Home / News

News

One U.S. company's risky effort to build a new mask factory during COVID

One U.S. company's risky effort to build a new mask factory during COVID

 

LA VERNE, Calif. (Reuters) - Dan Izhaky is betting $4 million that the pandemic will change what Americans are willing to pay for high quality face masks from his new factory here in this suburb of Los Angeles.


It’s a risky wager.

Before COVID-19 hit, the United States imported much of the personal protection equipment needed by health care providers, mainly from Asia. Some U.S. companies pivoted in the crisis, such as liquor companies churning out hand sanitizer and plastics firms making face shields.

But one item that remains in tight supply is N95 face masks, which provide a high level of filtration against airborne contaminants and are closely regulated by the U.S. government.

Izhaky is president of United Safety Technology Inc, a startup that is poised to open a new N95 mask factory possibly within weeks. While the plant is still being fitted with machinery, his goal is to make 1 million masks a day when it’s up and running. Izhaky said if they get approval from regulators soon, the plant could be shipping that amount by the end of the second quarter.

“The big question we face is what happens post-pandemic,” said Izhaky, “when you have a hospital administrator or whoever it is that’s in charge of purchasing” and looking at U.S.-made masks that cost more. The pricing of many types of protective equipment remain elevated by shortages, but once the market normalizes Izhaky estimates his masks will cost about 30% more than Chinese masks, or about $1.15 each.

Other domestic producers are likely to face the same challenge, including industry giants Izhaky will compete with. 3M Co has quadrupled its domestic production of N95 masks since the start of the pandemic, expanding a factory in South Dakota and hiring 300 workers and now makes nearly 100 million masks in the U.S. a month. Honeywell International Inc has opened “multiple new locations in the Phoenix area” to make N95 masks, said spokesman Eric Krantz, and converted a significant portion of a factory in Rhode Island that also makes safety glasses.

Krantz said Honeywell doesn’t view the expansion as a risk.

“We’re confident there will be continued demand for high-quality respiratory protection products,” he said in an email. “We’ve made smart, strategic investments in expanding our N95 production.”

But many smaller producers aren’t so sure.

“China subsidizes their face masks,” so every producer faces a challenge in competing with China after the pandemic, said Vitali Servutas, CEO of AmeriShield, which built a factory that makes single-use surgical masks, not N95 masks, in Virginia last year in response to the crisis.

Izhaky hopes, but is not certain, that the pandemic will make Americans more willing to pay a premium, or that U.S. government policy will mandate more domestic sourcing which would benefit his venture. Actions by the incoming administration of President Joe Biden, including an executive order aimed at increasing the production of a wide range of goods in domestic factories through Buy American programs, have made him more optimistic.

David Sanford, the brigadier general who directs the supply chain advisory group at the Department of Health and Human Services working on COVID-19 response, has been helping Izhaky and other manufacturers work through the process of getting certified and connected to domestic distributors of medical goods. He said Izhaky’s new factory is exactly the kind of project the U.S. needs to encourage.

“But there’s always a risk,” said Sanford. He adds there are ways the government can support businesses like this, short of giving direct government contracts to purchase goods at higher prices. A requirement to buy U.S.-made protective equipment could be built into Medicare and Medicaid reimbursements, for instance.

Making masks isn’t that hard. The process is highly automated and doesn’t require a costly cleanroom. But getting a dependable supply of the materials, particularly the specialized layers of filtration material that makes them effective, is a challenge.

“You can buy a face mask machine for a few hundred thousand dollars and start it up in 90 days. That’s happening all over the world,” said Sara Greenstein, CEO of Lydall Inc, a U.S. producer of the material that has agreed to supply Izhaky’s operation.

Lydall, aided by federal funds provided early in the crisis, has nearly tripled capacity at its one U.S. plant capable of making the material. With competing Chinese material expected to continue to sell at much lower prices after the pandemic, Lydall CEO Greenstein has “high confidence” there will be government-led programs in the United States and Europe “to buy product made here to help keep that supply chain stable and competitive.”

At the United Safety Technology plant in La Verne, engineers are busy fine tuning the first of the machines that will eventually turn out cup-shaped masks.

Edward Zheng, Izhaky’s partner in the venture, said their goal is to source all the materials domestically, with a key exception: the machines that make the masks in the factory are imported from China.

Reporting by Timothy Aeppel; editing by Dan Burns and Edward Tobin

Protecting America's Frontline Workers with the Mobilize America Act

The pandemic has exposed a lot of national security problems with having to export essential items like PPE, pharmaceuticals and critical medical supplies. Over the years, companies have moved manufacturing operations overseas in order to save money but those decisions and the consequences are now being felt across the nation.

The American economy has been very unstable due to its reliance on foreign manufacturing and the ripple effects continue to be felt in many areas. The lack of domestic capabilities can be felt from the supply chain, to business operations that rely on parts from other countries and on front line heroes like health care workers that are relying on essential items like N95s and elastomeric respirators to keep them safe.

The Mobilize America Act is looking to improve national security and remove the US from having to rely on other nations for assistance. By increasing domestic manufacturing, not only will the US be able to help their own industries and citizens but they will be also be able to help out allies that need additional resources for their own national emergencies.

It’s not just large manufacturers that will benefit from this act but also small and medium size manufacturers as well. Manufacturers like United Safety Technology  (UST) are stepping up to help Americans across the country get essential things like PPE to prevent the spread of the virus and keep health care and front line workers safe. With the Mobilize America Act, companies like UST can increase manufacturing capabilities to help get more PPE into the hands of our front line heroes much more quickly which will save a lot of lives and minimize the impact of the virus on many industries.

America has the highest standards in the world so when you see a product that says “Made in the US” you know it has passed the toughest tests and meets or exceeds all industry standards. We saw that by relying on PPE from other countries like China, a lot of the same products did not pass basic safety tests and the money to buy and ship them to the US was wasted along with valuable time.

Due to not having enough essential products that are made in America, adversaries like China and Russia could take advantage of the situation and try and weaken and destabilize the country. The US can become a manufacturing super power again by increase domestic manufacturing and this will not only only help bring back millions of lost jobs but also bring back industries that were lost to countries like China and Mexico.

It will have a significant impact on more than just manufacturers because by bringing back manufacturing into the US, you also help stabilize the supply chain and provide additional jobs across the country and provide insurance and stability during a national crisis.

Since a lot of industries have had to rely on international supply chains and products that have become hard to find, many businesses could not continue to operate and many jobs were lost simply because resources were hard to come by. By bringing back manufacturing, you are protecting American jobs, the American economy and your are improving response times so you can guarantee a better outcome to any crisis.

The more domestic manufacturers there are, the easier it would be to ensure domestic supply in an emergency including natural disasters such as wildfires, earthquakes and hurricanes. If there is ever another pandemic, the US can turn to companies like UST to quickly protect Americans so that the virus can be quickly stopped right away so the virus does not get out of control. This would prevent the need to shutdown the economy as an alternative way to slow the spread.

With less uncertainty, the stock market would become less volatile and this would help keep the American economy stable while other economies crumble due to the lack of resources available in their country and the crisis getting out of control.

The small investment to help American companies improve their manufacturing capabilities will more than just pay for itself. During the next crisis, you will see the US respond faster and more efficiently then ever so we will not have to experience another crisis like the Covid pandemic,  America will again become the role model of other countries as well as a big exporter of essential items. Instead of relying on other countries, other countries would be relying on the US so America would have better control on global outcomes.