Australian mask makers on the brink as cheaper imports flood the market

Over 50 Australian firms that pivoted to making masks during the pandemic are on the brink after missing out on contracts, leaving us exposed to future shortages industry leaders say.

Australia’s protective mask industry, which was revived during the Covid pandemic, is on the verge of collapse with the return of cheaper Chinese and Asian imports.

The country’s remaining Australian-owned manufacturers of masks and respirator masks are lobbying the federal government in an 11th hour bid to save the sector which they say would be exposed in the event of another Covid-like pandemic event.

Ron Smyth, whose Brisbane-based company PPE Tech was one of about 50 to 60 Australian businesses that started making the masks at the start of the pandemic when imports dried up, said the situation was bleak.

He believes there will be no local manufacturers by the end of the year without government support.

“Domestic PPE (Personal Protective Equipment) manufacturers invested millions of dollars in infrastructure, jobs, and technology – yet the government is not supporting local businesses,” Mr Smyth said.

“Just three years ago there were over 50 Australian PPE (Personal Protective Equipment) manufacturers, now only six remain and all of them survive only because they have other business lines.

“PPE Tech has gone from over 60 employees to just five and another major supplier has dropped from 500 to 20. This is an industry on the brink of collapse.”

Mr Smyth, who is also the managing director the Wood Tech Group, said he started PPE Tech in 2020 after buying the top-of-the-line P2 mask making machines in the first phase of the Covid pandemic.

“We were selling masks in June 2020 and we never got a contract from the government and never applied for one,” he said.

“Government departments like the Australian Federal Police, hospitals, nursing homes, fire brigades were buying them directly because they couldn’t them from anywhere else.

P2 masks that were used during the Covid pandemic were in short supply.

“Australian-made PPE is of higher quality and provides greater protection than imports, yet the government refuses to support local producers despite the minimal price difference. But by the end of the year we will be closed.”

According to a 2021 report by the Institute of Integrated Economic Research Australia the eclipse of the nation’s mass-market textile sector had constrained the production of masks at the start of the pandemic.

“A surviving handful of small but innovative textile firms were able to pivot and produce high grade personal protective equipment,” the report said.

“While a few isolated success stories should not disguise the lack of scale and diversity in Australia’s manufacturing sector, they do show the potential that a larger manufacturing industry could offer if a response to another major challenge is required.”

While there is no protection for the PPE sector in Australia, in many case offshore the industry is secured in the national interest.

At the same time in Australia the leading multinational distributors will not buy Australian-made masks wholesale because they cost more than offshore competition.

Mr Smyth said particularly concerning was the state of the National Medical Stockpile (NMS) which is the nation’s last line of defences in the case of another pandemic.

He said the NMS should have 180 million masks – or six weeks stock – but was progressively being run down.

Mr Smyth said a supply panel, which PPE Tech was a part of, had called for tenders in 2023 to supply the masks, and contracts were signed in December last year.

“The Health Department created a supplier panel but has not issued a single order – this is not a procurement issue, but a policy failure that jeopardises national security. Multinational distributors are flooding the market with cheaper imported masks,” he said.

“The National Medical Stockpile should prioritise Australian-made products, ensuring we are never caught short again. Without action, the same mistakes of the past will be repeated – leaving Australia vulnerable.”

A Department of Health and Aged Care spokesman said since the pandemic, the issues around supply-chain have now eased.

“The Department takes into consideration a broad range of product and market insights from industry and other sources, when determining procurement requirements,” he said.

“At present the Department does not have a specific requirement for PPE products and since the end of the Covid-19 pandemic has not entered into any new purchases of PPE including medical masks.”

The spokesman said the department does not have any government-funded programs, rebates or incentives for local or multinational suppliers for the National Medical Stockpile.

“The approach to market to create this panel arrangement was open to both domestic and international suppliers,” he said.

“When evaluating tenders for the panel the NMS considered the economic and social benefits to Australia each supplier would provide through the delivery of the goods.”

Originally published as Australian mask makers on the brink as cheaper imports flood the market