More support to PPE makers in COVID-19 times

September 06, 2020 | 12:31
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Domestic personal protective equipment (PPE) production is having an unprecedented opportunity to leapfrog in the global supply chain through continuous capital injections from credit institutions.
more support to ppe makers in covid 19 times
Vietnam is currently home to about 200 PPE manufacturers

PPE producer Garment 10 Corporation (Garco10) recently received a $4.3 million loan from UK-backed Standard Chartered Bank (Vietnam) for PPE production.

Earlier, the British lender also provided $2.7 million to Bac Giang LGG Garment Corporation to feed the latter’s fabric mask production needs.

“The credit package from Standard Chartered helps us expand the production of face masks and other protective gear to keep up with ever-increasing demands in many countries hit hard by the pandemic as well as in the domestic market,” said Luu Tien Chung, CEO of Bac Giang LGG.

A big textile apparel export producer, since the early second quarter, Garco10 had secured high-value export orders from business partners in the EU and the US for medical face mask and protective gear.

In the first seven months of this year, Vietnam exported more than 711 million medical face masks of diverse kinds to global markets, according to figures from the Vietnam General Department of Customs.

As apparel products saw a sharp decline while PPE orders rose sharply, the company has invested in a standard medical face mask production line for long-term export production.

Along with a $52 million deal with a big foreign partner to produce 400 million face masks, the company received an order from a US partner for 20 million fabric face masks and a German partner for two million fabric face masks and six million medical face masks.

“We have invested in a cutting-edge production line to meet EU and US export standards and our face mask production for export will be maintained for the long-term,” said Than Duc Viet, Garco10 CEO.

Experts assumed that Vietnam has enormous potential for PPE production and is facing an unprecedented opportunity to take the lead in the face of the current COVID-19 pandemic.

During the first wave of COVID-19, many Vietnamese companies were considered as alternative suppliers for the US and the EU as other sources were cut short. The US ordered 450,000 sets of Tyvek protective suits which were manufactured by DuPont in Vietnam.

FedEx took charge of transporting the raw materials from a production factory based in Richmond, US to Vietnam for production at a production facility based in the port city of Haiphong.

Prof. Eric Mottet at Quebec University (Montreal) highlighted that the current time provides a big opportunity for Vietnam to get ahead in producing PPE such as face masks, gloves and other medical protective instruments.

Vietnam is currently home to about 200 PPE manufacturers. Amid the burgeoning demand for PPE products across the globe, many businesses have been running at full throttle in the past six months.

Taking advantage of its certifications for meeting US and EU export standards, VRG Khai Hoan JSC – based in the southern province of Binh Duong – currently exports 80 per cent of its products to these two markets while the rest fees the domestic market.

Thanh Cong Textile Garment Investment Trading JSC (TCM) has also seen a sharp jump in revenue and profit, mainly due to the export of face masks made from anti-microbial cloth and medical protective gear.

This year, the company is set to rake in VND3.78 trillion ($164.35 million) in revenue and VND188 billion ($8.17 million) in after-tax profit. In the first half, TCM reported VND1.738 trillion ($75.57 million) and VND115 billion ($5 million) in revenue and after-tax profit, respectively.

However, manufacturers are cautioned to stay alert and not just jump on the bandwagon without careful consideration.

“Unlike conventional garment production, to minimise risks, firms shouldonly make products after receiving orders and only hand them over to customers after getting full payment,” said the director of a renowned garment export firm.

In the first seven months of this year, Vietnam exported more than 711 million medical face masks of diverse kinds to global markets, according to figures from the Vietnam General Department of Customs.

According to the World Health Organization (WHO), in 2020, the world will need 2.2 billion surgical masks, 1.1 disposable gloves, 13 million protective goggles, and 8.8 million face coverings for COVID-19 prevention.

Albeit China is still the biggest supplier of PPE products in the world, the market is more-or-less evenly distributed among competitors, including Vietnam.

By Thanh Thuy

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