America’s mask makers face post-pandemic meltdown

By Timothy Aeppel

(Reuters) – The small U.S. manufacturers that rushed to produce face masks over the past year are now stuck with hundreds of millions of unsold face coverings because China is flooding the market with below-cost masks, and most may not survive the end of the pandemic.

That’s the thrust of a letter to President Joe Biden released Tuesday by a trade group representing 26 small manufacturers that set up production of the badly needed safety items as the health crisis took hold last year.

The manufacturers said over half their production would be forced offline in 60 days if they don’t get immediate federal aid, costing thousands of jobs. They blame low-priced imports, especially from China.

“We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts,” the newly formed group, the American Mask Manufacturer’s Association, said in the letter.

The group said they have capacity to produce 3.7 billion surgical masks and more than 1 billion of the higher-protection N95 masks a year – and are now sitting on stockpiles of 260 million surgical masks in their warehouses that they are struggling to sell. Another 20 million N95s are also on factory shelves.

When masks were in short supply last year, prices surged. But prices have now crashed, and hospital administrators and others are shopping for the best prices in a market crowded with new offerings.

A box of 50 surgical masks which sold for more than $50 a year ago can be found for $5 now.

The trade group said while there are 3 to 6 cents in raw material in every surgical mask, imported Chinese surgical masks now sell for an average of 1 cent each. “China … is effectively dumping masks on the U.S. market at well below actual costs.”

“If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year,” the group said in the letter. The group said they’d created more than 7,800 U.S. jobs in the last year, but roughly a third of those have already been lost to production cuts.


The Biden administration has pledged to look at ways to support domestic producers of protective equipment – including potentially finding ways to subsidize U.S. producers – but the government reviews are still underway.

“The idea that everyone expressed during the crisis – that we need to avoid (PPE shortages) ever happening again – hasn’t changed profit-driven institutions,” said James Wyner, chief executive of Shawmut Corp., a West Bridgewater, Massachusetts, maker of engineered materials that expanded into mask production during the crisis. “The distributors are still sourcing their stuff at the lowest price.”

Wyner said he’s selling masks from his new production lines, but “substantially less than we would like.”

Adam Albrecht, senior quality control manager at Indiana Face Mask, another small producer, said when the firm first started producing the higher-filtration N95 masks last year, “People came out of the woodwork, saying: ‘We can sell this, we can sell this.’ But it seems no matter how much we adjust prices down, the Chinese stay just below.”

Some of the small mask makers are confident they will survive.

Dan Izhaky, who together with a partner has invested $4 million in a new mask factory outside Los Angeles, said the challenge is greater for makers of surgical masks, the ubiquitous safety masks that are relatively easy to make. Izhaky’s company makes more complex N95 masks and he said he has continued to expand. “But we also believe the Biden administration is going to take a number of steps down the road to really help us be sustainable,” he said.

The mask trade group – which doesn’t include industry giants such as 3M Co. and Honeywell International Inc. – urged the Biden administration to take immediate action to support the industry.

Their recommendations include requiring the federal government and any other institution receiving federal dollars for buying protective equipment to buy only U.S.-made masks that comply with government rules on domestic content and remove any masks in the federal stockpile that don’t meet federal standards. They also want the administration to require any hospital that accepts federal funds to earmark 40% of its spending on PPE for domestic producers by 2023.

They are also asking the government to consider buying the 260 million masks now stockpiled at the new factories.

(Reporting by Timothy Aeppel; Editing by Dan Burns and Andrea Ricci)

Robbers grab 100,000 surgical masks at gunpoint as Ukraine enters shutdown

By Matthias Williams and Pavel Polityuk

KIEV (Reuters) – Ukrainian shops, restaurants and transport shut down on Tuesday as the country tightened restrictions to contain the spread of the coronavirus, while police arrested five people suspected of trying to rob 100,000 surgical masks at gunpoint in Kiev.

The country has seven confirmed cases of the coronavirus so far, including one death. The government has encouraged people to stay at home wherever possible except to buy food and medicine, but has stopped short of introducing curfews.

Following a series of emergency steps introduced by President Volodymyr Zelenskiy, parliament in a special session on Tuesday approved measures including fines and prison sentences for people who broke mandatory quarantine.

The economic fallout from the epidemic also continued to bite as the hryvnia currency slipped to 27 to the dollar for the first time since June 2019.

The central bank said it would not impose foreign currency restrictions and added it had $25 billion in reserves to continue market interventions.

Nevertheless it warned of an economic hit on Ukraine, which is still fighting a simmering conflict against Russian-backed forces in the eastern Donbass region that has killed more than 13,000 people since 2014.

In Lviv, a picturesque city of cobblestone streets in western Ukraine that is popular with tourists, restaurants and cafes closed and supermarket attendants wore masks and gloves while working at the tills.

“Of course, no one is happy about the restaurant shutdown,” said Mark Zarhin, the owner of a restaurant chain.

“It is like a perfect storm in Lviv. We face both ‘plague’ and war today. It is the worst. But it’s not the fact that we close the restaurants that is bad, but the fact that we don’t know for how long. We cannot predict anything.”

The nationwide shutdown will include the closure of the Chernobyl area, the site of the world’s worst nuclear disaster in April 1986 that has since become a visitor attraction.

Kiev’s main airport was mostly empty after the government banned passenger flights to and from the country, and announced a shutdown of domestic air travel from Wednesday.

The authorities also announced the arrest of a group of people who, initially posing as members of the state security service, stole a stash of 100,000 surgical masks at gunpoint from a private seller who had stored them in his car.

“Instead of negotiating the purchase and sale conditions, the criminals attacked (the seller), took the masks and beat the man,” Kiev police chief Andriy Kryshchenko said. “Wearing police uniforms and threatening to use firearms, the criminals took possession of the whole batch of goods.”

(Additional reporting by Sergiy Karazy; Editing by Alexandra Hudson)

Foxconn, Chinese firms refit production lines to make masks amid virus outbreak

By Josh Horwitz and Brenda Goh

SHANGHAI (Reuters) – A number of Chinese manufacturers including a subsidiary of Apple Inc partner Foxconn have refitted production lines to make masks and medical clothing, as a deadly coronavirus spreads across China.

The move highlights how private companies are pitching in to alleviate a nationwide shortage of medical gear amid the health crisis, at times expanding beyond their core lines of business.

In a social media post on Thursday, Foxconn – formally Hon Hai Precision Industry Co Ltd – said it has begun trial production of surgical masks at its Longhua Park plant in Shenzhen, and expects to produce 2 million masks daily by the end of the month.

The Taiwanese company said the masks would initially be produced for internal use by its hundreds of thousands of employees, the majority of whom work in factories in mainland China.

SAIC-GM-Wuling Automobile Co Ltd, a joint venture automaker formed by General Motors Co <GM.N> and two Chinese partners, also announced on Thursday via social media that it will set up 14 production lines with the goal of making 1.7 million masks daily.

On Tuesday, Hongdou Group Co Ltd [HONGD.UL], a clothing manufacturer founded in the 1950s, wrote on social media it had refitted a factory to make disposable medical suits.

The company said it intends to produce about 60,000 protective suits a month and will send them to the government for allocation and distribution. Hongdou employs 30,000 people, its website showed.

Apparel peers Zhejiang Giuseppe Garment Co Ltd and Jihua Group Corp Ltd  have launched similar initiatives, state media outlets reported this week.

Factories inside and outside of China have worked around the clock to keep up with demand since the outbreak of the virus at the end of last year in the eastern Chinese city of Wuhan in Hubei province. High street pharmacies have posted signs telling customers masks are not in stock.

One Czech mask manufacturer told Reuters in late January that orders had increased 57,000% with in four days.

To cope with the shortage, localities in China have set up rationing systems.

In Shanghai, individuals wanting to obtain masks must provide a neighborhood committee with their ID and phone number, after which they are contacted when they can retrieve a set of masks.

(Reporting by Josh Horwitz and Brenda Goh; Additional reporting by the Shanghai newsroom; Editing by Christopher Cushing)