Alexei Davidenko on the “mask hunt”: for Ukrainian manufacturers, this is a real chance to enter export markets relatively easily

The owner of the Medtekhnika store chain on the mask boom and opportunities for Ukrainian business.

The coronavirus epidemic has caused a serious shortage of masks and a buying frenzy for a product that, at first glance, is not the most in-demand in normal times. Today, it is practically impossible to find disposable three-layer masks in Ukrainian pharmacies, and the same problem exists worldwide. 

TK Media spoke with Alexei Davidenko, owner of the Medtekhnika store chain, about what is happening in the “mask market” and found out how much the price has risen and how effective masks really are.

— At the end of January, you wrote that there was a frantic demand for masks and thermometers on the market. A month later, has demand fallen or is the panic continuing?

— Demand has grown, but there are no masks left. If a month ago there was a buying frenzy and they were still available, now everyone is looking for something that no longer exists.

— How much has the price risen? For example, how much did a million three-layer masks cost on the wholesale market in calm times, and how much do they cost now?

— In peacetime, one mask at the factory costs 0.03 cents. Wholesale, after shipping and taxes, it is 0.50 kopecks. Retail, it is 1-2 hryvnias.

At the moment, factories are not shipping them at all. Wholesale prices start at 5 hryvnias, but they are not available. Retail prices range from 5 to 25 hryvnias apiece — this is in Ukraine. In Russia, a mask currently costs 100 rubles at retail. In France, it is 1.5 euros. But there are none there either.

— Who is the main buyer now? China?

— The whole world. We are practically the only ones who have not banned exports. All the main buying frenzy — is purchasing here in order to sell there.

— How effective are ordinary three-layer masks in general?

— A mask is needed by someone who is sick, so they do not spread the virus. But in a situation where no one knows who exactly is sick, it is better for everyone to wear one. A three-layer mask is, of course, the simplest, but it is also suitable for basic protection of the nasopharynx.

— Who produces masks in Ukraine? Who are the main players by volume?

— As far as I know, there is only one Ukrainian manufacturer, Slavna. But the raw materials still come from abroad, so production volumes are limited. As for the players, every self-respecting medical wholesaler imports masks from Asia. But if in peacetime Ukraine used no more than 5 million masks a year, now, judging by the demand requests, people are ready to buy that volume per day. 

That is what concerns exports. Domestic consumption, judging by our store network, has grown 20 times. If previously people bought 1-2 masks, now they are buying a pack in advance — 50 masks. It is logical that this is also a frenzy. Before, 20 people would have been enough, but now one person takes them all.

— You wrote about a window of opportunity for Ukraine and domestic manufacturers. Apart from mask production, which areas should entrepreneurs pay attention to right now?

— Actually, you should not pay attention to masks. It is an episodic hysteria that will end quickly. Export areas will be in demand in all sectors where we make products that are competitive with China in similar quality and at a similar price. The markets of Europe, America and the Middle East are now suffering greatly from total dependence on purchases from China. Buyers from all over the world are already looking for alternatives in all sectors and in other markets. 

For Ukrainian small and medium-sized manufacturers, this is the most real chance in the last decade to enter export markets relatively easily.

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You can get operational news about the spread of the coronavirus in the Telegram channel Coronavirus Online.

Vladimir Koval, TK Media