Need for Face Masks in China Pushes Auto, Energy Companies to Make Them

Date: Monday, February 10, 2020
Source: The Wall Street Journal

GM venture, Foxconn, Sinopec use assembly lines to produce protective gear to fight coronavirus outbreak

China’s auto makers, the world’s biggest iPhone assembler and even state-owned energy companies are using their assembly lines to pump out more face masks and other medical supplies as the country responds to a coronavirus outbreak that has spread around the world.

President Xi Jinping last week declared a “people’s war” against the coronavirus and, as nations do in wartime, China is mobilizing its manufacturing machine to fill a shortfall of critical supplies.

Face masks have become essential protective gear for front-line medical workers treating patients infected with the virus. But demand for face masks among the Chinese public has stretched supply, as have requirements in some provinces mandating they be worn by anyone leaving home.

On Friday, China Petroleum & Chemical Corp., SNP 0.15% the $75 billion oil giant known as Sinopec, said it had secured mask-production equipment and was setting up 11 production lines, while Shanghai Electric Group Co., along with a partner, said it plans to set up 10 production lines this month.

Foxconn Technology Group, which makes Apple Inc.’s AAPL 0.47% iPhones, said recently it had begun testing production of masks in the southern Chinese city of Shenzhen, adding that by the end of the month, it hopes to produce two million masks a day for its workers and possibly for aid purposes.

General Motors Co. GM 1.84% ’s local joint venture also said last week that it would set up 14 lines to produce at least 1.7 million masks a day.

On Saturday, Chinese car maker BYD Co. said it would aim to produce five million masks a day and 50,000 bottles of disinfectant by the end of February, while Guangzhou Automobile Group Co. said it is studying the feasibility of new mask production lines.

“We believe more and more social forces will join the fight against the epidemic and work together to win this battle!” GM’s joint venture, with SAIC Motor Corp. and Wuling Motors Holdings Ltd., wrote on its account on Chinese social-media platform WeChat.

 

 

The shortage of masks also has become a global issue, with masks disappearing from store shelves and selling out online. Mask producers around the globe, including 3M Co., of St. Paul, Minn., Tokyo-based Unicharm Corp. 8113 1.20% and Foshan Nanhai Beautiful Nonwoven Co., based in the Chinese province of Guangdong, have all ramped up production, some running their product lines 24 hours a day, seven days a week.

Foreign mask makers with factories in China have had their production runs snapped up by local governments, which have, in many cases, blocked the companies from exporting the masks.

“Demand is 200 times higher than normal, and prices are up to 20 times higher” for masks, respirators and other medical protective equipment, World Health Organization Director-General Tedros Adhanom Ghebreyesus told a news conference on Friday.

Factories in China, many of which have extended their Lunar New Year holiday in a bid to reduce their workers’ exposure to the virus, are generally set to restart operations this week. Even so, it appears increasingly unlikely that they will be able to ramp up production quickly because of supply-chain disruptions and nationwide travel restrictions that will hamper workers returning from their hometowns.

Auto makers, including Toyota Motor Corp. and Volkswagen AG , have pushed back production resumption at some plants to Feb. 17.

In a document released Sunday, three of China’s top government bodies, including the state’s economic planner and its finance ministry, said they would offer support for capital, production sites, material and equipment to companies willing to produce medical products.

An official at the state planning agency said Sunday that 73% of mask manufacturers had restored their production capacity as of Friday after work was halted in many factories because of the Lunar New Year holiday and the virus outbreak.

The death toll from the outbreak has now surpassed that of severe acute respiratory syndrome, or SARS, nearly two decades ago. In mainland China, 811 people had died from the coronavirus, China’s National Health Commission said Sunday, exceeding the 774 people killed by SARS. More than 37,000 people had been infected, the health commission added.

Medical experts have questioned the effectiveness of masks at preventing the spread of the virus, saying masks need to be fitted and worn properly to have benefits. The best ways for people to avoid infection, experts say, are to wash their hands often, and avoid touching their eyes, mouths and noses.

 

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