Many people must have watched the documentary “Mask Hunters” that has attracted much attention some time ago. The protagonist in the film purchases masks and raw materials all over the world, and high-end hotels, luxury cars, bodyguards, and even private jets frequently appear. Although it is very interesting, it seems a little far away from our lives. There is a story that happened in the author’s hometown and is closer to us, and it may be more worthy of our attention.
01
During the Lunar New Year, well-known large companies such as BYD, Sinopec, and SAIC have all joined the mask production army in an attempt to solve the problem of mask shortage. bureau. In fact, no matter what brand of masks we buy, if you turn to the back of the packaging box and take a closer look, most of them are produced in a small place you have never heard of. Qingcao Town, under the jurisdiction of Tongcheng City, Anhui Province, is such a place. In early February this year, Anhui Province sent provincial-level leading cadres to Qingcao Town to urge local mask companies to speed up the resumption of work and production and expand production. Some people may have heard of Hubei Xiantao, which is a model area for intensive production and export of masks during non-epidemic periods. In contrast, the mask industry in Qingcao Town is relatively fragmented, and sales are mostly focused on the domestic market. In terms of products, before the outbreak, no local company had the qualification to produce medical devices. Most of the masks produced were used for dust prevention and protection rather than virus protection. However, there are a handful of relatively mature companies that have been gradually introducing sterile workshops under the guidance of the local government since the first half of last year, applying for relevant qualifications, and planning to enter the field of medical masks.
In addition to Qingcao Town, I also observed the adjacent Gaohe Town in Huaining County and Yuantan Town in Qianshan County. Yuantan Town mainly produces brushes for cleaning, home decoration and industrial polishing. Many of them have replaced imported products, including screen polishing brushes used by Samsung Electronics in South Korea, and have formed a relatively complete industrial chain. Because Gaohe Town is a new town, the industrial agglomeration phenomenon is not obvious. There are a few timber and chemical companies. However, the advantage is that it is vast and sparsely populated, and the government is very enthusiastic about foreign investment. The reason for mentioning these two places is that these three counties have relatively close exchanges on weekdays. This epidemic has also influenced and penetrated each other, and the local people generally regard it as one economy.
From a data point of view, in Huaining County, with Gaohe Town as its economic center, from January to March this year, the sales output value of the medical manufacturing industry and chemical fiber manufacturing industry increased by 156.78% and 27.75% year-on-year. What is growing here is actually the mask industry. At the same time, there are 382 mask manufacturers, including 68 companies with annual income of more than 20 million yuan. You should know that Huaining County’s permanent population in 2019 was only 614,000, and on average there was one mask factory for every 1,600 people. Before the epidemic, the number of local companies producing medical masks was approximately zero. The data from the other two places are also very similar and will not be detailed here.
02
Lao Hu, who is from Huaining County, left home to start a business in other places in the early years and achieved little success. In recent years, he heard about his hometown The government is vigorously promoting investment, so the idea of returning to hometown to invest came up. In early February this year, Lao Hu learned from a friend that some local companies that were previously engaged in plastic product processing have switched to producing disposable medical masks. The daily gross profit (excluding equipment purchase and depreciation expenses) can reach 500,000 yuan. With such a high return, Lao Hu, who had the funds in hand, was tempted. At this time, companies that were originally engaged in mask production or had related technical equipment (such as plastic products companies with sterile workshops) had been fully switching to mask production for nearly half a month under the call of the local government. These enterprises can be called “regular troops” subject to government supervision and guidance.
After a period of consideration, Lao Hu and two relatives and friends raised a total of about 5 million yuan in start-up capital and purchased two KN95 mask production lines at a price of 900,000 yuan a piece in early March. Because he had no knowledge of the purchasing channels, the middleman charged a purchasing commission of 100,000 yuan per unit.
In addition to the production line, the non-woven fabrics required for medical masks (that is, the blue outer layer of our common masks) also need to be purchased in large quantities. During non-epidemic times, the original price is about 7,000-8,000 yuan per ton. In mid-February, the price rose to 35,000 yuan per ton. At this time, Lao Hu stocked up on non-woven fabrics worth about 2 million yuan. After that, the price continued to soar. In March, Lao Hu transferred a small amount of non-woven fabrics to his peers at a “favor price” of 80,000 yuan per ton. By early April, the market price of non-woven fabrics reached a peak of about 140,000 yuan per ton.
Although he has stocked up a large amount of non-woven fabrics, Lao Hu does not have much inventory of the melt-blown fabrics needed to make the middle layer of masks (used to isolate viruses). Why is this? Because you really can’t buy it. Lao Hu once purchased two tons of meltblown cloth from an acquaintance at the price of 390,000 per ton at the end of March. But Lao Hu immediately discovered that there was a quality problem, and returned it at a price of 420,000 per ton the next day. Unexpectedly, he made a small profit. Since then, Lao Hu has purchased a small amount of melt-blown cloth for production when the market prices were 600,000 and 700,000 per ton respectively.
According to industry insiders, the price of a ton of meltblown cloth generally fluctuates between 400,000 and 700,000, depending on the filtration efficiency of 90% to 99%. At that time, there were very few suppliers across the country who could achieve the 95% filtration efficiency required to produce KN95 masks. Only one or two of them can satisfyCompanies in the town and surrounding areas did not have any production conditions and qualifications to use medical masks before the epidemic. The arrival of leaders has indeed brought business and job opportunities, but have ordinary rural families and small investors read a wrong investment signal from it?
As mentioned above, the tax department is recovering more than 20 million in taxes from a mask giant, and the governments of the three places have strictly required mask manufacturers to use industrial electricity (i.e. three-phase electricity). These two points are consistent. The combination shows that the government is aware of the explosive growth of mask companies, and must have heard about the sky-high prices of machines and raw materials on the market. However, the local government did not correctly guide and standardize market access rules, resulting in countless small-capital investors and even ordinary people being trapped. Even the high-spirited “regular army”, after making initial profits, has injected capital into N95 production with the idea of ”keep up the good work”. These companies are still experiencing certain risks. In chatting with some big guys, I briefly estimated that private capital of about 2 billion in the three counties would be difficult to escape. However, many people at the scene said that I was too optimistic and that the reality might be double.
In recent years, whether it is food delivery apps or bike-sharing wars, they have consumed investors’ money, and often “benefited” us as ordinary consumers (such as food delivery for a few yuan, free bicycles). However, during the wave of mask production, many rural families did not hesitate to use their savings to join the production army. What eventually evaporated was the “marriage money,” “dowry money” and “pension money” saved by years of hard work. Such investment does not seem to go to any group. brings advantages? After all, a considerable part of the masks produced are not up to standard, and exporting them overseas may even affect the reputation of Made in China.
As an observer, I am not worried about the bankruptcy crisis caused by the evaporation of large and small capital. Investment is always risky. What is worrying is the social instability caused by ordinary rural families losing their savings. On the surface, this is just the in and out of capital, and it is just a number in government statistics. In fact, farmers’ savings have been taken away.
Since the government has strict control over the electricity consumption and taxation of mask companies, it shows that it has the ability to monitor market dynamics. Even under the current socialist market economic system, the government should not be overly involved, but moderate guidance and industry Early warning is still necessary, especially for ordinary farmers without any investment experience. This is like why rural homestead land is still not allowed to be bought and sold. What many policymakers worry about is that farmers will cash in their only land and then consume it quickly, eventually leading to a social crisis. It is understood that the local government has not responded to the problem of mask inventory in the market for the time being, and merchants of all sizes are still looking for a way out on their own. <br
