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Chinese manufacturers are putting protective masks on the market for less than a penny apiece. This isn’t possible while still making a profit, says Brent Dillie, the chief revenue officer of Premium-PPE, an American mask manufacturer.
Selling products below the cost of manufacturing them is known as dumping, and is a tactic often used to put foreign competition out of business. It is also illegal.
Taisei Hoyama reports in Nikkei Asia, writing:
American manufacturer Premium-PPE has seen its monthly mask production plunge nearly 90% from last year’s peak, falling to 4 million to 5 million.
Idle equipment and piles of unsold merchandise fill its factory in the city of Virginia Beach. Its workforce, once boasting as many as 280 people, has shrunk to about 50. And the company blames cheap imports from China for its reversal of fortune.
“Selling the mask for less than a penny is not possible,” said Brent Dillie, the chief revenue officer.
Premium-PPE is among the U.S. mask makers losing out to Chinese rivals that Dillie and his peers accuse of flooding the market with products priced below cost — a problem that connects to debates over national security and the cost of self-sufficiency.
The business that became Premium-PPE sold electronic cigarettes before pivoting to disposable masks in March 2020 as the coronavirus pandemic spread like wildfire in the U.S. With medical personnel having to reuse masks in the face of a grave shortage, its products flew off the shelves.
Each box of masks declares the products are “Made in USA” in large letters, as a mark of quality. Demand has not vanished, even with the country’s progress on vaccinations. But few consumers are willing to spend 10 times as much for an American alternative to a Chinese-made mask.
The U.S. has nearly 300 million masks sitting unused in warehouses, and producers are going under one after another, according to the American Mask Manufacturer’s Association, which includes small and midsize companies. The group, chaired by Dillie, sent a letter to President Joe Biden in May asking for the government to buy up this inventory, among other support measures.
Maintaining mask production in the U.S. to prepare for future pandemics is “a matter of national security,” the letter said. The group said imported Chinese surgical masks now sell for an average of 1 cent each.
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