Face Masks

Face Masks Global Market Outlook:

• The global market size is expected to be 10.2 billion in 2021, growing at a rate of 21 percent, due to the rising consumer awareness regarding COVID-19 has been creating a strong demand for the product, most notably for personal use

• The face mask market is majorly driven by the health care professionals that used these products on a daily basis for attending patients or perform surgeries

• To support the COVID 19 pandemic medical supplies (face mask) shortages across regions, all the suppliers are operating at ~100 percent of their installed capacities to meet the demand

Face Masks Cost Structure Analysis

• Cost of raw material contributes to approx. 50–65 percent of the total cost of mask production, it also varies with the type of raw material and regions. For a mask manufacturing company, the raw material, such as spun bond fabric 3 layer/ear loop/nose bar and elastic belt are the components that play a major part of the overall operating cost

• The cost of machinery has increased by 3 times and these equipment can produce more than 10,000 face masks. Also, in Malaysia, 600 percent surge in the raw material price for face masks has been reported during the current COVID-19 pandemic period

• Due to the increase of the price of raw materials, especially with unwoven fabric, and adding incentives for quick production expansion, the unit cost of a product increased

• China produces almost half of all melt-blown fabrics in the world. These fabric are frequently made from polypropylene resins, and is the most essential material for manufacturing of face masks

• According to the Indian Technical Textiles Association (ITTA), the cost of spun bond fabric witnessed 22 percent hike in the last one-and-a-half months (July-August 2020), the cost of melt blown fabric increased by 30 percent to 400 percent, whereas the cost of nose wires increased by more than 900 percent

Porter's Analysis on Face Masks

• Face masks is an essential part of PPE within the medical sector and demand is continuing to rise, due to COVID. Various countries have also made it mandatory to use face masks in public places, which is expected to further drive the demand

Supplier Power

• The supplier market for face masks is highly fragmented, with over 100 suppliers present globally, with most of them supplying face masks

• There are various types of face masks available with the suppliers, such as Respirators (N95, N99), Surgical masks (2 ply, 3ply), etc.

• The supplier power varies from low to medium for face mask suppliers

Barriers to New Entrants

• Significant initial capital investment for setting up of factories and machineries, coupled with regulatory requirements, such as NIOSH, CE, EN 14683 and ISO 13485 capabilities, are keys to produce face masks

• In Q1 2021 new suppliers or entrants are uncertain about demand post-pandemic this has discouraged other companies from entering the market

Intensity of Rivalry

• Manufacturers are also continuously expanding capacity by introducing additional production lines to cater to the demand

• –For instance – Honeywell announced in August 2021 that they are planning in hiring 500 in Phoenix to make Millions of N-95 masks each month

• The above trends leave the intensity of the rivalry as high among suppliers

Threat of Substitutes

• Face shields are transparent physical barriers and are emerging as an alternative to regular face masks

• CDC does not recommend use of face shields as a substitute, as they do not serve as an efficient barrier to reduce transmission of droplets

• The threat of substitutes is low for face masks

Buyer Power

• Gap in supply–demand of face masks, along with absence of better alternatives, has resulted in less buyer bargaining power in the medical industry

• Over the years, the PPE manufacturing have been outsourced to the APAC, specifically China, leading to lower bargaining power with buyers during global supply disruptions, due to COVID