The pandemic has changed the economic situation, especially companies that have built a new mask factory. Before Covid-19 hit, the US imported a lot of personal protective equipment needed by healthcare providers, especially from Asia. Several US companies are spinning into the crisis, such as the liquor company that makes hand sanitizers and the plastic company that makes face shields. But one item that is still in limited supply is the N95 face mask, which provides high levels of filtration of airborne contaminants and is strictly regulated by the US Government.
Seizing the opportunity, Dan Izhaky, president of United Safety Technology Inc, risked US $ 4 million for his startup to open a new N95 mask factory which may be ready in a few weeks. He hopes the pandemic will make Americans willing to spend on high-quality face masks from his new factory being built on the outskirts of Los Angeles.
While the factory is still equipped with machines, Izhaky's goal is to make one million masks a day when it becomes operational. He said that if they get approval from regulators immediately, the plant can deliver the amount by the end of the second quarter.
However, building a new mask factory during this pandemic is not without risks. Izhaky faces big questions about what happens after the pandemic.
“The big question we face is what happens after the pandemic. When you have a hospital administrator or whoever is responsible for buying and looking at the US-made masks that are more expensive, "Izhaky said.
Prices of many types of protective equipment continue to rise due to shortages, but once the market returns to normal, Izhaky estimates the prices of masks are about 30 percent more expensive than Chinese masks, or around 1.15 dollars each.
Izhaky hopes, but is not sure, that the pandemic will make Americans more willing to pay premiums, or that US government policies will mandate more domestic sources that will benefit his business. The upcoming actions of President Joe Biden's administration, including an executive order aimed at increasing the production of a wide variety of goods in domestic factories through the Buy America program, have made him more optimistic.
Other domestic producers are likely to face similar challenges, including industrial giants that will compete with Izhaky. For example 3M Co, which has doubled domestic production of N95 masks since the start of the pandemic, expanded its factory in South Dakota and employs 300 workers and now produces nearly 100 million masks a month in the US.
Furthermore, Honeywell International Inc has opened several new locations in the Phoenix area to manufacture N95 masks. Honeywell spokesman Eric Krantz said his company had converted a large part of the plant in Rhode Island that also made safety glasses. Krantz said Honeywell does not see the expansion as a risk.
“We believe there will continue to be demand for high quality respiratory protection products. We have made a smart and strategic investment in expanding our N95 production, "he said in an email.
However, many smaller manufacturers are not so sure. AmeriShield CEO Vitali Servutas, for example, built a factory that makes disposable surgical masks instead of N95 masks in Virginia last year in response to the crisis.
"China is subsidizing their face masks, so every manufacturer faces a challenge in competing with China after the pandemic," Servutas said.
David Sanford, the brigadier general who directs the supply chain advisory group at the Department of Health and Human Services that handles the Covid-19 response, has helped Izhaky and other manufacturers work through the process of getting certified and connecting to domestic distributors of medical goods. He said the new Izhaky plant was the kind of project the US needed to push.
"But there is always a risk," said Sanford.
He added that there are ways the government can support businesses like this, apart from providing direct contracts to the government to buy goods at higher prices. Requirements for purchasing US-made protective equipment can be included in reimbursement for Medicare and Medicaid, for example.
Making masks is considered not difficult. The process is highly automated and doesn't require expensive clean space. However, getting a reliable supply of materials, especially the special coating of the filtration material that makes them effective, is a challenge.
“You can buy a face mask machine for a few hundred thousand dollars and get up and running in 90 days. It's happening all over the world, ”said Sara Greenstein, CEO of Lydall Inc, a US material producer that has agreed to supply the Izhaky operation.
Lydall was assisted by federal funding that was provided at the start of the crisis. The company has nearly three times the capacity at a single US plant capable of making the material. With competition for Chinese materials expected to continue to sell at substantially lower prices after the pandemic, Greenstein has high confidence there will be government-led programs in the United States and Europe to purchase products made there to help keep those supply chains stable and competitive.
At the United Safety Technology plant in La Verne, engineers are busy perfecting the first machine that will eventually produce a cup-shaped mask. Edward Zheng, Izhaky's partner in the venture, said their goal is to get all the ingredients domestically, with the main exception, namely the machines that make masks at the factory are imported from China.