China boosts face mask production capacity by 450 per cent in a month, threatening a glut scenario
- Total daily capacity rose to 110 million from 20 million in February with 3,000 new entrants; China made half of the global output in 2019
- Carmakers BYD and SAIC, iPhone assembler Foxconn and oil company Sinopec are among ‘new faces’ in the industry
Total daily capacity surged to 110 million units at the end of February, according to the National Development and Reform Commission, from 20 million at the start of the month. At this rate, the country is set to churn out almost 10 times the volume it produced in 2019.
“It’s a no-brainer that this will eventually lead to an overcapacity,” said Gao Shen, an independent manufacturing sector analyst based in Shanghai. “The profit margin in this business is extremely thin and demand will drop when the viral outbreak is contained.”
The biggest public health crisis in two decades has enticed 3,000 newcomers to the industry this year, according to Sina news portal, adding to a field of 4,000 who produced 4.2 billion face masks last year or half the world’s output, according to government data.
Among the ‘new’ entrants are a clutch of juggernauts – car makers BYD and SAIC-GM-Wuling, iPhone assembler Foxconn and oil and gas producer Sinopec.