Product Profile – PPE Kit (Personal Protective Equipment)

• PPE Kits Market is estimated to value over US$ 60 billion and register a CAGR of over 8% from the forecast period 2020 to 2025. In India itself, by the end of 2020, domestic demand of PPE kit of worth USD 1.4 USD billion will be generated.
• China is the largest producer of PPE finished products, as well as of many of the raw materials needed to manufacture these products. It produced an estimated 50% of surgical masks globally (estimated to be 20 million masks a day, pre-pandemic).
• Between March to May 2020, India’s cost of manufacturing one PPE kit has plummeted by 30%. Two months back, the cost of manufacturing one PPE kit was Rs 1,100, which now ranges between Rs 800- 900.
• The World Health Organization (WHO) estimated that 89 million medical masks are required for the COVID-19 response each month, along with 76 million gloves and 1.6 million medical goggles. To meet rising global demand, WHO estimates that industry must increase manufacturing by 40% and has urged governments to act quickly to boost supply.

PPE Kits

Since the COVID-19 outbreak, the supply chain for personal protective equipment (PPE) has proved to be inadequate to meet the surge in demand. Constraints in supply and logistics, including export bans for PPE and key materials, have come into clear focus.

What is a PPE KIT?

Personal Protective Equipment (PPE) is specialized clothing or equipment worn by professionals across industries for various kinds of protection. In the medical field, these kits are used by doctors and healthcare personnel for protection against infectious surfaces or infected persons. PPEs prevent contact with an infectious agent or body fluid that may contain an infectious agent, by creating a barrier between the potential infectious material and the health care worker.

The risk of transmission of coronavirus can be reduced if use of PPE is done ubiquitiously. PPE kit is not a single product, but it is a set of wearing accessories. According to the WHO, PPE kits relevant for COVID 19 include gloves, medical/surgical face masks, goggles, face shields and gowns, as well as items for specific procedures-filtering facepiece respirators (i.e. N95 or FFP2 or FFP3 standard or equivalent) and aprons. Since the components of PPE kit are different products at individual level, their HS Codes are also different.

i. Textiles masks including surgical mask/face mask made from non-woven textiles are under HS Code 630790.
ii. Gas masks with mechanical parts or replaceable filters for protection against biological agents are under HS Code 902000.
iii. Protective spectacles and goggles are placed under HS Code 900490.
iv. Plastic face shields (covering more than the eye area) are placed under HS Code 392620.
v. Gloves are under HC Code 401511, 401519, 611610, 621600.
vi. Protective garments for surgical/medical use like coverall are under HS Code 621010.
vii. Safety footwear as a part of PPE Kit are placed under HS Code 640110, 640230, 640340.
viii. Head Cover – HS Code 650610

PPE kits market is estimated to value over US$ 60 billion and register a CAGR of over 8% from the forecast period 2020 to 2025. In India itself, by the end of 2020, domestic demand of PPE kits is expected to be worth US$ 1.4 billion as per Apparel Export Promotion Council’s estimate.

Demand for PPEs has reached unprecedented levels as COVID-19 has spread globally and governments have sought to prepare and respond. National stockpiling strategies by affected countries have further driven up demand. During quarter 1 of 2020, the United Nations has delivered over 6.4 million gloves, 1.8 million surgical masks, and 1 million gowns to countries across the world. However, an enormous gap remains between demand and supply conditions in lower income & middle-income countries.

The World Health Organization (WHO) estimated that 89 million medical masks are required for the COVID-19 response each month, along with 76 million gloves and 1.6 million medical goggles. WHO itself has so far shipped nearly half a million sets of personal protective equipment to 47 countries, but supplies are depleting rapidly. To meet rising global demand, WHO estimates that industry must increase manufacturing by 40% and urges governments to act quickly to boost supply. Supply availability has been hampered by a number of issues, including export and travel restrictions by some producing countries, and lockdowns that have forced suppliers to (temporarily) shut down.

PPE market overview

PPE kit manufacturing in Asia and the Pacific region is significant with highest share of production. Prominent manufacturers operate in China, while the Republic of Korea remains among the most significant pharmaceutical manufacturing markets, and Singapore is a regional hub for international pharmaceutical companies. Most of the raw materials and inputs used to produce PPE are outsourced to low-cost suppliers. Production of these items often requires imports of raw materials such as cotton fiber, polyester, and polyamide produced by different manufacturers around the world. These are processed by protective clothing manufacturers for sale to end users.

China is the largest producer of PPE finished products, as well as of many of the raw materials needed to manufacture these products. It produced an estimated 50% of surgical masks globally (estimated to be 20 million masks a day, pre-pandemic). Taiwan alone makes up 20% of the global supply of face masks, while other countries with PPE production capacity include India, Japan, Korea, Malaysia, Mexico, Thailand, US, and several European countries. China reportedly boosted the production of masks more than five-fold earlier this year, providing a daily production capacity of 110 million units and has likely increased production further since that time

In terms of revenue, North America leads the chart with 33% of global revenue followed by Asia Pacific and Europe with 28% and 22% of revenue share respectively. The global market for PPE in the health sector was estimated to be worth US$ 2.5 billion in 2018. Gloves have the highest share of sales revenues at 25%, followed by suits or coveralls at 22%. Face masks and head covers are at third place with a share of 14%.

Source: Mordor Intelligence, 2020

Source: Mordor Intelligence, 2020

COVID-19 PPE Market Situation

The current scenario of demand and supply of the PPE market changes on a daily basis due to several reasons, which include panic consumer behaviour, uncertainty of pandemic phase, equivocal understanding of COVID 19 vaccine and heterogeneity in handling the severity of coronavirus.

It is characterised by extremely high global demand as the outbreak spreads across regions and territories. The market is also characterised by multiple government bans on exports, or legislation that creates barriers to trade including on raw materials necessary for PPE production. For Instance, during March, the European Commission decided that no exports of PPEs destined for outside the EU should proceed without the export authorization from the manufacturing member state.

Initially, there was very limited coordination and virtually no hindrance to paying high prices. Competition and speculation from multiple buyers, intermediaries, and traders further exacerbated the market challenges. The surge in demand and pressure on supply chains has also resulted in severe constraints on the supply of raw materials, especially for N95 masks, surgical masks, and medical gowns, which are the products in highest demand (given their importance for frontline healthcare workers). Considering the demand and supply imbalance, manufacturers needed advanced payments from buyers to secure orders for raw materials and to reserve manufacturing capacity.

Indian Market Scenario for PPE Kit

There will be a domestic demand of Rs 10,000 crore (US$ 1.4 billion) for the next one year. Internationally there will be US$ 60 billion business till 2025, whereas India has done only US$ 260 million so far last year. This clearly reflects the untapped potential India has which is undoubtedly an opportunity.

There is a very strong anti-China sourcing sentiment going on right now and this is an opportunity for India to capture. Between March to May, India’s cost of manufacturing one PPE kit plummeted by 30%. Two months back, the cost of manufacturing one PPE kit was Rs 1,100, which now ranges between Rs 800-900. Currently the exports of PPE kits are banned, but manufacturers and exporters are gearing up for producing one lakh PPE kits daily with the standards defined by WHO.

BIS (Bureau of Indian Standards) modified the standards of PPE last month to meet it up to the requisite standards specified by WHO and EU. PPE kit materials needs to be both fluid- and virus-resistant and breathable to ensure that doctors working during the summer months without air conditioning are comfortable. To ensure that the PPE kits are of good quality, the government has now designated at least seven laboratories that can evaluate the kits.

These labs check gloves for any leakages and tensile strength. The protective clothing is checked for the seam strength, resistance to fluids, resistance to punctures and tear and resistance to microbes. The masks and head-cover respirators are checked for functioning of inhalation and exhalation valves and field of vision, among other things.

Post the COVID-19 pandemic, availability of adequate PPE supplies is expected to emerge as a key priority for all nations, which will be a shot in the arm for players. With scale benefits coupled with adherence to norms and favourable competitive scenario, India has a major opportunity to capitalise.

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Bala
Bala
2 months ago

This article is more insightful. I have a case study of PPE Kit Detection Using AI Hence this will use for you to analyse

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