Domestic producers may benefit from cosmetics raw material shortage driven by sanitizer production amid pandemic: insider
Published: Apr 17, 2020 01:05 AM

A cosmetics counter in a store in Sanmenxia, Central China’s Henan Province. File Photo: VCG

The novel coronavirus (COVID-19) pandemic has led to surging demand for hand sanitizer, which makes cosmetics producers compete for carbomer, the raw material necessary to make both the disinfectant and cosmetics. 

Earlier reports said that international cosmetics companies, such as L'oreal Paris, Estee Lauder, and LVMH created or transformed production lines to produce disinfectants, which has put carbomer, a thickener used for lotion, shampoo, and toothpaste in short supply. 

Since major carbomer providers are overseas, business insiders speculated the shortage would affect business for China's domestic cosmetics companies. 

Ying Song, China regional sales manager of Lubrizol, a major carbomer producer, said carbomer demand had jumped due to increased demands for alcohol gels. 

Chinese producers who make similar carbomer products found in hand sanitizers are also suffering from the situation that supply falls short of demand, Ying explained.

A Chinese agent with Lubrizol's carbomer products surnamed Fu told the Global Times that monthly demand has increased 10 times since February compared with the same period in previous years. Although cosmetics companies' demand for carbomer did not change much, surging demand from hand sanitizer manufacturers has caused supply shortages for cosmetics companies. 

Liu Ruixue, general manager of Guangzhou Bawei Corporation, admitted that carbomer prices have increased considerably due to shortages. Prices of carbomer of certain categories have risen 20 to 30 percent, while others have grown higher. 

However, Ying said his company is at full capacity and has yet to halt production during the pandemic. "We never made any adjustments to the pricing despite the shortage," Ying added. 

Fu noted the cause of the surging prices for imported carbomer is due to transportation fees. 

According to Fu, shipping times are longer when transporting by sea due to the pandemic, so clients have requested air shipments. "Thus, transportation fees increase by 70 yuan per kilogram by air," Fu said. 

But Fu doesn't think the price increases will affect the domestic cosmetics industry. Although carbomer is a necessary raw material for many cosmetics, the amount of carbomer needed in the cosmetics is so little that it can be negligible. 

Many business insiders don't think the pandemic could magnify the weakness of China's cosmetics industry or lead to an industry reshuffle. 

Peng Guanjie, R&D manager of Teelar Bioltech based in Guangzhou told the Global Times that the quality of domestic-produced raw materials for cosmetics is quite good. 

"We lag behind in cutting-edge research [in the industry]. However, in regard to domestically produced mature raw materials like carbomer, we have done quite well," said Peng, who thinks the pandemic could accelerate the acceptance of domestic raw materials by domestic cosmetics manufacturers. 

His opinion was echoed by Fu, who thinks domestic cosmetics companies, which used to prefer imported raw materials, may choose domestic providers instead amid the pandemic due to cost concerns.

But Ying felt that the pandemic has had a negative influence on domestic cosmetics companies and thinks make-up and skincare manufacturers will be affected since he anticipated the decrease in income of the consumers. 

"Statistics revealed that the supply dropped in the first quarter. Of course, it may be because people did not resume work. So, we still need to observe," Ying said.