BUSINESS Chinese face mask makers to meet global demand as COVID-19 spreads overseas

BUSINESS

Chinese face mask makers to meet global demand as COVID-19 spreads overseas

CGTN

04:48, March 25, 2020

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(Photo: CGTN)

Recent days have witnessed a surging demand for face masks overseas as the spread of COVID-19 escalates globally, so it's time for China, the manufacturing hub of the world, to help bridge the manufacturing gap in the battle against the pandemic.

The World Health Organization earlier this month called for a 40-percent-increase in manufacturing for countries all over the globe as it estimates that the world needs 89 million medical masks each month for medical workers fighting on the frontlines.

China made half the world's masks before the coronavirus outbreak, and its production capacity skyrocketed to nearly 12-fold as the outbreak pushed it to scale up production. China's daily output of face masks reached 100 million units and that of medical masks N95 reached 1.6 million units, said the Ministry of Industry and Information Technology on March 6.

Some Chinese face mask makers said they have received a large number of overseas orders for face masks and they are trying to lend a hand by resuming the overseas business after domestic demands are fully met.

China Meheco Group, for example, one of China's largest medical groups, received an emergency order of eight million medical masks from the Italian government on March 19, and managed to arrange one million masks within 24 hours. 

The company has got the first batch ready, and the containers will be on their way to Italy as soon as the Italian government's plane arrives in Beijing, Wu Hao, export project leader of China Meheco International, told CGTN.

The government order is very last minute, but the company managed to finish supplier selection, purchase, transfer and collection within limited time to help ease the current situation, said Wu.

The company purchased a large amount of medical supplies from foreign companies, including Italian medical companies when situation was serious in China, and now it's time to return the favor, said Gao Yuwen, chairman of the group.

Another face mask maker Lanhine Medical said it is flooded with overseas orders from Europe and Japan, putting pressure on its production. So it had to turn down some of the new orders.

"We have adjusted our production line as demand from overseas is soaring. We give priority to domestic orders and try to shift some spare capacity and new capacity to overseas markets", Cao Jun, general manager of Lanhine Medical, told CGTN.

Lanhine Medical can produce one million face masks per day, five times more than at the early stage of the coronavirus outbreak.

As for concerns on overcapacity of face masks given the domestic situation has turned for the better and the demand for face masks may gradually ease, Cao said the demand for surgical masks is still high.

"Manufacturers for one-time-use non-woven masks and one-time-use medical masks may face the the problem of excess capacity, but that would not be the case for surgical masks because the demand for surgical masks is still high," said Cao.

Application for the production license for surgical masks is difficult and time-consuming, and manufacturers that can produce surgical masks are not many in China even though the production line of normal face masks has greatly increased during the epidemic period, Cao added.

Meanwhile, Masterwork, a mask equipment producer, said it has received an emergency order of mask equipment from Malaysia on March 18, which is the first overseas order since the company increased the production. The company said it is speeding up production to try to ship the equipment by air before the end of March.

In addition, the supply of raw materials for surgical face masks is also on urgent demand, especially melt-blown fabric, the core material used as the filter layer in the middle of the surgical masks.

TEDA Filters, a filtration material manufacturers, has gradually resumed its overseas supply as customers abroad are in desperate need of raw material for masks.

The company has begun to export melt-blown fabric by two to three tons a week starting from March 16, Xu Hao, vice president of TEDA Filters, told CGTN.

Xu said the company has increased the production capacity of melt-blown fabric to 10 tons per day in response to the surging market demand and meet the requirement of the country's coronavirus prevention and control authority.

Normally, the company exports 30 percent of its melt-blown fabric for face masks, but the business has been reduced since the outbreak in China.

"We've got lots of inquiries from our customers overseas, from the Europe, the Southeast Asia as well as the United States, but we need to meet the domestic demand first, so we didn't reach out in a large scale and those customers also understand the situation," said Xu.

Challenges for manufacturers: Certificate, rising cost, and lack of platform

Certificate is indeed a headache for some face-mask makers to shift the emergency gears overseas as different countries and regions have different standards.

Many EU countries, like Italy, has different standards for medical supplied in China. Meheco Group said the one million masks leaving Beijing for Italy are the FFP2 masks, not the model regularly used by Chinese hospitals, so extra effort in purchase is needed.

A face-mask factory in Beijing had shipped around 10,000 masks to South Korea by far as the factory started to have excess capacity after the domestic situation got better, and it has got the standard required by the South Korean government for mask import, according to its vice president Wang Yu.

However, shipping masks to the U.S. and Europe, in comparison, is much more difficult because the certificate is hard to apply, said Wang.

Another challenge for factories to export products overseas is the soaring price of raw materials. Data show that the price of melt-blown fabric increased more than 15 times after the coronavirus outbreak, from 20,000 per ton to about 350,000 per ton.

The same problem goes with the surging raw material price of infrared temp guns, an device to measure body temperature. A factory in Shandong Province churns out around 20,000 infrared temp guns per day. The factory owner said that the cost of the equipment has increased by 10 times, from 20 yuan to 200 yuan.

"Many complained that the price rise is too steep, but there is nothing we can do. The price of raw materials like sensors, MCU and plastic cases all increased sharply by 10 to 20 times respectively," the owner said.

Company also needs to face higher transportation charges as some companies have to ship their products by air.

TEDA Filters, for example, said it used to transport by containers as the volume is large, but now the company transport by air given the decrease in export volume. The cost is higher, but it is faster in the current situation.

The lack of platforms for exporting masks is also a big challenge facing companies, especially private companies.

A mask producer, who has a factory in Hubei Province, told CGTN that most of his products are either bought by the government, or sold to foreign countries. But he has to rely on agents in the middle to deliver information as he does not have direct access to buyers.

"There isn't a transparent platform for factories and buyers, so it's hard for us as private companies to know whether or not the buyers overseas have real willingness and financial capacity to buy our products," he said.

His mask factory received an order from a European buyer weeks ago, demanding one million facial masks. The factory worked around the clock to produce them and after they finished all procedures, including packing and customs clearance, the buyers said they don't have enough money, and asked if the factory could deliver the masks before they wire the payment.

"There are formal channels for procurement on the government level, and they are efficient. But for private enterprises, we rely on dealers and thus we face risks," he said.


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