C&EN: TODAY'S HEADLINES - IMPACT OF SARS

JEAN-FRANCOIS TREMBLAY

Although severe acute respiratory syndrome (SARS) has been brought under control in most countries, its continuous spread in China is affecting business.

DuPont, Rohm and Haas, and others say it's too early to predict the impact that SARS will have on business results. But many chemical companies are already feeling the pinch. Beijing Yanhua Petrochemical, a subsidiary of Sinopec that produces plastics, fibers, and rubber, says it is having difficulty shipping products by truck as a result of roadblocks on the way to its facilities near Beijing. In Japan, Idemitsu Petrochemical has reduced production of the fiber raw material p-xylene because of sluggish demand.
Some economists have cut expectations of China's overall economic growth this year from 8% to 6%. David H. Witte, a Singapore-based vice president with chemical industry consultants Chemical Market Associates Inc., says that, if the number of SARS cases continues to increase in China in the next few weeks, his firm will revise its global demand forecasts for chemicals.

SARS is affecting China's demand for chemicals in two ways, Witte says. First, it is precipitating a drop in Chinese consumer demand. For example, about 70% of the clothes and fabrics that China produces are purchased by local consumers. China imports large amounts of synthetic fiber and fiber intermediates such as p-xylene to supply its clothing industry.

Second, local and foreign companies in China are importing materials such as plastics to produce goods for export. The owner of an American toy company with factories in southern China tells C&EN that his biggest worry is that his plant workers might get infected with SARS, which would lead authorities to quarantine the workers and shut down the plant. Although a resident of Hong Kong, he has not been in Asia this year because customers now prefer to meet him in California.

By contrast, DuPont's personal protection business is enjoying a surge in sales as a result of the SARS outbreak. China has ordered 1 million units of the company's Tyvek-Pro Tech disposable suits, for about $3.00 each, to equip its health workers. The suits are made of flash-spun and heat-bonded polyethylene fiber.

In Hong Kong, the government and a newly formed charity have together ordered more than 200,000 of the protective suits. DuPont is meeting demand by marshaling its subcontractors and airlifting the suits from locations throughout the world.