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* MAY 22, 2009, 8:36 A.M. ET
Japan's Mask Supply Falters as Flu and Fear Spread
By JURO OSAWA
TOKYO -- Japanese makers of surgical masks say that despite boosting production amid the spread of A/H1N1 influenza, they can't keep up with demand from consumers hyper-sensitized to hygiene issues.
"We are receiving inquiries from municipal governments all over Japan, informing us of a mask shortage," said Ryosuke Ikemi, managing director at the Japan Hygiene Products Industry Association, an industry organization.
Japan had confirmed 289 cases of A/H1N1 flu as of Friday afternoon, according to the health ministry. Of that total, 285 were in western Japan, where the country's first domestic infection was confirmed just a week ago. Tokyo found its first case of the flu Wednesday and now has three confirmed cases.
The World Health Organization has said that for people who aren't infected, certain other measures may be more important than wearing a mask. These include refraining from touching mouth and nose, frequently washing hands and avoiding crowded settings, among others. "In the community, however, the benefits of wearing masks has not been established, especially in open areas, as opposed to enclosed spaces while in close contact with a person with influenza-like symptoms," the WHO wrote in a report issued this month.
Surgical masks are a relatively common sight in Japan's densely-populated cities, where commuters and office workers spend their days in masks during winter months and the hay-fever season in February and March.
May is usually a quiet month for mask makers and sellers. But at Matsumotokiyoshi Holdings Co., Japan's biggest drugstore chain, sales are up 50 times the usual figure for this time of the year. A spokesman said that although the retailer had built a system for stockpiling masks since the bird flu outbreak in recent years, it is struggling to catch up with sharp demand growth this month.
Seijo Corp., which operates 276 drugstores mainly in Tokyo and the surrounding Kanto region, said mask sales for this month so far are up to 10 times the company's usual May figures. Since early May, the store has limited purchases to two packages per customer, but that didn't prevent them from flying off the shelves, said an employee at a Seijo store in central Tokyo. "We are not sure when we can get masks next."
According to the Japan Hygiene Products Industry Association, the production boost doesn't immediately translate into increased supply, because it can take up to 10 days for masks produced at Chinese factories to arrive, clear customs and reach retailers. Given the time lag, the current mask shortage may continue through May, the association said.
At mask maker Uni-Charm Corp., which produces all its masks in Japan, factories are operating around the clock. "We are doing the best we can with our existing facilities," a spokeswoman said. Following the flu outbreak in Mexico and the U.S. last month, the company immediately raised production back to full capacity. "Demand suddenly went from the minimum to the maximum," the spokeswoman said.
Kowa Co., Uni-Charm's rival, is also producing at full capacity, seven days a week. The company said demand jumped in April when cases were first reported overseas, then stabilized briefly, but expanded again sharply when domestic cases were confirmed this month.
It is unclear whether and how much the flu-related demand will affect the companies' earnings. According to Uni-Charm's estimate, Japan's mask market is valued at 30 billion yen ($318.1 million). Uni-Charm and Kowa are the top makers, each holding a market share of around 20%, the companies said.
Since Uni-Charm makes many other products, such as diapers and household paper products, masks alone may not boost earnings much, the company said. "So far we expect a minor boost," a spokeswoman said.
At Kowa, masks account for only several percent of its total revenue.
But Japanese investors have been quick to focus on the flu as a trading theme: Shares in makers of masks and drugs that could help restrict the spread of the virus have outperformed the benchmark index in recent weeks.
Uni-Charm shares have gained 8% since April 27, following the flu outbreak. Chugai Pharmaceutical Co., which sells flu remedy Tamiflu in Japan, has jumped 10% over the same period. The Nikkei 225 Stock Average, meanwhile, added 5.9%.
Write to Juro Osawa at juro.osawa@dowjones.com
* MAY 22, 2009, 8:36 A.M. ET
Japan's Mask Supply Falters as Flu and Fear Spread
By JURO OSAWA
TOKYO -- Japanese makers of surgical masks say that despite boosting production amid the spread of A/H1N1 influenza, they can't keep up with demand from consumers hyper-sensitized to hygiene issues.
"We are receiving inquiries from municipal governments all over Japan, informing us of a mask shortage," said Ryosuke Ikemi, managing director at the Japan Hygiene Products Industry Association, an industry organization.
Japan had confirmed 289 cases of A/H1N1 flu as of Friday afternoon, according to the health ministry. Of that total, 285 were in western Japan, where the country's first domestic infection was confirmed just a week ago. Tokyo found its first case of the flu Wednesday and now has three confirmed cases.
The World Health Organization has said that for people who aren't infected, certain other measures may be more important than wearing a mask. These include refraining from touching mouth and nose, frequently washing hands and avoiding crowded settings, among others. "In the community, however, the benefits of wearing masks has not been established, especially in open areas, as opposed to enclosed spaces while in close contact with a person with influenza-like symptoms," the WHO wrote in a report issued this month.
Surgical masks are a relatively common sight in Japan's densely-populated cities, where commuters and office workers spend their days in masks during winter months and the hay-fever season in February and March.
May is usually a quiet month for mask makers and sellers. But at Matsumotokiyoshi Holdings Co., Japan's biggest drugstore chain, sales are up 50 times the usual figure for this time of the year. A spokesman said that although the retailer had built a system for stockpiling masks since the bird flu outbreak in recent years, it is struggling to catch up with sharp demand growth this month.
Seijo Corp., which operates 276 drugstores mainly in Tokyo and the surrounding Kanto region, said mask sales for this month so far are up to 10 times the company's usual May figures. Since early May, the store has limited purchases to two packages per customer, but that didn't prevent them from flying off the shelves, said an employee at a Seijo store in central Tokyo. "We are not sure when we can get masks next."
According to the Japan Hygiene Products Industry Association, the production boost doesn't immediately translate into increased supply, because it can take up to 10 days for masks produced at Chinese factories to arrive, clear customs and reach retailers. Given the time lag, the current mask shortage may continue through May, the association said.
At mask maker Uni-Charm Corp., which produces all its masks in Japan, factories are operating around the clock. "We are doing the best we can with our existing facilities," a spokeswoman said. Following the flu outbreak in Mexico and the U.S. last month, the company immediately raised production back to full capacity. "Demand suddenly went from the minimum to the maximum," the spokeswoman said.
Kowa Co., Uni-Charm's rival, is also producing at full capacity, seven days a week. The company said demand jumped in April when cases were first reported overseas, then stabilized briefly, but expanded again sharply when domestic cases were confirmed this month.
It is unclear whether and how much the flu-related demand will affect the companies' earnings. According to Uni-Charm's estimate, Japan's mask market is valued at 30 billion yen ($318.1 million). Uni-Charm and Kowa are the top makers, each holding a market share of around 20%, the companies said.
Since Uni-Charm makes many other products, such as diapers and household paper products, masks alone may not boost earnings much, the company said. "So far we expect a minor boost," a spokeswoman said.
At Kowa, masks account for only several percent of its total revenue.
But Japanese investors have been quick to focus on the flu as a trading theme: Shares in makers of masks and drugs that could help restrict the spread of the virus have outperformed the benchmark index in recent weeks.
Uni-Charm shares have gained 8% since April 27, following the flu outbreak. Chugai Pharmaceutical Co., which sells flu remedy Tamiflu in Japan, has jumped 10% over the same period. The Nikkei 225 Stock Average, meanwhile, added 5.9%.
Write to Juro Osawa at juro.osawa@dowjones.com