PPE Production as a Response to COVID-19 Pandemic and Future Crises
PPE Production as a Response to COVID-19 Pandemic and Future Crises
Business Model Description
Investments in production of disposable and washable facemasks as well as aprons, surgical masks, gowns and protective suits. Product Diversification: Investments in Producing Aprons, Surgical Masks and Surgical Gowns, Protective Suites.
Expected Impact
Investing in local businesses which manufacture disposable or washable face masks will create an efficient supply of PPEs for daily use and for health workers, reducing the risk of contagion during pandemics.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Turkey: Aegean Region
- Turkey: Central Anatolia Region
- Turkey: Marmara Region
Sector Classification
Consumer Goods
Development need
Turkey's achievement of SDGs 3, 6, and 8 is increasing yet remains behind the target levels. The picture is grimmer with SDG 9 and 12 as attainment is stagnating or increasing less than the required rate. (1) The pandemic has also made it vital to produce essential consumer products such as masks & other PPE.
Policy priority
The 11th Development Plan, 2020 Annual Program and New Economy Program 2020-2022 target macroeconomically balanced, innovative, technological, productive and efficicency-focused grrowth. (2) (3) (4). The 11th Development Plan calls for promoting an integrated production structure, social responsibility and environmental awareness within the textile sector.
Gender inequalities and marginalization issues
Although there is no disaggregated data about women's access to a basic goods basket in Turkey, on average, women in Turkey experience a gender wage gap of 15.6%. (24) It is estimated that for every single dollar a woman earns in Turkey, a man earns 2.27 dollars. (25) This implies a lower purchasing power vis-a-vis their male counterparts. Within the textile industry in the consumer goods sector, there is a high rate of informality among migrant and female workers. Informal workers within these sectors are usually paid below subsistence levels. (21)
Investment opportunities
35% of millennial and 36% of Gen Z consumers state that they deliberately try to purchase clothes and products with “sustainable” or “environmentally friendly” labelling according to the Cotton Incorporated Lifestyle Monitor™ Survey. (20)
Key bottlenecks
Price fluctuations and other such macroeconomic trends present a bottleneck on the demand-side for consumer goods. The dramatic shift to digital platforms after COVID-19 has been leaving some producers out of the market, there is a need to increase the digital literacy of SMEs. Inadequacies or disparities in some regional transport infrastructure pose supply-chain constraints
Apparel and Textiles
Development need
The fashion industry consumes around 79 billion cubic meters of water annually, accounting for over 10% of water consumption by all industry types. This is expected to rise 50% by 2030.(7) Due to COVID-19 restrictions, there was nearly a 70% decrease in the markets, and consumers turned to sustainable, environmental friendly and long-running products.
Policy priority
11th Development Plan suggests that the production/use of technical textiles and energy-efficient production technologies is supported by the government. Companies are called to comply with environmental protection legislation and waste re-use activities and cooperate with other stakeholders in the value chain (in particular machinery, fiber and technical end-use manufacturers).
Gender inequalities and marginalization issues
It is estimated that there are approximately 1.5 million informal workers in the garment industry. (20) The garment industry is among the top three employment sectors of Syrian refugees. (21) Research shows that most of the migrant workers in the apparel and textile industry are informal and lack social security. Informal workers in this sector earn below the minimum wage. Syrian female workers reported earn 20% less than male Syrian workers in Turkey's garment industry. (21)
Investment opportunities
35% of millennial and 36% of Gen Z consumers state that they deliberately try to purchase clothes and products with “sustainable” or “environmentally friendly” labelling according to the Cotton Incorporated Lifestyle Monitor™ Survey. (20)
Key bottlenecks
Price fluctuations and other such macroeconomic trends present a bottleneck on the demand-side for consumer goods. The dramatic shift to digital platforms after COVID-19 has been leaving some producers out of the market, there is a need to increase the digital literacy of SMEs. Inadequacies or disparities in some regional transport infrastructure pose supply-chain constraints
Pipeline Opportunity
PPE Production as a Response to COVID-19 Pandemic and Future Crises
Investments in production of disposable and washable facemasks as well as aprons, surgical masks, gowns and protective suits. Product Diversification: Investments in Producing Aprons, Surgical Masks and Surgical Gowns, Protective Suites.
Business Case
Market Size and Environment
> USD 1 billion
5% - 10%
The number of masks manufactured in a day
The global PPE market size was estimated at $ 55.60 billion in 2019. (11) The global PPE market size has the potential to grow by $28.67 billion during 2020-2024, exhibiting a growth rate of 5.6% (15)
Indicative Return
15% - 20%
Benchmark investments in this area are associated with 15% investment returns. Also, global practices point to 15-25% increases in share prices following solutions to increase productive capacity for protective equipment. (9)
Investment Timeframe
Short Term (0–5 years)
Use of current production facilities/infrastructure enables a very quick investment timeframe as short as 2-5 months.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Market - Highly Regulated
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
According to WHO, PPE industry must increase manufacturing by %40 to meet with increasing global demand. (8)
COVID-19 crisis has long-term effects on people's daily life and is expected that its effects will continue for at least 2-3 years. Wearing masks is becoming the new normal, therefore demand for PPE industry is increasing rapidly, especially for disposable and washable face masks
Recovery Plans of many countries, including Turkey requires wearing masks outside which sustains the demand of PPE products high, especially disposable and washable facemasks.
Gender & Marginalisation
According to research findings, most of the workers in the Turkish garment industry make a living far below the minimum wage and common subsistence levels. (21) This is exacerbated by the impact of COVID-19; the textile sector is estimated to be among the most-affected sectors (23)
Expected Development Outcome
Investing in local businesses which manufacture disposable or washable face masks along with production of the necessary technology for fast manufacturing would create efficient supply of PPEs for daily life and for health workers and could increase the export volume of the industry.
Addressing PPE demand would block sudden demand shocks due to pandemic which would sustain the necessary protection and would decrease hospital expenses by avoiding patient intensity.
Gender & Marginalisation
Increase income levels and economic opportunities for women, inmigrants or rural population in the apparel industry
Primary SDGs addressed
3.8.1 Coverage of essential health services
3.9.2 Mortality rate attributed to unsafe water, unsafe sanitation and lack of hygiene (exposure to unsafe Water, Sanitation and Hygiene for All (WASH) services)
3.b.2 Total net official development assistance to medical research and basic health sectors
3.d.1 International Health Regulations (IHR) capacity and health emergency preparedness
74% (2017)
0.3 deaths per 1000 population (2016)
USD 66.7 million (2018)
Legislation & Financing (100%), points of entry (90%), Health serrvice provision (87%), Zoonotic events (80%), IHR Coordination (70%), Radiation emergencies (60%), National Health Emergency (60%), Checmical events (60%), HR (60%), Food safety (60%), Risk Communication (40%)
100%
8.4.2 Domestic material consumption, domestic material consumption per capita, and domestic material consumption per GDP
18.7 metric tons per capita (2017)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
People
Corporates
Public sector
Outcome Risks
Since facemasks are becoming a new daily accessory for people, taking these products into the fashion industry may trigger overconsumption.
Non-biodegradable and disposable PPE creates an excessive amount of waste due to high level of usage during Pandemic, which can cause high level of environmental pollution if not treated properly.
Impact Risks
Unexpected impact risk
Impact Classification
What
Important, positive outcome: increased health outcomes
Risk
Disposable masks are associated with a significant risk of medical and solid waste, if waste management is not planned accordingly.
Impact Thesis
Investing in local businesses which manufacture disposable or washable face masks will create an efficient supply of PPEs for daily use and for health workers, reducing the risk of contagion during pandemics.
Enabling Environment
Policy Environment
11th Development Plan: Fast and flexible production, innovation, customer focus, integrated production structure, social responsibility and environmental awareness, retailing and organizational skills will be developed in this sector
The 2020 Annual Presidential Programme emphasizes that economic growth and production methods should comply with environmental sustainability standards
Financial Environment
Financial incentives: KOSGEB TEKNOYATIRIM Support Program provides up to 6 million TRY support under its SME program, from which disposable mask producers can also benefit. (18) (19)
Fiscal incentives: Government Incentives for Medical Products: Interest Support, Tax exemption from Total Fixed Investment Amount, SSI Exemption from Total Fixed Investment Amount, SSI employer Premium Exemption, SSI worker Premium Exemption, VAT exemption, Customs Exemption, exemption from municipal Development Fees, exemption from stamp tax, Five-Year Real Estate Tax Exemption, State's Allocation From The Treasury Lands (varies depending on the base city)
Other incentives: The Ministry of Industry and Technology and The Development and Investment Bank of Turkey established "The Technology and Innovation Fund" under the Turkey Development Fund to finance innovative tech. based companies/projects with a budget of 350 million TRY.
Regulatory Environment
Turkish Standards Institute (TSE): set up standards for the production of Washable Face Masks, determining 3 indicators as "filtration efficiency", "breathability" and "microbial load". (14)
CE Marking Directives: Importers should have CE Mark, and should issue documents such as the Declaration of Conformity (DoC), user manual, technical files, and test reports. (16)
Marketplace Participants
Private Sector
Lotus Grup
Government
Ministry of Health, Ministry of Trade, KOSGEB, Industrial Development Bank of Turkey
Multilaterals
EBRD
Non-Profit
TIM, Istanbul Apparel Exporters' Association
Public-Private Partnership
USHAŞ
Target Locations
Turkey: Aegean Region
Turkey: Central Anatolia Region
Turkey: Marmara Region
References
- (1) Sustainable Development Report Dashboard 2019, OECD Members, Turkey, https://dashboards.sdgindex.org/?fbclid=IwAR1tzYVKRXvPD2mwfvhf-mLTGGQEjA76y_HlrprWhSzNYZcqrLZMLXzRIcI#/TUR
- (2) 11th Development Plan http://www.sbb.gov.tr/wp-content/uploads/2020/03/On_BirinciPLan_ingilizce_SonBaski.pdf
- (3) 2020 Annual Presidential Program, http://www.sbb.gov.tr/wp-content/uploads/2019/11/2020_Yili_Cumhurbaskanligi_Yillik_Programi.pdf
- (4) New Economy Plan 2020-2022. http://www.sbb.gov.tr/wp-content/uploads/2019/10/YeniEkonomiProgrami_OVP_2020-2022.pdf
- (20) Sourcing Journal, https://sourcingjournal.com/topics/lifestyle-monitor/millennials-gen-z-sustainable-clothes-psfk-social-environmental-microplastics-189021/
- (21) Clean Clothes Campaign, 2013. https://archive.cleanclothes.org/livingwage/europe/country-profiles/turkey
- (22) ILO, 2020. https://www.ilo.org/ankara/news/WCMS_738616/lang--en/index.htm
- (23) Al-Monitor, 2020. https://www.al-monitor.com/pulse/originals/2020/05/turkey-coronavirus-ravages-vital-clothing-textile-industry.html
- (24) ILO, 2020. https://www.ilo.org/ankara/news/WCMS_757055/lang--en/index.htm
- (25) World Economic Forum, 2015. http://reports.weforum.org/global-gender-gap-report-2015/?doing_wp_cron=1545142811.9699389934539794921875#frame/ac8d4
- ("5) Bangkok Post, Fashin Industry Turns to Face Masks. https://www.bangkokpost.com/business/1908235/fashion-industry-turns-to-face-masks " "6) AA, 8 May 2020. https://www.aa.com.tr/tr/saglik/turk-sirket-ayda-1-5-milyar-adet-cerrahi-maske-uretecek/1833701 " "7) Textilegence, 28 April 2020 https://www.textilegence.com/aytim-tekstil-150-milyon-liralik-maske-yatirimi/ " "8) WHO, Covid-19. https://covid19.who.int/ " "9) Yahoo. https://finance.yahoo.com/news/4-apparel-stocks-offering-ppe-141202606.html " "10) Haberler, 16 April 2020. https://www.haberler.com/turkiye-gunluk-50-milyon-maske-uretim-kapasitesine-13129075-haberi " "11) Grandview Research, PPE Market. https://www.grandviewresearch.com/industry-analysis/personal-protective-equipment-ppe-market " "12)Grandview Research, Disposable Face Masks Market. https://www.grandviewresearch.com/industry-analysis/disposable-face-masks-market " "13)BusinessWire. https://www.businesswire.com/news/home/20200508005519/en/COVID-19-Impact-Recovery-Analysis-Personal-Protective-Equipment " "14) Hürriyet. https://www.hurriyet.com.tr/galeri-yikanabilir-bez-maske-nedir-bez-maske-kac-kere-yikanabilir-bez-maske-standartlari-belli-oldu-41515417 " "15) Bloomberg. https://www.bloomberght.com/maske-ihracatinda-on-izin-sarti-aranmayacak-2255325 " "16) European Safety Federation, COVID 19. https://www.eu-esf.org/covid-19/4513-covid-19-suspicious-certificates-for-ppe " "17) Medikal Tıbbi Cihazlar Yatırımlar Teşvikler https://dengemusavirlik.com/medikal-urunler-tibbi-cihazlar-yatirim-tesvikleri.htm urun-yatirim-destek-programi" "18) Hürriyet. https://www.hurriyet.com.tr/ekonomi/maske-ureticisine-6-milyon-lira-destek-41478058 "
- (19) Kosgeb, KOBİ TEKNOYATIRIM. https://www.kosgeb.gov.tr/site/tr/genel/destekdetay/6443/kobi-teknoyatirim-kobi-teknolojik-urun-yatirim-destek-programi