"Lost Motivation to Produce" Companies Abandon Production Due to Government Mask Supply Measures

Edent States "No Reason to Produce Masks at a Loss"
"Government Recognizes Only 50% of Costs Despite Inability to Compare with Chinese Production Prices"

Kim Yong-beom, First Vice Minister of Strategy and Finance (center), is announcing a joint mask supply stabilization plan with related ministries at the Government Seoul Office on the morning of the 5th. / Photo by Yonhap News

[Asia Economy reporters Seunggon Han and intern Juhyung Lim] 'Edent,' a dental materials manufacturing and distribution company, announced on the 5th that it will cease mask production.

The company claimed that due to the government's mask supply measures, profitability has significantly declined, leading to a loss of motivation to continue production.

Shin Seonsook, CEO of Edent's online shopping mall, stated in a notice posted on the official website that "The government informed us that the Public Procurement Service decided to purchase 80% of the manufacturers' (mask) production volume in bulk," and added, "Edent has decided to stop production."

There are two reasons why Edent decided to halt mask production.

First, CEO Shin pointed out, "Until now, Edent masks were produced at the Hongje-dong factory in Seoul by employing Korean workers without using cheap Chinese fabric and filters," and added, "Despite the production cost being incomparable to Chinese products, the Public Procurement Service notified us that only 50% of the production cost would be recognized and is demanding a production volume contract ten times the daily production capacity."

She continued, "Secondly, even though dental material shipments were delayed due to backlog orders, we prioritized deliveries according to government guidelines," and added, "Nevertheless, the government applied uniform guidelines to all mask manufacturers, and due to a change in guidelines stating that even producing and selling masks to medical institutions (dental clinics) that urgently need them is illegal, future supply to dental clinics has become impossible."

Shin Seon-sook, CEO of Edent Shopping Mall, posted an apology on the official website on the 5th, announcing the decision to halt mask production. / Photo by Edent official website capture

CEO Shin said, "Edent has completely lost both the reason and motivation to continue producing masks while incurring losses," and expressed, "I sincerely apologize for making this decision and bow my head in apology once again."

On the same day, Kim Yongbeom, First Vice Minister of Strategy and Finance, held a joint briefing with related agencies at the Government Seoul Office and announced the government's mask supply stabilization measures.

The announced measures include increasing the mandatory public supply ratio of masks from the current 50% to 80%, a complete ban on mask exports by private companies, and a mask purchase day restriction system based on birth year, known as the mask 5-day rotation system. Additionally, Vice Minister Kim stated that a 'mask price ceiling system' designating the maximum mask price would also be considered if necessary.

Furthermore, the government prepared measures to strengthen support to increase production volumes of existing mask manufacturers.