Babies Beware: Diapers May Get Harder to Find

by Nate Wooley | October 1, 2012 9:34 am

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[1].

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[2]) and Kimberly Clark (NYSE:KMB[3]), to hike prices in the face of increased cost.

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Endnotes:
  1. reports Reuters: http://www.reuters.com/article/2012/09/30/us-japan-fire-nipponshokubai-idUSBRE88T01Y20120930
  2. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  3. KMB: http://studio-5.financialcontent.com/investplace/quote?Symbol=KMB
  4. Staggering Sum Adele is Spending on Baby Nursery: http://investorplace.com/2012/07/staggering-sum-adele-is-spending-on-baby-nursery/
  5. Facebook Adds Feature for Expectant Parents: http://investorplace.com/2012/08/expecting-a-baby-dont-forget-to-announce-it-on-facebook/
  6. 6 Things to Know About Jessica Simpson Giving Birth: http://investorplace.com/2012/05/6-things-to-know-about-jessica-simpson-giving-birth/

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