More than 90 per cent of applicants to Hong Kong government’s subsidy for mask production fail to meet standards

More than 90 per cent of applicants for a HK$1.5 billion government fund to subsidise the production of surgical masks in Hong Kong have failed to meet basic requirements. Of 63 entries, only two received by the Hong Kong Productivity Council fit the criteria as of Thursday, pending further approval for the scheme under a HK$30 billion package to lift the city out of the shadows of the coronavirus epidemic. Three other cases are still being reviewed, while the others failed to satisfy the set conditions. Under the scheme, manufacturers setting up a production line capable of delivering at least 500,000 masks a month would be given up to HK$3 million (US$386,000). Each subsequent production line in the same plant would then be subsidised by up to HK$2 million. Manufacturers are required to secure production equipment and raw materials, as well as have a production site and cleanroom facilities ready in the city. The application period ends on December 31 or when all 20 slots for subsidies are allocated. There is still hope of easing Hong Kong’s mask shortage, however, with the Post told that at least 13 organisations and firms were setting up local production lines, though only four had considered applying for the government subsidy. Others said it would be time-consuming to meet the standards required, while some such as developer New World Development – which intends to produce 200,000 masks daily for low-income families – added they did not plan to apply for government funding. Almost 400 applicants eye up HK$1.5 billion scheme to boost mask production Of the 13 production facilities, seven have started or would begin their operations in April. Three have already opened pre-orders and received overwhelming support. If their machines run for a conservative 30 days as scheduled, they could produce a minimum of 56.7 million masks a month from April – meeting nearly a fifth of Hong Kong’s estimated monthly demand of 300 million masks. Hong Kong developer to invest millions in mask production Among the remaining six manufacturers, one member of the group expected to join the production bandwagon in May could add another 4 million masks to the monthly supply. The other five firms did not disclose their expected daily output. A pioneering facility dubbed Mask Factory in Tuen Mun already started its pre-ordering scheme on Wednesday, with more than 100,000 customers. Its first batch of masks is set to be delivered to customers on March 28. The firm, set up by filmmakers, planned to have eight manufacturing lines running by late March, producing at least 880,000 masks a day. Despite the positive response, their ambition remains challenging after failing the latest certification for B95 masks, a model in their production. The test was based on the American Society for Testing and Materials Level 1 standards. Hong Kong government scrambles to buy more masks Mask Factory co-founder Tong – a filmmaker who only gave his surname – said while their samples passed the requirement for bacterial filtration efficiency, their resistance to penetration by synthetic blood did not meet the mark. As the criteria was only a near-miss, he said they would apply for other product certifications soon. “I am not worried consumers will have no confidence in buying our goods,” he said. “I will let consumers decide. It’s a critical period and they should find masks that suit them.” Another firm that has put up pre-orders is local social enterprise masHker. It opened online registration with a quota of 20,000 on Tuesday. “All were gone within one minute. It was shocking,” founder Denis Huen Yin-fan said. The firm planned to start production in April at the earliest to make about 3 million masks each month, and was interested in applying for the government’s subsidy. But it was still pending certification for product quality. While mask production and retail remained a huge draw for entrepreneurs, merchants selling hand sanitisers are suffering after an oversupply in the market. In early February, Hong Kong Legotoy Outlet Store received an order from a company it would not name to buy 20,000 hand sanitisers – which were short at the time and highly coveted. It invested HK$1.1 million and expected delivery in late February from Israel, but flights were delayed as airlines cut services amid the pandemic, so the products only arrived in early March. By then the client did not want the goods any more because market supply had caught up. “We didn’t receive any down payment or sign a contract. We can’t do anything because the industry practice is like this – relying on verbal promises. We will be more careful next time,” Hong Kong Legotoy Outlet Store sales manager Paul Lau said. The firm eventually resorted to selling each item at HK$39, cheaper than cost price by over HK$10. “But from this experience, we can see many Hong Kong people and organisations have good intentions. They paid us and asked us to help donate the goods to the needy,” he said.