The Effect of COVID-19 on Personal Protective Equipment (PPE) Supplies

By: Keith Schneringer  |  May 5, 2020

Part two-of-three series analyzing the impact of COVID-19 on the Jan/San industry.

• Part One: Supply Chain Survey and COVID-19 Disruptions
• Part Two: The Effect of COVID-19 on Personal Protective Equipment (PPE) Supplies
• Part Three: The Ongoing Demand for Hand Sanitizers, Disinfectants and Toilet Paper – Oh My!

In the United States, American shoppers and businesses have been stocking up on items such as face masks, gloves, hand sanitizers, disinfectants, and toilet paper (among other items), with the subsequent and ongoing demand consistently managing to successfully outpace available supply.

While countries, businesses, factories and warehouses where the raw materials and supplies are produced and manufactured manage periodic shutdowns until a vaccine is available, the probability of lengthy on and off disruptions to the global supply chain will cause many of these items to be in short supply for quite a while. As mentioned in the previous article "Global Supply Chain Impacts of COVID-19."

Some of the most important equipment needed by frontline workers has been in limited supply from the beginning. Personal protective equipment (PPE), such as face coverings and masks, shields and gloves, are being used by medical staff and first responders, as well as other essential workers: environmental services (EVS) staff, janitors, grocery store clerks, delivery personnel, garbage workers, food and agricultural workers, warehouse workers, and more. As stay-at-home orders start lifting, there will be an even greater demand for these products.

PPE – Face Masks

Since the start of the COVID-19 outbreak, severe and mounting disruptions to the global supply of PPE like face masks and gloves – caused by rising demand, panic buying, hoarding, and misuse – has left healthcare workers ill-equipped to care for patients, and has also led to a big surge in prices, according to the World Health Organization (WHO).¹

One of the initial causes for this disruption in availability of PPE happened at the epicenter of the burgeoning pandemic, as the Chinese government moved to corner the global market² for these products in early January and February, just as the world was beginning to fully grasp the extent of the new coronavirus threat.

It is estimated that from January 24 to the end of February, the Chinese government purchased over 2.2 billion face masks on the global market.² Given the fact that over 50% of the global supply of face masks came from China before this pandemic crisis began in the first place, combined with the Chinese government commandeering all of their domestic production right away and then moving to purchase other available supplies from the rest of the world, followed by the ensuing competition between other countries for any remaining supply capacity once the virus began to spread throughout the globe, and it is easy to see in hindsight how there would now be a global shortage of PPE products like face masks.³

As this analysis is being written, availability of face masks has begun to increase slightly as China allows some excess inventory to be exported, and as additional manufacturing assets are being brought online throughout the world to increase production. Nevertheless, face masks are expected to continue to be in short supply in the coming months as governments and companies compete for a finite amount of available inventory.

PPE – Gloves

Face masks are not the only PPE product to experience this shortage in supply – the product category of gloves has also seen a dramatic surge in demand in the U.S. and Europe as the COVID-19 outbreak has expanded from Asia and the eastern part of the globe to hit hard in the western part of the globe.

As a matter of fact, one of the largest glove makers in the world⁴ located in Malaysia has predicted an ongoing shortage as demand has increased more than 100% since the onset of the pandemic. Top Glove Corporation Bhd, which is responsible for approximately 20% of the total global production of gloves, has extended shipping times and increased capacity in an effort to cope with this surge in demand, according to executive chairman Lim Wee Chai.⁴

“Some customers panic order; normally they order 10 containers a month but now they suddenly increase to 20 containers,” Lim said. “Definitely there is a shortage. They order 100% more, we can only increase 20% so there is a shortage of about 50% to 80%”.⁴

To add an additional complication to this surge in demand, the entire country of Malaysia, where a large percentage of the world’s nitrile gloves are made, was on lock down by their government until April 14.⁵ Although many companies which manufacture gloves in this country have been allowed to have employees come back to work, conditions there remain challenging to achieve maximum manufacturing efficiency and output, and it is estimated that factories are only producing at around 50% capacity at this time.

And for a product category where purchase orders are typically placed with manufacturers in Asia three months prior to eventual delivery in the U.S., it will take some time to rebuild the domestic safety stock which has supplied and sustained the first wave of demand in Q1 2020 for healthcare facilities and other JanSan companies.

As this analysis is being written, availability of gloves is expected to continue to be tight for the next several months and prices are expected to rise as factories in Asia ramp up production to respond to the surge in demand, and as international, national, and state governments as well as the private sector compete on the open market for a finite amount of available inventory.

Sources:

1. World Health Organization (WHO) website, Shortage of Personal Protective Equipment Endangering Health Workers Worldwide, March 3, 2020
   https://www.who.int/news-room/detail/03-03-2020-shortage-of-personal-protective-equipment-endangering-health-workers-worldwide
2. National Review website article, Peter Navarro Claims China Tried to ‘Corner The World Market’ In Masks After They Identified Coronavirus Threat,
   April 6, 2020
   https://www.nationalreview.com/news/peter-navarro-claims-china-tried-to-corner-the-world-market-in-masks-after-they-identified-coronavirusthreat/
3. New York Times website article, The World Needs Masks. China Makes Them, But Has Been Hoarding Them, March 5, 2020
   https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html
4. Reuters website article, World’s Largest Glove Maker Sees Shortage As Coronavirus Fight Spikes, March 28, 2020
   https://www.reuters.com/article/us-health-coronavirus-malaysia-top-glove/worlds-largest-glove-maker-sees-shortage-as-coronavirus-fight-spikesidUSKBN21G04Z
5. VOA News website article, Malaysia Arrests Thousands Amid Coronavirus Lockdown, April 4, 2020
   https://www.voanews.com/science-health/coronavirus-outbreak/malaysia-arrests-thousands-amid-coronavirus-lockdown