Market Report March 2020

Market Report March 2020:

Face masks, protective clothing, sanitizers

What is the global supply situation for hygiene products such as protective clothing and hand sanitizers?

Production is currently being ramped up worldwide. Many companies are failing due to insufficient machinery and bottlenecks in the supply of raw materials such as FFP fleece or ethanol for disinfectants. Numerous export restrictions create further challenges and aggravate the situation in the supply chains.

With the strong increase in demand for protective clothing and disinfectants, the price is also rising. Which is the highest price to be paid for?

No generally valid statement can be made about this. Both on the product side and regarding to logistics, the respective daily prices must be obtained and compared.

But just to name a few figures: Before the outbreak of the corona pandemic, an FFP2 mask cost about 0.45 EUR per piece. Now we have an enormous contrast with unrealistic prices of up to EUR 15 per piece. Realistic prices are currently around EUR 7 per unit. Due to the more stringent measures by the federal and state governments and upcoming decisions on compulsory masks across the states, further price jumps are to be expected.

How many calls do you receive from your customers per day regarding the purchase of face masks and other items?

We receive about 200 calls from our customers every day, who come to us with all sorts of concerns about the subject.

Which industries are currently urgently looking for protective clothing and disinfectants?

Primarily these are associations, hospitals, industrial companies and trading companies. Classically, companies and institutions whose capacity utilization is increasing enormously due to the corona crisis.

How quickly can the Kloepfel Task Force organize protective masks and other similar items for its customers?

Our normal delivery time is 10 to 14 days. If we have goods in stock, we are much faster.

Where do the masks come from and is the supply from Germany increasing?

Currently the masks still come 100 percent from China. A significant increase in supply from Germany is not yet apparent.

What challenges does logistics pose?

In logistics are prices and capacities particular problems. Due to the difficult regulatory conditions, freight prices have exploded and airfreight capacities have been exhausted, as regular passenger flights as a means of transport have been eliminated. As a result, only cargo planes are still in use. At the same time, there are processing bottlenecks at airports in China, which often lead to delays.

How will the market develop in the next four weeks?

That is difficult to predict. It depends very much on how the virus develops and which demanders appear. If South America and Africa also enter the market with high demand for hygiene products, it will be difficult to meet global demand even at maximum production levels. What happens in a second wave after a calming phase in summer? Will there be compulsory masking? These are all unknown indicators which will have a strong influence on the availability of masks and co.

Will production and supply in Germany and the EU increase?

The figures are rising, but there is still a lack of machine capacity and suitable raw material. Unfortunately, production cannot be switched on and off like a light switch. It takes months to raise such a production curve. In Germany alone we need 70 to 80 million protective masks per week for the medical and care sector. On top of that, there are the industrial sector and private customers as well.

The demand for protective masks is increasing worldwide. How is the competition for masks and co. making itself felt?

The high global demand can be clearly seen in the three factors price, quality and security of supply. Prices are rising sharply, quality is declining in part due to the problems mentioned above and supply security is not guaranteed due to the logistical challenges.

How can the protective means production in Germany and the EU be increased? For example, by means of creative solutions (Trigema sews masks)?

Unfortunately, these self-sewn masks have little function and are therefore not very suitable. If you really want to protect yourself, you should fall back on high-quality FFP3 masks.

How do you recognize fraudsters or how do you recognize fraudulent online shops?

These usually have no or inappropriate certificates. In addition, these providers rarely have a company history, nor do they have references. Unfortunately there are also fraudsters who are difficult to recognize, so caution should be exercised. It is best to use experienced intermediaries, such as the Kloepfel Task Force, to handle the procurement.

How do the quality checks take place at Kloepfel?

We only procure from verified manufacturers and have samples and references presented to us. We carry out on-site inspections (e.g. in China) to ensure the quality and functionality of the products.

How large is the task force for protective clothing and disinfectants?

Our team now consists of about 40 employees. We support our customers in a goal-oriented manner and respond to individual needs. Thanks to the large network of the Kloepfel Group, we have excellent contacts all over the world and can therefore react quickly and find solutions to our customers’ problems.

Recommendations for action to governments?

Governments should think about a multilevel model:

Level 1: Solve acute supply shortages with verified partners

To this end, the decision-making processes must be accelerated in a timely manner. Decision-making bodies must be streamlined, decision-making processes and orders accelerated and payment terms (advance payment) must be adapted to reality. The release process must be simplified and adapted to the situation.

Level 2: Investments in local production

Here the entire production chain must be taken into account. From the availability of raw materials such as fleece and elastic bands to the final mask production and the necessary machines.

Level 3: European coordination

EU countries need to work together and help each other to increase production, rather than stealing capacity from each other.