Protective Masks and COVID-19: Demand and Supply Revisited

• High demand due to federal and state requirements
• Long-term production capacity of 10 billion protective masks
• Negative outlook for fashion industry diversified into mask production?
• Protective mask market opportunities

High demand due to federal and state requirements

According to the Protective Mask Production Report compiled by Germany Trade & Invest’s Chemicals & Healthcare team in summer 2020, short-term demand for protective masks in Germany could be as high as around 10 billion per year subject to infection rate development, availability of medications and vaccines as well as legal obligations to wear professional protective equipment (PPE). As of early 2021, demand for masks has developed roughly as expected, with the availability of vaccines close at hand albeit taking longer than expected. The wearing of filtering face piece 2 (FFP2) or surgical masks has become mandatory for the general public when using public transport, car pools and when going grocery shopping. Employers must provide home-office options and free protective mouth and nose covering or FFP2 masks for those employees who need to come to work. Risk patients and individuals 60 years of age and older have received vouchers for FFP2 masks from the government, with pharmacies handing out masks upon request.

Long-term production capacity of 10 billion protective masks

Germany is on track with its incentives programs for protective masks made in Germany. Innovative products and manufacturing processes – with up to 50 percent of investment costs eligible for cash grants – can be co-funded through to the end of 2025. Manufacturers in Germany have successfully applied for production funding equivalent to production capacity of around 7.5 billion protective masks per annum. Production facilities generating FFP2 mask and surgical mask volume of 1.8 billion and 5.7 billion pieces respectively will soon increase supply to the general population while reducing dependency on imports. The long-term vision is to have local production totaling 10 billion pieces per year. This means that significant opportunities still exist for international manufacturers to invest in additional on-site capacities of their own and contribute to meeting demand.

Negative outlook for fashion industry diversified into mask production?

In early 2020, immediate demand for protection led to 40 or more percent of member companies in Germany’s textile and fashion industry association to diversify into the protective mask sector – and more specifically into textile barriers known as “community masks.” A plethora of mask varieties – in large part high-price items with innovative features including self-disinfecting surface materials and high reusability – have  effectively become banned from use in shops, at work and in public transport as a result of the mandatory switch to FFP2 and surgical masks. Together with availability of low-price medical grade personal protective equipment at all major supermarket discounter outlets, public appearance has changed drastically, though only recently. However, the return of community masks may well be expected once regulation requiring the use of medical grade protective equipment is terminated.

Protective mask market opportunities

There are significant export and partnering opportunities available to international companies seeking to enter the protective mask market. Germany is Europe’s leading medtech and PPE export nation – over 50 percent of exports go to other EU member countries. Established and novel producers of protective masks can also enter into partnership with a diverse range of equipment manufacturers, intermediate product suppliers, R&D establishments, and technology clusters as well as local authority initiatives. Up until 2025, manufacturers investing in innovative mask production lines located in Germany can benefit from attractive financial incentives including 50 percent cash grants for innovative surgical masks and FFP2/FFP3 masks.