HK mask makers face challenging times

money-glitz | Staff Reporter 16 Nov 2020

Nearly 200 mask factories have been set up in Hong Kong since the pandemic, leading to a wave of overcapacity.

That follows a mask shortage at the beginning of this year which motivated a number of Hong Kong entities to establish their own production lines.

With a 24-hour production line, the daily output of masks per factory is about 86,000 pieces. The total daily output of local mask production is estimated to exceed 17 million pieces, which is more than twice the population of Hong Kong.

Meanwhile, the market price of a box of 50 masks is less than HK$100, which is a far cry from the HK$200-HK$300 asking price earlier this year.

Jason Poon Cheuk-hung, managing director of China Technology, has been manufacturing masks since March this year. However, he has halved the output of his factory since mid-September.

He points out that a large number of inferior masks have been imported from the mainland to Hong Kong, making it difficult for the local industry to survive. "The lowest cost of making masks in Hong Kong is more than HK$1," says Poon. "The mainland masks use poor-quality melt-blown fabric, and the cost could drop to HK$0.2. A box of 50 masks in the mainland is sold for HK$30, and there is a considerable profit."

Denis Huen Yin-fan, the founder of MasHker, says they mainly received pre-sale orders in the early stage of the pandemic, including supplies to large companies, and their factories needed to increase production capacity to meet demand.

But as the pandemic eased, many companies set up their own production lines and the number of company orders has greatly reduced.

"Back in the old days we had quite a number of company orders and we manufactured more than 100,000 masks a month," Huen says. "But now we can only rely on orders from individual buyers or old customers."

Huen says only 20 mask production lines are funded by the government. In order to apply for the second tranche of Employment Support Scheme, employers and employees need to have Mandatory Provident Fund accounts on or before 31 March 2020. However, as Huen and other first batch mask manufacturers started recruiting in April, they are not eligible to apply for the government subsidy.

Not only is there an oversupply of masks, but retail stores have also reduced the number of local masks on the shelves.

A local mask manufacturer, who did not want to be named, says that they tried to put their masks on the shelves in pharmacies, chain stores and supermarkets for months, but failed.

"They don't prefer masks made in Hong Kong," he says. "Retail stores would rather choose mainland or Japanese products as they are more profitable."

Besides retailing at some convenience stores, most of his masks can only be sold online.

To survive, mask manufacturers have looked at ways of transforming the business, with local manufacturer Good Mask launching colored masks in June.

Its chief executive says competition in the local business is fierce. To attract consumers, he believes there is a need to provide a range of colors and patterns.

Because the cost of using different colored melt-blown cloth is high, the owner of a medium-sized mask factory - who declined to give her name - found a new way to balance her expenses and revenues.

She has launched a package of 25 masks per box and limited the price to less than HK$100. "Many customers don't want to stock up on masks, and want to try different patterns," she says, adding the new package has been welcomed by customers.

Several local mask factories have recently rented shops in core business areas and opened specialized stores.

MyMaskFactory opened a concept store, MF Living, in Tsim Sha Tsui. It moves its production lines to retail points and gives buyers a first-hand experience in mask production.

The factory hopes to sell masks through a new retail method, while building a brand image at the same time. "We need to put creativity into the products and do something no one has done before," says the founder, surnamed Tong.

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