Big Data Decoding China Mask Production Capacity To Ease Supply Constraints, Where Is The Key?

China has made great progress in the manufacture of masks. In the future, it is necessary to further strengthen relevant independent technologies and expand the market share of Chinese mask enterprises.

Wen Jie Wang Chunrui Zheng Weibin

At the end of 2019, a new outbreak of coronavirus pneumonia occurred in Wuhan. The epidemic spread to provinces and cities throughout the country, and it also led to the panic buying of masks by the public. According to relevant data, China is the largest producer and exporter of masks in the world. Its annual output accounts for about 50% of the world's total, and its largest daily capacity is about 20000000.

But obviously, due to the rapid spread of the epidemic, the sudden increase in public demand and the arrival of the Spring Festival holiday, the factory shut down and shut down, and so on, resulting in the supply of masks in short supply. In order to solve the shortage of masks, various provinces and cities have resumed production.

According to the data from heaven eye, a total of more than 21000 enterprises in China involve masks production and operation (including upstream and downstream related enterprises). Among them, Zhejiang, Shandong, Hebei, Beijing and Henan are the five largest provinces in China, accounting for 61.38% of the total number of masks in the country.

Shandong Zhejiang is a big province of masks.

However, these enterprises are not all able to manufacture medical masks, and there are few enterprises with the production of medical mask licenses. The number of enterprises in Shandong, Hebei, Beijing, Henan and Chongqing ranks the top five in the enterprises involved in the production and operation of medical masks (including upstream and downstream related enterprises).

These five provinces and cities involved in the production of medical masks accounted for 64.12% of the total number of medical masks in the country, of which the largest number of enterprises in Shandong, reaching 1754, accounting for 18.01% of the country. There are 400 masks manufacturing enterprises in Hubei Province, of which only 157 companies produce medical masks.

Figure 1: distribution of medical masks in business scope

The Beijing News think tank has also counted the number of companies that receive medical mask production licenses. According to the relevant data, there are only 559 medical masks licences in the country (9 licenses fail to correspond to specific enterprises), which are held by 353 enterprises. These enterprises are distributed in 25 provinces and municipalities throughout the country.

Among them, Henan, Jiangxi, Jiangsu, Hubei and Guangdong rank the top five. There are 68 enterprises in Henan Province, with 138 licenses, and 56 enterprises in Jiangxi Province, with 84 licenses. There are only 33 enterprises in Hubei Province, with 38 medical mask production licenses.

Chart 2: China's cities and counties have the proportion of medical mask manufacturers.

Through the above comparison, it can be generally seen that although Zhejiang and Shandong are more involved in the production of masks, the number of enterprises that have specific medical masks and licensed medical masks is not so clear. On the contrary, Henan, Jiangxi, Jiangsu and other provinces, although there are not many enterprises involved in masks, there are more enterprises with medical masks.

It can also be seen that more enterprises in Zhejiang and Shandong provinces mainly cover the upstream and downstream sectors of mask production and sales. However, it is also important to emphasize that these provinces facilitate the circulation and complementarity of production, sales and other sectors.

Figure 3: comparison of the number of different masks in China's major provinces and cities

Of course, the recovery of masks production capacity is not only directly related to the production of enterprises, but also with the supply of raw materials, especially in the current environment, the epidemic and the Spring Festival holiday caused great resistance to logistics.

Generally speaking, masks are made of non-woven materials, while medical masks are multi-storey structures, or SMS structures: both sides are single layer spunbonded layers, and the middle is single or multi-layer melt blown layers. In this regard, the Beijing News think tank has further analyzed the geographical distribution of enterprises that can provide non-woven fabrics and raw materials of melt blown cloth.

Sketch map of 4:SMS structure

In terms of non-woven fabrics, Zhejiang (32.04%), Jiangsu (12.12%), Hebei (10.32%) and Shandong (10.11%) are the largest number of four provinces with non-woven enterprises, accounting for 64.59% of the whole country. The enterprises that provide more important melted cloth for medical masks can offer less enterprises. The enterprises involved in melt blown fabrics mainly concentrate on Jiangsu (23.53%), Zhejiang (13.73%) and Henan (11.76%) provinces, accounting for more than 10%, accounting for 49.02% of the whole country. Hubei has 2465 non-woven enterprises, accounting for only 4.03% of the country's total.

Chart 5: distribution of non-woven enterprises in the scope of business

Fig. 6: distribution of enterprises involved in melt blown fabrics

From a comprehensive perspective, the distribution of enterprises from raw materials to production and operation has many enterprises in the Beijing Tianjin Hebei region and the Yangtze River Delta region, covering a wider range of upstream and downstream industries, and their industrial chains are relatively more perfect. Especially in the Yangtze River Delta region, it has a great relationship with the good foundation of traditional medicine. How much capacity can these enterprises bring?

The integrity of the industrial chain makes the Yangtze River Delta region more productive.

According to relevant industry reports, in 2018, China's mask industry output reached 4 billion 540 million, an increase of 17% over the same period last year. Moreover, in recent years, the output of mask industry has increased by more than 15% per year. According to this estimate, China's mask production will exceed 5 billion in 2019. Under the influence of new coronavirus pneumonia, it is expected that the output of China's mask industry will be further improved in 2020.

According to the information of the Ministry of industry and information, many enterprises were closed for vacation because of the Spring Festival holiday. But with the outbreak of the epidemic, many enterprises have gradually resumed production, and by January 29th, the daily production of Chinese masks can reach more than 8 million per day. And as many factories enter the 24 hours of continuous production, more and more provinces and cities mask production capacity has gradually resumed, it is expected to soon achieve, or even surpass the previous 20 million mask production capacity.

According to the collation of public information, as of the end of January, the daily production of Shanghai masks was the highest among provinces and municipalities throughout the country. It is reported that the city of Shanghai has 17 mask enterprises, has gradually resumed production capacity, can achieve 4 million daily mask production capacity.

Chart 7: the daily production capacity of the major provinces and cities mask (according to the public information, as at the end of January)

After Shanghai, Xiantao, Hubei Province, the mask has a daily capacity of 2 million 700 thousand. According to the Hubei daily news, there are 35 enterprises in Xiantao, and the largest number of them are in all cities in the country. Xiantao is the main production area of Hubei masks. It has the reputation of "China's nonwoven industry famous city". It produces about 400000 tons of non-woven fabrics annually, about 800000 tons of non-woven products per year, and exports nearly 1/3 of the country's total.

After that, Shandong, Henan, Zhejiang, Anhui and other provinces had more than 1 million masks per day. These provinces are also concentrated in the Yangtze River Delta and surrounding areas. It can be seen that the advantages of this region's industrial chain are brought about by production.

Of course, even with the recovery of 20 million masks per day, the number of cases confirmed by the new coronavirus pneumonia is still rising, and the demand for masks is still large.

But the rapid recovery of production capacity is no longer comparable to that in 2003. It can be said that China has made great progress in this respect. In the future, we need to further strengthen related independent technologies and expand the market share of Chinese mask enterprises.

Wang Chunrui and Zheng Weibin (Research Fellow of Beijing Smart City Research Institute)