Exporting masks - China's new 'money printing machine'

In early February, when the epidemic was raging in China, Guan Xunze's company, 34 years old, built a new mask factory in just 7 days.

This factory, with five production lines, located in northeastern China, supplies N95 masks to meet the huge market demand as the number of nCoV infections continues to increase rapidly every day.

Now, as the number of nCoV infections in China gradually decreases, Guang continues to profit from new markets, exporting masks to Italy, where the death toll has surpassed China.

More than half a million cases of coronavirus have been recorded globally and demand for protective equipment is still soaring as many countries struggle to contain the outbreak.

“A mask machine is a real money printer,” said Shi Xinghui, a sales manager at a mask machine company in Dongguan city, in southeastern Guangdong province, adding that profits from mask sales are soaring, several times higher than before.

Qi Guangtu has invested about $7 million in his mask-making machine factory in the southern industrial hub of Dongguan. The facility has been running 24/7 since January 25, two days after Wuhan, where the virus first emerged in China, was locked down.

“Recovering the investment is not a big deal,” Qi said. After two months, his company has sold 70 sets of products, each priced at $71,000. Qi has more than 200 orders in hand, worth a total of $14 million.

“After buying the machine and operating it, it only takes 15 days to get the investment back,” Qi said. According to him, this investment is extremely lucrative for customers.

Manufacturer You Lixin had never set foot in a mask factory before. But when demand for masks skyrocketed, seeing the opportunity, it took You just 10 days from deciding to enter the market to completing his own automatic mask making machine production line.

"I only sleep two or three hours a day, and so do my customers," he said.

Customers even slept at his factory waiting to receive mask production machines.

Many of them are garment factory owners in Wenzhou, in the eastern province of Zhejiang, who have recently switched to making masks. “They have so many orders that they don’t have the capacity to deliver the right quantity,” You said.

The continued increase in mask production has also led to a rise in raw material prices. Guan said the price of fabric has skyrocketed from more than $1,400 to nearly $68,000 a ton.

Manufacturer Liao Biao had trouble transporting mask machine parts from outside Hunan Province in late January due to travel restrictions between provinces. In the end, Liao had to pay an expert to test the mask machines at 10 times the normal price.

“Investing now is blind,” You said.

But despite rising production costs, huge profit margins make the industry attractive.

China's daily mask output has exceeded 116 million, enough to supply foreign countries.

Guan has exported one million masks to Italy, while Shi currently has over 200 orders from South Korea and other European Union (EU) countries.

“Dongguan is still the world’s factory,” Shi said. “Orders first peaked around mid-February. Now there is a new wave of orders because of the pandemic.”

Liao is also looking to export masks to Europe and Canada. “The demand for masks at home has decreased, now we have surplus to support other countries. We are ready to help,” he said.

Guan is optimistic about the future of the mask industry, even after the pandemic passes.

“Most people will still wear masks after this epidemic,” Guan said. “I will still be in the mask manufacturing industry.”