Who will be the next source of cosmetic raw material supply?

Recently, according to surging news reports, BASF, a global industrial leader, said on March 8 local time that an employee of the company's headquarters Ludwigshafen factory has been confirmed to be infected with new coronary pneumonia. The infected people and their close contacts Those (other BASF employees) have been isolated at home. As of press time, its official website has not yet announced that the company has plans to close the factory.

Europe is the upstream concentration of the global supply of cosmetic raw materials. Now that the European epidemic is in an emergency, how will it affect the entire industry?

European epidemic situation is urgent.

According to reports from China News Service, the epidemic has spread to more than 40 countries in Europe. Among them, the number of confirmed cases in Italy has exceeded 13,0000, making it the country with the worst epidemic outside China. In addition, the number of confirmed cases in Germany has also increased to 100,000; the number of confirmed cases in France and Spain has also exceeded 220,000, and there is a growing trend. The situation throughout Europe is not optimistic.

On the other hand, the United States announced that it will impose a 30-day travel ban on all European countries from the 13th to avoid importing cases and increase domestic risk in the United States. Undoubtedly further confirmed the severity of the European epidemic.

As a world chemical giant, BASF has more than 160 wholly-owned subsidiaries or joint ventures worldwide. According to the recently released financial report, BASF's 2019 sales were RMB456.2 billion.

In the cosmetics field, BASF's products mainly include surfactants, emulsifiers, polymers, emollients, active ingredients, pigments, and ultraviolet filters. BASF is also one of the leading suppliers of sunscreen in China.

Givaudan, a Swiss perfume and fragrance manufacturer, earlier closed a factory near Zurich after an employee was confirmed to be infected with the new coronavirus, and asked about 400 employees to work from home. Givaudan, as a world-renowned flavor and fragrance supplier, the shutdown of its factory will undoubtedly make the global beauty supply chain into a more difficult situation.

Is the opportunity for domestic raw material suppliers coming?

Although the epidemic in the United States is also very serious, the United States has always exported very few raw materials to the country, and the proportion is not large. Europe and Japan are the main importers of raw materials. If the European epidemic spreads, transportation will be the first to be affected.

"Europe to China shipping will be reduced by 50%, air transportation will also increase from 2.5 euros / kg to 4.5 euros / kg, and flights will be reduced by at least 80%, which will be a huge blow to raw material transportation."

At the same time, the impact of the entire epidemic on raw materials will mainly be due to logistics, which will lead to increased costs and extended delivery. Therefore, domestic raw material suppliers will be affected more seriously than international raw material suppliers. Production stoppage and lack of raw materials will lead to failure to deliver.

Due to the high air freight rates, in general, raw materials are imported by sea. If the epidemic in Europe deteriorates in the later period and shipping is regulated, the transportation costs will rise, and it will inevitably cause raw materials. Price increase.

A raw material supplier who did not wish to be named expressed concern about the next raw material market. He said that once the European epidemic spreads, these raw material giants have reached the point where they need to shut down and stop the factory, which will have a great impact on the downstream. The price increase and out of stock or delayed delivery will directly affect the factory production, and the risk of temporary replacement of raw material flavors It will be great.

He further said, "Since these foreign giants have more than one factory in China, if the factories in the epidemic area are shut down, a little inventory of domestic factories can only support half a month to a month; once the out-of-stock crisis occurs, logistics transportation is blocked, The blow to the downstream cannot be imagined. Of course, all this is related to the severity of the epidemic. "

Given the monopoly of the BASF Group in various raw material fields such as sunscreens, if the European epidemic worsens, will it affect the new product plans of domestic brands?

"Generally speaking, the raw materials of sunscreen products will be prepared half a year in advance. The raw materials of our group ’s sunscreen products have all been prepared from September to October last year, so this year ’s sunscreen products will not be affected by the European epidemic. Secondly, the BASF Group also No factory closures have occurred, and the brand has not been affected so far. "Cheng Yingqi, vice president of marketing at Huanya Group, thinks so.

Although the upstream epidemic situation will directly affect the supply and quotation of downstream raw material suppliers, many raw material suppliers said that this is also a valuable opportunity for raw material and flavor suppliers in non-epidemic areas or areas with good epidemic conditions, especially domestic Raw material supplier.

In order to seize opportunities, domestic raw material suppliers need to "harden themselves". "It may be an opportunity for domestic suppliers. Domestic active substances have emerged in recent years with many excellent and more original materials. And domestically, they are also beginning to do basic research on the effectiveness of raw materials. Some opportunities for businesses. 

But he also said that due to Japan's strong sense of crisis, it is now doing better in controlling the epidemic, and Japanese raw materials may also receive further development opportunities. "Everyone knows that Japan's cosmetic raw materials are very competitive, but because Japanese raw materials are expensive and the Japanese do not advertise, the market share is relatively low, but their strength is there. The competitive pressure of domestic raw material manufacturers is still Not small.