Taiwan PPE makers seeks growth beyond pandemic recovery

18, Oct. 2021

The respiratory face mask industry in Taiwan has seen expansion and innovation as global demand rose. (Photo: Medtecs International Facebook)
The respiratory face mask industry in Taiwan has seen expansion and innovation as global demand rose. (Photo: Medtecs International Facebook)

By Gloria Cho

TAIPEI, NNA - A huge global surge in the demand for disposable medical gears to combat the COVID-19 pandemic and changing market situations have prompted Taiwan's personal protective equipment (PPE) manufacturers to re-strategize their long-term growth after enjoying record sales in 2020.

Apart from the high demand from healthcare providers and the general public, the pandemic has mandated a large number of companies to comply with stringent safety standards.

Riding on the wave of strong performances in 2020, Taiwanese PPE producers have taken the opportunity to expand to new segments with some contract manufacturers launching their own brands to strengthen their position as they seek growth momentum beyond the pandemic.

They were concerned that sales of higher-margin products such as protective coveralls and isolation gowns for frontline medical staff declined this year soon after an initial spike in demand created by the rush to stockpile the items.

Among the companies that make such gowns are textile and garment manufacturers such as Makalot Industrial which responded to the call to make anti-epidemic products.

This year, leading PPE producer Medtecs International Corp. decided to shift its focus to growing its global stockpiling service as vaccine inoculation spreads after creating its own brand.

William Yang, deputy chairman, executive director and CEO of Medtecs, said, “We will continue to work with partners who possess health-related expertise and supply chain resilience to expand our global sales channels and sourcing ability. We will push forward with our strategy to build awareness of our brand both online and offline and seek stockpiling partnership opportunities in key regions around the world.”

The company supplies disposable medical masks, isolation gowns designed for flexible movements; coveralls tailored for frontline medical practitioners with whole-body coverage, as well as hospital support services.

Earlier in March, Medtecs’ subsidiary Medtecs (Asia Pacific) Pte. Ltd. formed a joint venture with ACO International Ltd. to build "a fully vertically integrated" product development, manufacturing, sales and distribution platform for PPEs.

“This will further strengthen the Group’s position as a leading PPE stockpiling provider and Asia’s first multi-national group procurement platform with one-stop shop capabilities,” the company said in a media statement.

The company is now in talks with key industry players to develop new product lines and broaden its PPE product range to include gloves, syringes, rapid test kits, and medical devices as it seeks to secure long-term supply contracts with major Global Purchasing Organizations (GPOs) that buy in bulk to achieve savings for various healthcare providers.

Waning orders caused the revenue of Singapore-listed Medtecs to drop sharply by 47.5 percent to $85.3 million in the first half of the year, down from $162.6 million a year ago. Net profit fell 52.4 percent to $18.5 million.

In contrast, its revenue last year grew by nearly six-fold from $69 million in 2019 to hit $400.3 million, with net profit soaring by an astronomical 11,196 percent to reach $131.7 million. This was helped by improved economies of scale and a higher proportion of Medtecs' own brands of products and PPEs being sold.

“After a record-breaking year in terms of revenue and profitability in 2020, the board is of the view that it will be a challenge to exceed the level of performance, but stable growth can be expected for 2021,” Medtecs acknowledged frankly in a press statement.

The coronavirus outbreak has not only enriched Medtecs’ coffers, but also driven the supplier to launch its own brand of products finally after over 30 years of expertise in the business.

They included the anti-viral line ‘Medtecs Shield’ that comprises masks, handphone cases and antiviral sprays and the ‘CoverU’ collection of head-to-toe protective items.

The company has also leveraged both online and offline channels to expand sales significantly.

The hospital service sector also saw a marginal improvement of 2.8 percent to register $14.7 million in revenue last year, due to higher linen consumption in Taiwan and Philippines, Medtecs said.

The company, which has a branch office in Singapore, operates 14 manufacturing facilities in Taiwan, Cambodia, the Philippines, and China, churning out 18 million gowns and coveralls, and 80 million medical masks a month. They are exported to about 30 countries.

Another Taiwanese PPE manufacturer, Derekduck Industries Corp,. has also seen a revenue boost due to increased demand for its Ultitec brand of protective gowns. Without disclosing details, Derekduck reported that its 2020 revenue went up by 50 percent. It is expecting a 30 percent growth this year.

As the pandemic continues to haunt the world with the demand for PPEs remaining high, the firm has raised its capacity by 30 percent this year. Solely based in China's Shandong province, its manufacturing plant now produces up to 600,000 coverall pieces every month.

With the Asian market accounting for 50 percent of its sales, Derekduck is determined to expand growth in the region.

“Solidifying our position in the Asian market, and striving to become a leading brand in the region is our major goal in the near future,” Derekduck and Ultitec managing director Jason Lin told NNA.

Other Taiwanese PPE manufacturers also contributed to efforts to contain the pandemic, with some doing so in innovative and interesting ways.

Motex Healthcare, an advanced medical products and PPE producer, has had to ramp up production of its award-winning and anti-leak diamond-shaped face mask as demand surged. It also produces a surgical face mask with a visor.

Taiwan Comfort Champ Manufacturing Co, which specializes in a wide range of medical masks, was licensed to fabricate 'sporty' masks featuring portraits of Taiwanese medalists competing at the Tokyo Olympic Games.

Among other leading Taiwan PPE producers is Mytrex Health Technologies, Inc. which makes the electrostatic filtration material used in medical masks.

Ten Quin Medical Supply Co. offers products ranging from sterilizing tablets to protective gloves and gowns, while Rite Safety Assoc. Corp is known for its own brand of Rite masks and coveralls.

According to a Global Industry Analysts, Inc. report, the global market for disposable protective clothing estimated at $4.2 billion in 2020 is projected to reach $8.2 billion by 2026, growing at a compound annual growth rate of 11.1 percent.

It said, "The market is witnessing strong influence from a number of factors including COVID-19, technological advances, volatile macroeconomic scenarios and international trade conditions. While substantial demand from the healthcare and foodservice industries is boosting revenues, depressing conditions in traditionally strong domains including oil & gas and mining are dampening profitability."

The research firm noted that the PPE market is receiving strong contributions from the protective clothing segment that covers garments mainly used in healthcare and heavy industries.

Another research company, Technavio, expects the global disposable respiratory masks market to show a decremental growth of $6.7 billion during 2021-2025, progressing at a CAGR of about 19 percent.

The global disposable surgical gloves market size was estimated at $8.2 billion in 2020. It is expected to grow from $9.1 billion in 2021 to $15.2 billion by 2026, according to Research and Markets.