Toilet Paper Warehouse in California Destroyed by Fire; Employee Arrested

A Kimberly-Clark Corp. employee has been arrested on arson charges after a massive fire broke out Tuesday morning at a California distribution center that serves around 50 million people.

The facility — located in Ontario, California, about 35 miles outside of Los Angeles — houses facial tissue and toilet paper, according to a local Fox report. The 1.2 million-square-foot facility suffered extensive damage, including a partial roof collapse, the report said.

Photos from the scene showed the entire building engulfed in flames.

Kimberly-Clark said in a statement to Bloomberg News that there were no reported injuries. The company’s shares fell 4.1% on Tuesday.

Ontario Deputy Fire Chief Mike Wedell confirmed that a male employee of the paper company has been detained.

“This fire was suspicious in nature from the initial stages,” he said.

The blaze “risks West Coast supply shortages for more than 3% of sales” at Kimberly-Clark’s US business and could raise transportation costs, according to a note from Diana Gomes, a Bloomberg Intelligence senior industry analyst.

Piper Sandler analyst Michael Lavery wrote in a note to clients that the level of disruption is “difficult to gauge” at this point, but warehouses and mixing centers in the area frequently supply products to large markets in Northern California, Arizona and Nevada.

He isn’t planning to update his financial projections for the company “without better visibility on the magnitude and duration of the impact of any potential disruptions.”

Kimberly-Clark, which sells the Huggies diaper and Kleenex tissue brands, has agreed to buy Tylenol maker Kenvue Inc.

The Ontario Fire Department will hold a press conference at 5 p.m. in California.