More supply chain related information concerning the ongoing series of powerful earthquakes that began to impact the Emilia Romagna region of Northern Italy are starting to surface. Traditional media reports indicate that the death toll from both the May 20 and May 29 quakes has risen to at least 24 persons. More than 20,000 persons have been forced into temporary accommodations with additional shocks continuing, the latest being Sunday. Many fear returning to places of work since the latest deaths involve factory and warehouse workers crushed in falling buildings, and authorities remained concerned that continuing strong aftershocks will impact already weakened buildings and structures.

In terms of economic scope, Italian government spokespersons indicate that the impacted region accounts for one per cent of national GDP, and is a key region for producing biomedical supplies, ceramics and specialty cheeses.

A New York Times article reports (metered free view or paid subscription) that the biomedical district in Medolla and in nearby Mirandola, which has a concentration of 90 factories employing about 5000 workers, has “shut down”. This area produces disposable medical items along with equipment for transfusions and dialysis. The president of the sector’s trade association indicates that 80 of these factories have suffered some damage. Reuters reported yesterday that this biomedical business park “ranks number three in the world, behind U.S. parks in Los Angeles and Minneapolis.” Factories belonging to B-Braun, Covidien, Haemotronic, Gambro Desco and Sorin have been impacted. Suppliers to these factories may have also been impacted. An Italian business association and the EU Commissioner for Enterprise and Industry are now estimating damage in the area to be in excess of 5 billion euros ($6.1 billion).

Production in the premium cheese sector of this region continues on a sporadic basis, but continued reports of damage to cheese wheels stored in large storage warehouses have raised additional fears of economic impact. It was estimated that 600,000 wheels in several facilities were jolted off their shelves during this ongoing series of earthquakes. The Times article cites total loss to this sector to be as high as 40 million euros ($50 million).

The situation obviously remains very fluid and supply chain teams within the impacted industries should be continuing to establish communications with suppliers, vendors and distributors that have been impacted in this region.

Bob Ferrari