Customers grabbing their toilet paper supply at a supermarket in Hong Kong, on Friday, February 14, 2020. Photo: AP
Johann Christoph Michalski, the chief executive of Vinda International Holdings, was incredulous when word started spreading on social media in early February that toilet paper was about to run out in Hong Kong.
Within days, supermarket shelves across the city would stand empty as long queues of shoppers made
in the misguided belief that a coronavirus outbreak in mainland China would disrupt supplies. The self-fulfilling prophecy soon found its way around the world, with similar reports of panic shopping for toilet rolls, tissue paper
.
in the misguided belief that a coronavirus outbreak in mainland China would disrupt supplies. The self-fulfilling prophecy soon found its way around the world, with similar reports of panic shopping for toilet rolls, tissue paper
.
“There are no supply shortages in Hong Kong or in China,” Michalski said in an interview with South China Morning Post, adding that people should not believe everything they read on social media.
Whatever shortage reported at the shops were “actually created by panic buying, rather than the ability of the industry to provide products,” he said. “Panic buying is very disruptive to our logistics, customers and manufacturing.”
The panic hoarding of toilet paper added to the rush for surgical masks, rubber gloves, disinfectants, and other daily necessities, going some ways to explain why Vinda’s shares soared 48 per cent this year on the Hong Kong stock exchange, outperforming the 7.2 per cent decline on the benchmark Hang Seng Index. Vinda’s shares closed Friday at HK$21, for a weekly gain of 4.7 per cent.
As Vinda resumes output next week in Hubei on the last of its 12 production queues in mainland China, the company is back on track to churn out 1.3 million tonnes of paper this year, Michalski said.
China is the world’s largest exporter of toilet paper. The country ships US$2.8 billion worth of rolls each year, making up 12 per cent of the global toilet paper export market, according to data from the Observatory of Economic Complexity, a US-based trade monitor.
China’s logistics network is gradually getting back on track, and the company has also stockpiled wood pulp for three to four months’ use ahead of the Lunar New Year holiday, which has shielded it from any shortage of key raw material.
“We still expect our profitability to increase for 2020 compared to 2019, and expect to grow in a significant way,” Michalski said.
Ironically, shipment to Hong Kong may slow in the coming months, because households are probably overstocked with toilet paper, he said, adding that Vinda spent a week transferring products from the neighbouring Guangdong province to the city.
“Our supply chain is made for regular replenishment and we can cope quite easily with surges like 10 per cent or 15 per cent … but when you have surges like in Hong Kong across the board and across [product types], it’s very difficult for our supply chain to follow.”
by Yujing Liu
http://www.thisoldtoilet.com
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