'It’s been crazy' — Maker of ultra-cold freezers sees surge in demand to store Covid vaccines
- So-Low Environmental Equipment has seen a surge in demand for its ultra-cold freezers in anticipation of coronavirus vaccine distribution.
- "It's been crazy. It's absolutely been crazy," Dan Hensler, vice president for the company, told CNBC.
- Despite its efforts to ramp up inventory, "right now, we are out of everything," Hensler said.
So-Low Environmental Equipment, a maker of ultra-cold freezers, is seeing a surge in demand for its products in anticipation of coronavirus vaccine distribution, leading to an inventory backlog despite its efforts to prepare.
"Right now, we are out of everything," Dan Hensler, vice president of the Cincinnati-based company, said Wednesday on CNBC's "Squawk on the Street."
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Only Pfizer and its German partner BioNTech have filed for emergency use authorization with the U.S. Food and Drug Administration for their Covid-19 vaccine. But the potential for approval as soon as December has put the complex logistics of distributing a vaccine into sharp focus, with the U.S. government practicing trial runs of its delivery system in four states. Pfizer, which is handling the distribution of its vaccine, also has a pilot program underway.
In Texas, hospitals are making plans to potentially administer immunizations in less than three weeks. A key cog in the process of administering is storage, especially for the Pfizer-BioNTech vaccine, which requires a temperature of minus 94 degrees Fahrenheit, or minus 70 degrees Celsius. Moderna, which plans to soon apply for emergency use authorization with the FDA, can store its vaccine for up to six months at minus 4 Fahrenheit.
So-Low specializes in freezers that can meet those frigid temperatures and counts Pfizer as one of its customers. In the spring, as companies and governments alike pushed to accelerate vaccine development, Hensler said the family-owned company started to ramp up inventory capacity by ordering parts and raw materials.
"We had heard that the Pfizer was going to have to be stored at minus 70. We took it upon ourselves to say, 'Hey, listen, we've got to do something about this,'" he said. But its efforts to have ample supply on hand were no match for the demand that ensued after the Centers for Disease Control and Prevention released vaccine guidelines that included information on storage, he said. Every U.S. state has since submitted plans for storage and vaccine distribution to the CDC.
"Our phones started ringing off the hook the day it ... got out to the public. That inventory we had built was gone like in three weeks so now we're building everything per order," Hensler said. "We're running about six to eight weeks on delivery right now. It's been crazy. It's absolutely been crazy."
Employees of So-Low, which was founded in 1959, are working overtime, including Saturdays, to meet the demand, according to Hensler, who has been with the company almost 30 years. It has just over 50 employees.
"We're going to work Friday after Thanksgiving," Hensler said. The way the company sees it, he said, "The quicker we can get freezers out, the more people can get vaccinated and we can kind of get back to the old normal, rather than this new normal."