Apr 03, 2020 - 2 minutes read time
Late on Thursday night, Trump announced he had signed a Defense Production Act to compel 3M to produce face masks, specifically for the N95 respirator. The Defense Production Act, which was passed in 1950, grants the president the power to expand industrial production of key materials or products for national security and other reasons. “We hit 3M hard today after seeing what they were doing with their Masks. ‘P Act’ all the way.’ Big surprise to many in government as to what they were doing – will have a big price to pay!” tweeted Trump.
What makes a great TV announcement won’t alleviate shortages. An N95 mask is a respiratory protective device designed to achieve a very close facial fit and efficient filtration of airborne particles. It’s the most protective face covering available for healthcare workers. Leading brands include 3M, Medline, and Honeywell. But the market shortage is due to the raw materials, not the final assembly. It requires a once-obscure material called melt-blown fabric, an extremely fine mesh of synthetic polymer fibers.
“We’re talking about fibers where one filament has a diameter of less than one micron, so we are in the nano area,” said Markus Müller, the sales director at German company Reicofil, a major provider of melt-blown machine lines. The shortage is so severe that even in China, the price for one ton of melt-blown fabric was once under 6,000 dollars; today it’s “about 60,000 dollars,” said a member of the sales staff from a major supplier of melt-blown based in Hubei province, the center of the virus outbreak in China.
That’s why compelling 3M won’t increase the supply of N95, unless there is a corresponding increase in the raw material. But setting a single machine line takes at least five to six months, judging by the German standard. But here’s the good news for the White House: new suppliers are coming online.
On March 6, Sinopec Corp, China’s leading energy and chemical company put its first melt-blown non-woven fabric assembly line into operation at its Yanshan factory in Beijing. Lv Dapeng of Sinopec said, “It normally takes about half a year to complete the construction of a 10,000-ton melt-blown fabric factory – We have done it in 12 days, 48 hours ahead of schedule.” Why the rush? “Saving 48 hours means that we can produce an extra 12 million disposable masks,” said Lv.
There is no doubt about American ingenuity and their capacity in dealing with breakthrough innovation from biopharmaceutical to advanced materials. But the shortage of N95 also highlights a weakness in its ability to scale proven solutions at speed, the kind of speed that China, or more generally, East Asia is particularly good at. The real solution to a global pandemic demands global cooperation.
As for 3M, the demand surge for respiratory products also has little positive impact. The industrial conglomerate saw a tiny potential of $250 million in revenue. In 2019, 3M made 32 billion in sales. With price control and additional investment in equipment, Trump’s order might well be a losing proposition for the firm.
Originally published on Forbes
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