In our last issue, I wrote about the good news associated with Covid-19 (yes, I am an optimist). Now, I bring you more good news – and it won’t come as a surprise. For obvious reasons, the market for personal protective equipment is exploding!
Amedical technology-focused market intelligence and consulting company called Life Science Intelligence (LSI) has just released a report called “Covid-19 Impact on Global Market for Personal Protective Equipment (PPE): Gowns, Masks, Respirators”, which contains some fascinating – if not totally unexpected – findings.
The sector is really on the bubble. “PPE markets are continuing to explode. Existing suppliers are scrambling to keep up. New suppliers are entering the market daily,” a spokesman for the company says.
According to LSI, the global market for masks was estimated to be five billion units per year prior to the outbreak and is now expected to exceed 100 billion units in 2020 – and that’s assuming the virus will be contained and the incidence of new infections subsides by the end of 2020.
The price of masks has been soaring – they are selling at more than 10 times the standard price in many cases.
Ironically, China is the main supplier of PPE, and Chinese company BYD is the world’s largest mask manufacturer. This is interesting because BYD has typically focused on a completely different area of business.
For many years, I have written about commercial vehicles for SHEQ MANAGEMENT’s sister magazine, FOCUS on Transport & Logistics. I’ve written about BYD (which, incidentally, stands for “Build Your Dreams”) many times over the years. One of China's largest privately owned enterprises – BYD started as recently as February 1995 – it is that country’s largest producer of electric vehicles and the world’s largest producer of lithium iron phosphate batteries. It sprang to the attention of South Africans when it secured a much-discussed R128 million tender to supply electric buses to Cape Town back in August 2016. While the buses were delivered, the entire deal remains mired in controversy.
But I digress. This enormously successful company has now turned its attention to producing masks. It has considerable resources and, according to a press statement released by the company, “a special task force was appointed by BYD chairman and president Wang Chuanfu, consisting of leaders from different business divisions and more than 3 000 engineers involved in research and development, design, processing and other roles”.
The task force moved “with incredible speed” and, we are told, in less than two weeks it had finished work that normally takes two months to complete. “It completed both the R&D and manufacturing process of mask production equipment within seven days, whereas on the market, it would normally take 15 to 30 days to fully manufacture a mask-producing machine. At the same time, BYD also completed the R&D of medical-grade hand sanitisers in six days,” notes the press statement.
The company now has the capacity to build 50 million masks and 300 000 bottles of disinfectant a day. Putting this into perspective, China's entire daily production capacity in early February was 20 million masks.
Some will say that BYD is printing profits in this factory. And yes indeed, those commentators are probably correct. However, in fairness, BYD has pledged to donate US$1 million (about R17 million) in PPE and hand sanitiser to frontline workers, first responders and law enforcement officials. This is a drop in the ocean for this utterly enormous company. After all, BYD is listed on the Hong Kong and Shenzhen Stock Exchanges, with revenue and market capitalisation each exceeding RMB 100 billion (about R241 billion). But it’s a nice gesture. And, you know me, I’m always seeking out a little bit of good news …