Babies Beware: Diapers May Get Harder to Find

An explosion at a Japanese plant threatens the supply chain

   

The world’s supply of disposable diapers is tightening after an explosion at a key plant this weekend. The accident occurred at the Nippon Shokubai plant in Himeji, Japan, Saturday afternoon. While the fire was put out Saturday night, the impact may last quite a while.

Nippon Shokubai manufactures acrylic acid, which is used in the creation of a resin called SAP and is a component of disposable diapers. With the plant offline for an unknown amount of time and other plants operating and full capacity, a shortage is likely, reports Reuters.

The full impact will likely be felt at the checkout counter as diaper prices rise. The shortage of SAP resin will force manufacturers of diapers, such as Proctor & Gamble (NYSE:PG) and Kimberly Clark (NYSE:KMB), to hike prices in the face of increased cost.

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Article printed from InvestorPlace Media, http://investorplace.com/2012/10/babies-beware-diapers-may-get-harder-to-find/.

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