The Coronavirus outbreak which began in China and has since spread across the nations of the world is a major headache for many stakeholders worldwide. The pandemic has wrecked a lot of havoc on the world economy all over. Developed nations across the world are trying all they can to make sure that the devastation caused by this virus is eliminated and at the worst reduced.
Different steps and strategies were put in place to reduce its transmission before a standard vaccine can be produced. Some of these strategies include physical or social distancing, daily and frequent washing of hands with soap and water, or sanitizing the hand with a hand sanitizer which contains at least 60 percent alcohol, and the wearing of Personal Protective Equipment (PPE). Pivotal among the Protective gadgets is the face mask.
The Center for Disease Control and Prevention has even made it essential to wear a face mask in the public. Different countries are putting up guidelines to ensure that their citizen complies with these strategies. There are different types of the face including cloth facemask, surgical, or medical mask, and the N95 mask.
Because of these guidelines, there has been an increase in the demand for facemasks the world over especially for N95 masks. To help with this the CDC has advised that the N95 respirators be reserved for medical personnel who are in dire need of these masks.
Similarly, major N95 mask producing companies have witnessed a rapid increase in the demand and sales of their protective products. It is not surprising as this may be attributed to the global fear of the coronavirus pandemic. These companies witness an exponential growth in the global demand for N95 masks especially in the first quarter of the year.
Because of the fear of contracting the virus, there have been reports of consumers stockpiling and panic-buying N95 masks and other face masks in many countries. This has resulted in a significant shortage of N95 masks in some of the markets.
Impact of the pandemic on the global market
The worldwide outbreak of the deadly coronavirus is estimated to significantly boost demand and consequently the production of respirator masks, particularly N95 respirators around the world. This is hoped to drive the global N95 respirators market size to grow by 382.90 million US dollars by 2024.
Among health workers such as doctors, nurses, first responders, and other health personnel, there has been an increase in demand for the N95 respirators mainly due to the outbreak of respiratory infectious diseases such as COVID-19 and the H1NI. This is because the respirators are useful in protecting these workers against exposure to small microns of particles of contaminants, bacteria, and viruses.
To make sure that these masks are readily available for these group of workers, health and healthcare regulating authorities around the world including the United States Center for Disease Control and Prevention (CDC), National Institute for Occupational Health and Safety (NIOSH) has advised that the N95 respirators be reserved for health care workers. Nonetheless, many individuals are not complying but are tirelessly seeking out the N95 respirators to reduce their risk of contracting the deadly coronavirus and curtail its transmission. Behaviors such as this are one of the factors that have significantly boosted sales from medical outlets and the increased demand.
When it comes to the production of face masks, China has until now been reputed to be the largest producer and exporter of facemasks in the world. Before the outbreak of the Coronavirus pandemic, China is the producer of half of the world’s mask and it has boosted its production nearly 12-fold since then.
According to reports from the Chinese Authorities, the country has undertaken a mobilization of wartime proportions to increase its output of surgical masks and respirators. The daily production of face masks increased from an estimate of 10 million at the beginning of February to 115 million at the end of the month.
Top manufacturers of N95 mask in 2020
Among the major manufacturers of masks in the world, today are companies such as 3M, Honeywell, Kimberly-Clark Corporation, Prestige Ameritech, Moldex Metric, etc. Prominent among these are the 3M and Honeywell production companies.
The 3M Company Also Known As Minnesota Mining and Manufacturing Company is a diversified American corporation manufacturing a wide range of products including abrasives, adhesive tapes, consumer electronic components. It was founded in 1902 as a small mining venture in Nothern Minnesota and headquartered in St. Paul, Minnesota.
The Company went public on the NYSE in 1946 a 3M before creating its International division in Australia, Brazil, Canada, France, Germany, Mexico, and the UK in 1951. It is a multinational conglomerate corporation operating in the fields of industry, worker safety, health care, and consumer goods. It is one of the world’s largest manufacturers of surgical masks, N95 masks, and face shields.
With the increasing demand for N95 respirators from healthcare professionals and first responders battling the coronavirus pandemic, It hopes to increase the monthly production of N95 respirators in the United States and also looking forward to the production of 2 billion respirators globally next year.
Honeywell is an American public-traded multinational conglomerate headquartered in charlotte, North Carolina. It primarily operates in four businesses; aerospace, building technologies, performance materials and technologies (PMT), and safety and productivity solutions (SPS).
It is a world-leading brand in personal protection equipment (PPE) products for a different working environment such as chemicals, vapor, and gas, wielding, airborne particulates, and contamination. Some of its top-selling products include non-disposable respirators, mask filters, cartridges, and N95 masks with valves and without valves.
Between 3M and Honeywell, which one is larger?
If you are taking into consideration which of the two companies you should go for. In terms of their protective products, they are at par but based on historical performance and the current dynamics in the market, 3M appears to be an attractive investment when compared to Honeywell International.
The global economy is expected to recess considering the current pandemic which will affect the capacity of consumers to spend, reducing the consumers’ spending power. This will affect both companies as they are both producing and selling companies. Though 3M is producing coronavirus products such as N95 masks, the profit from it contributes little to the company's general revenue and also will have little impact on its stock’s outperformance.
Honeywell on the other hand is expected to take a hit from the company’s aerospace business. This is because air travel is currently not performing at its best and the aerospace segments account for about 45% of the company’s total profits.
3M as a company has shown to be more resilient so far in the current crisis and expects an increase in profit from sales of healthcare products though it won’t be enough to motivate the company’s growth. Nonetheless, it is hoped to fare better than Honeywell whose aerospace business is suffering a major setback.
Due to the ongoing financial distress faced by both companies, they are set to experience some setbacks. Taking a cue from history, both companies have witnessed comparable growth in the past with similar cash flows from operations but 3M has been able to weather the storm better than Honeywell.