China Mask Material Maker Yanjan Hits Price Limit on Orders, Qualifying Filter Fabric
Tang Shihua
DATE:  Apr 07 2020
/ SOURCE:  yicai
China Mask Material Maker Yanjan Hits Price Limit on Orders, Qualifying Filter Fabric China Mask Material Maker Yanjan Hits Price Limit on Orders, Qualifying Filter Fabric

(Yicai Global) April 7 -- Xiamen Yanjan New Materials will supply melt-blown fabrics to downstream medical mask producers after its products were found to conform to medical quality standards, and the huge amount of orders it has in hand lofted the firm's shares [SHE:300658] to the daily upper limit to stop trading at CNY29.24 (USD4.13) this morning.

Meltblown fabric made at the firm's new dedicated plant complies with national standards for bacterial and particle filtration efficiency based on tests by the National Quality Supervision and Inspection Center of Textile Garment and Accessories Guangzhou and thus qualifies for use in making multiple- and single-use medical masks, the firm, whose primary business is producing non-woven materials for sanitary napkins and diapers, announced late on April 3 just before China's ancestor-honoring Qingming festival ushered in a three-day weekend.

The firm will start producing and selling the protective, felt-like fabric with a BFE equal to or higher than 99 percent, per the announcement, which added that it has received orders from about 55 customers, and the total order amount has exceeded 40 percent of its audited net profit for the previous year, but was otherwise silent as to specific amounts. 

Yanjan reported CNY1.0 billion (USD141.2 million) in operating revenue last year, up 35.5 percent annually, CNY82.3 million (USD11.6 million) in net profit attributable to its shareholders, up 69.3 percent, and a 29.9 percent gross profit margin in a 2.3 percentage point rise, according to the company's annual report for last year it released on March 31.

The firm did not formerly produce the fabric for medical masks, but finished six new production lines by the end of last month by rejigging its existing production facilities and building new ones following the Covid-19 outbreak. This equipment can produce 12 tons of the material per day.

China has been ramping up its mask production nationwide to prevent and control the coronavirus pandemic, triggering a shortage of the meltblown which forms the key middle layer in masks. The market price of the fabric has risen to up to 10 to 20 times its normal rate, and this bonanza has lured some companies that did not produce the polymer cloth to install new production lines to make it. Large players include China Petroleum and Chemical, which has built 16 such production lines that it plans to have successively up and running from last month to May. They are expected to produce more than 10,000 tons of the material each year.

China turned out 53,500 tons of meltblown in 2018, which went to make masks and environmental protection supplies, garments, battery diaphragms and towel materials, public data show.

The material is produced by melting polypropylene granules, with the resulting molten polymer extruded through spinnerets into continuous filaments that are cooled and deposited on to a conveyor belt to form a uniform web. The calendering process uses heat and high pressure applied through rollers to weld the fiber webs together at speed to produce a soft, uniform material, according to the website of face mask raw material maker Fuyang Sensi Trading, which is based in China's eastern Anhui province

Editor: Ben Armour

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Keywords:   New Production Line,Medical Masks