene that help prevent contamination of food, personal care and medical products. Moreover, it supplies polymethyl methacrylate and polycarbonate for making protective screens that are being installed across supermarkets globally in a bid to safeguard their checkout staff from the virus. A wide range of chemicals are also used to make medicines.
The American Chemistry Council (ACC), a leading chemical industry trade group, last month said that the U.S. Department of Homeland Security (DHS) has identified the U.S. chemical industry as “Essential Critical Infrastructure,” an industry sector critical to public health and safety, economic and national security.
Chemical Makers Crank Up Supplies to Meet Demand
A number of chemical companies are ramping up production to address the surging demand for health, hygiene and safety products. Some of them are even adjusting their production to make finished products including hand sanitizers.
Dow Inc. DOW recently said that it is expanding production of hand sanitizers at additional sites in North America, Europe and Latin America. These sites join the company’s site in Stade, Germany, which is already producing hand sanitizers. The company expects these sites to produce more than 200 metric tons (equivalent to more than 880,000 eight-ounce bottles) of hand sanitizers. Dow, which does not typically make hand sanitizers, has taken this initiative to address the shortage of these essential products.
DuPont de Nemours, Inc. DD is also stepping up efforts to help protect the frontline fighters. The company’s manufacturing facilities are working round the clock to boost capacity of protective garments amid soaring demand. DuPont’s Spruance manufacturing plant is boosting the production of Tyvek, a material (made from high-density polyethylene) which is used to make protective garments that shield frontline medical personnel from contracting the virus. Notably, the company is ramping up the production of Tyvek hazmat suits, a product critical to protecting U.S. doctors and nurses.
Meanwhile, Eastman Chemical Company EMN is expediting the production of a material required to produce protective face shields for medical personnel battling the outbreak. The company is supplying PETG film, a copolyester, to support the production of face shields. It is also providing resins to customers that are making hand sanitizers.
Huntsman Corporation HUN has also scaled up the production of chemical products needed for making surgical face masks and protective suits. The company is also making hand sanitizers for hospitals and pharmacies in Switzerland that are facing increasing shortages and constrained supply due to the pandemic. It has also provided methylene diphenyl diisocyanate (MDI) and other essential materials to help China combat the outbreak.
Moreover, Arkema S.A. ARKAY has repurposed a production line to manufacture alcohol-based solution for distribution to hospitals in France. The solutions are being supplied to the French health authorities and will be earmarked for the mass restocking of public hospitals.
Chemical giant, BASF SE BASFY is also taking steps to make hand sanitizers at its Ludwigshafen, Germany, site in an effort to ease the supply constraints. The company has reallocated several metric tons of raw materials, especially isopropanol, for the production of hand sanitizers. It has been producing certain raw materials at the Ludwigshafen site that are required to make disinfectant products.
DuPont, Eastman Chemical, BASF and Arkema have a Zacks Rank #4 (Sell), while both Dow and Huntsman carry a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Click to get this free report DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report Dow Inc. (DOW) : Free Stock Analysis Report Arkema SA (ARKAY) : Free Stock Analysis Report Huntsman Corporation (HUN) : Free Stock Analysis Report Eastman Chemical Company (EMN) : Free Stock Analysis Report BASF SE (BASFY) : Free Stock Analysis Report To read this article on Zacks.com click here.