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Food & Beverage

Distillers cash in on surging demand for hand sanitizer

Other manufacturers retool to produce surgical masks, ventilators

“It's just kind of a no brainer,” said Daniel Pacheco, co-founder of Cambodia's Samai distillery, which has switched from making rum to hand sanitizer. (Photo by Shaun Turton)

PHNOM PENH -- Cambodian craft distilleries are turning molasses and cassava into sought after hand sanitizer to help prop up business amid the coronavirus pandemic that has paralyzed the world economy.

Across Southeast Asia, other manufacturers are also retooling operations to produce in-demand products such as surgical masks and ventilators.

"It's just kind of a no brainer," said Daniel Pacheco, co-founder of the Samai rum distillery in the Cambodian capital Phnom Penh.

With alcohol sales at a standstill, Samai and another distiller Seekers Spirits, a gin producer, are scaling up production of alcohol-based sanitizer which is flying off the shelves across Cambodia as consumers try to protect themselves against the deadly virus.

The distillation process produces three types of alcohol, known in the industry as the heads, hearts and tails, said Pacheco. The heads, a light alcohol that emerges first that is often used to clean equipment, is now what's being turned into hand sanitizer, he said.

"The idea of this is to do something affordable. People are spiking up prices for stuff and it's ridiculous if you go to the market now and try to buy it," said Pacheco.

Marco Eggert, co-founder of Seekers, said the company had discussed with officials potential to help supply the government. "We balance what we can do to help the community and try to help us," he said.

Working closely together, the two distillers plan to donate a percentage of the profits to help fight the virus in Cambodia which has so far around 100 reported coronavirus infections.

Japanese giant Suntory Holdings has also announced that its U.S. subsidiary Beam Suntory will start producing hand sanitizer at its factory in Kentucky in response to a request from the Kentucky State Government.

The beverage group is also preparing to make alcohol available from its plants in Spain and Canada.

In China, Shenzhen-based electric car maker BYD Auto Co, has also produced over 300,000 bottles of disinfectant, and since February, the company backed by Warren Buffett, has been churning out five million surgical masks a day.

Hong Kong's Transport International Holdings has also said it will set up a mask manufacturing plant first for internal company use, with any surplus then handed over to local authorities.

In the Philippines the San Miguel conglomerate's gin factory is now producing 70% ethyl alcohol, which it said is being donated to hospitals in Metropolitan Manila.

Smartphone maker Oppo, the world's fifth largest smartphone maker, will also build its own surgical masks production line and now even could export them.

Apple supplier Foxconn has added a surgical mask production line at its plants in Shenzhen and New Taipei City to support the company's massive workforce.

Asia Pulp & Paper, one of the world's largest pulp and paper companies and part of Indonesia's Sinar Mas conglomerate, said it has ordered a machine from China to start producing surgical masks in one of its Indonesian facilities from next month, with an initial monthly production target of 1.8 million masks.

Sinar Mas Group managing director Gandi Sulistiyanto said APP's China branch has actually been producing surgical masks for a while, but this will be the first time the Indonesian facilities produce them too.

In India, the world's most populous country which is in the midst of the world's largest lockdown, Anand Mahindra, chairman of the Mahindra Group, which in addition to cars and aerospace components, also manufactures farm equipment, signalled last week that was also now looking at making ventilators.

India's central government is also pushing other automakers such Maruti Suzuki to add ventilators to its production lines at its currently idle factories.

In Cambodia, Samai's Pacheco said the biggest obstacle he was facing sourcing enough bottles in which to package hand sanitizer.

“We're struggling to find bottles,” Pacheco said, adding that many suppliers had been raising prices. “When you can find it it's like three times the price.” 

Additional reporting by Nana Shibata in Tokyo, Erwida Maulia in Jakarta, Kiran Sharma in New Delhi, Michelle Chan in Hong Kong, and Ting-Fang Cheng in Taipei.

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