On April 14, local time, stock god Buffett posted a photo of himself wearing a mask produced by BYD on his social media account with the text ” My goal is to live a long life, and the progress so far is good. And now, BYD masks are helping me! Thank you!”…
BYD Guangcai Meltblown Bu
As we all know, BYD is a well-known automobile manufacturing company in my country. However, in order to combat the COVID-19 epidemic and speed up the resumption of work and production, the car company BYD has recently invested in its role as a mask manufacturer.
On the evening of April 15, Nal Shares (002825), a listed company mainly engaged in the research, development, production and sales of digital printing materials, announced that the company had entered into an agreement with Shenzhen BYD Supply Chain Management Co., Ltd. The company (hereinafter referred to as “BYD Supply Chain”) signs a procurement contract. BYD’s supply chain plans to purchase 100 tons of meltblown cloth produced by the company, with delivery time from April to July, of which the prepayment for goods delivered in April and May is 20 million yuan.
There are endless examples of large manufacturers like BYD switching to the production of masks in China:
Earlier, with the spread of the epidemic across the country, many People in remote areas have also begun to wear masks, and masks have become a daily “rigid necessity”. Due to the sudden expansion of demand, even if 3M and Honeywell run out of inventory and activate factories around the world to produce masks at full capacity 24 hours a day, 7 days a week, the “distant water” will not be able to save the “near fire”.
At this time, what is most needed is to focus on the power of Made in China. In order to fill the gap, major domestic companies have stepped forward and have been producing masks non-stop day and night since the Spring Festival.
Among them, a wave of magical operations by Robust Medical has been widely circulated on the Internet. As early as December 20, 2019, it was already producing masks at full capacity. It produced more than 100 million masks in more than a month, and its daily production capacity reached 3 million.
What’s even more amazing is that “big manufacturers” such as Sinopec, Shanghai GM Wuling Hongguang, and Foxconn have also renovated mask production lines to increase production capacity and make up for the gap.
On February 6, Sinopec (600028) widely posted “hero posts” on its official Weibo – “I have meltblown cloth, who has a mask machine?”, “Increase production “We can purchase all the masks to support Hubei’s frontline fight against the epidemic, and we can also support local epidemic prevention and fight against the epidemic.” It said that it has raw material meltblown cloth and urgently needs mask machines to increase the production of masks to fight the epidemic.
Epac, a subsidiary of Sinopec that is responsible for the production of masks this time, is the largest e-commerce platform for industrial products. It has abundant reserves of meltblown cloth, the raw material for masks, so as long as the mask machine With that, production starts in minutes. Sinopec also stated that the company has melt-blown cloth, and if any company lacks this raw material, the company can transport it to your door.
It is not difficult to see that producing masks is not difficult. This is especially true for Foxconn, a manufacturing enterprise with decades of history that has no shortage of resources such as the ability to transform production lines, procurement of raw materials, and labor.
Industrial Fii (601138) announced on February 7 that it has added a new production line for medical masks. It is currently expected to achieve a daily production capacity plan of 2 million pieces by the end of February, with priority being used for Foxconn Group’s nearly one million employees provide internal production for epidemic prevention; they do not occupy social resources and make room for public demand for masks; in the future, they will actively provide external support depending on the situation to provide strong support for the current epidemic prevention and control work. At present, its first production line with a daily output of 100,000 masks is still in the trial production stage, and product qualification certification is still being applied for.
If “everything can be Foxconn”, then how come the “national car” SAIC-GM-Wuling would think of making masks?
On February 6, SAIC-GM-Wuling, a subsidiary of the leading automobile group SAIC, plans to work with suppliers to convert production lines to produce masks. Its dust-free workshop was renovated by Guangxi Construction Engineering Group and will be completed and put into use this month. The project plans to build a total of 12 mask production lines, including N95 and general medical protective mask production lines, with a daily production capacity of more than 1.7 million.
Because the masks are made of the same material as the sound-insulating cotton used in cars, SAIC-GM-Wuling and its joint suppliers can make masks by changing the production line.
In fact, companies such as Sinopec, Foxconn, SAIC-GM-Wuling, etc. have high-standard clean workshops and sealing workshops, which are perfect for producing masks.
Compared with the “crossovers” of giants such as Sinopec, Foxconn, SAIC-GM-Wuling, it is even more natural for diaper and underwear manufacturers to switch to mask production.
, rushing to support the front line in the fight against the epidemic. Daddy Baby’s official Weibo shows that after switching to the production of masks, its production capacity has been accelerated to 1.4 million as of February 6.
As the epidemic enters the most difficult period of the outbreak, not only masks have received support from various companies, but also companies have come forward to provide supplies that are urgently needed during the epidemic.
The powerful Jinjiang clothing company took the initiative to switch production of protective clothing this time. After donating 3 million yuan, Lilang Group cooperated with Jinjiang clothing companies such as Silan Group, Jiujiuwang Food, and Xunxing Zipper.”With strong efforts, workshops and workshops, people and people, and materials and materials,” mass production of professional medical protective clothing was achieved in just 3 days.
Production changes are everywhere. Zhejiang Guyue Longshan Shaoxing Wine plans to produce 60,000 bottles of disinfectant alcohol. A company that produces liquor in Liaocheng, Shandong Province also temporarily decided to switch production and donated 100,000 bottles of 75% alcohol to the front lines of the fight against the epidemic.
However, not all conversion companies have reaped huge profits
As the “big brother” in China’s casual clothing field, Sou Yute also It is no exception. It invested 200 million yuan in the early stage to produce masks, but it lost 75 million yuan in 3 months. It was supposed to be a business that was guaranteed to make a profit, but why did it suffer such a huge loss?
The maximum loss will be 75 million in 3 months
Not long ago, Souyute just announced its financial report for the new quarter. According to data, the company expects losses to be between 50 million and 75 million yuan. Two months ago, the company announced an investment of 200 million yuan to produce masks and other medical supplies. It is said that this time point is very appropriate, because there is currently a shortage of masks in the world, so why will there be a loss of 75 million yuan in three months?
In the financial report, Souyute stated publicly that the company’s losses were due to the impact of the epidemic, which caused serious damage to its clothing business. But in fact, the business that really caused it to stumble was the “transformation” two months ago. At that time, seeing that medical resources were in short supply around the world, Souyute threw himself into it without any hesitation. Unexpectedly, he did not make any money but instead suffered huge losses.
The initial investment is large and the production capacity cannot keep up
As a clothing company, Souyute wants to produce masks, etc. Medical resources are not a simple matter. The first thing to solve is the problem of production equipment. At that time, Souyute purchased dozens of mask machines at once in order to mass-produce them as quickly as possible, spending a total of tens of millions of yuan. In addition, there will be a new purification workshop and a lot of labor costs.
Although a lot of investment has been made, the company’s ability to produce masks has not improved. It is reported that until the middle of last month, the company only had four mask machines in operation. Even today, there are only about 20 machines that can stably produce masks. Without production capacity, there will be no sales, which means huge losses every day.
Global mask market unit price drops
In fact, Souyute may make masks. Too simple. In many people’s minds, it is enough to produce masks with labor and machines, but things are far from that simple. Because masks are medical resources, the relevant standards are very strict. The cost and requirements for the purification workshop alone are very high.
Finally, the masks produced by Souyute have no advantage in the market. Now that the domestic epidemic situation has improved, it is hard to see that masks are difficult to buy. The only thing that can be done is to export. At this time, the price of global masks is also falling, and they are not as popular as before. According to media reports, in the middle of last month, a domestic company exported 8 million masks overseas, with a total price of hundreds of millions of yuan, and an average of 13 yuan each. But in just half a month, the price of exported masks was only about 2 yuan.
Summary: Although Souyute is interested in producing masks, he lacks a certain understanding of related industries. . Due to the high investment in the early stage and the delay in increasing production capacity, the best golden period for making money was missed. Nowadays, although production capacity has been improved to a certain extent, it has also encountered the problem of falling unit prices of masks. It is strange that Souyute is not losing money. Having said all that, what do you think of the prospects of the mask industry? Welcome to share and discuss in the message area. As technology changes and the times progress, I will be with you!
Expanding production capacity is not something that can be accomplished overnight. A mask requires a cycle from upstream raw material production, to midstream manufacturing and packaging, to downstream distribution and sales through various channels.
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