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[Herald Interview] Business booming at fabric maker amid soaring demand for masks

►Local fabric maker E&H in full swing amid COVID-19 scare, seeks Kosdaq debut in H2

POCHEON, Gyeonggi Province -- Amid coronavirus fears, local fabric maker Environment & Human’s machines have been in full operation night and day.

The nonwoven fabric manufacturer churns out thin sheets of meltblown nonwoven fabric, an essential material for face masks.

Demand for masks has been skyrocketing, driving the government to take full control over the supply and distribution of masks. The surge -- likely to continue for some time -- reflects concerns about the virus but it also offers a big opportunity for local mask manufacturers like E&H.

“Within just two business days after the Lunar New Year holiday last month, the company was inundated with two months’ worth of orders,” said Hwang Kyu-ik, founder and president of E&H, forecasting the upward trend in demand would continue and boost sales this year.

Founded in 2001, the company produces the fabric for masks, air conditioner filters and automotive filters.

The annual production volume of the five production lines installed at its Pocheon plants amounts to more than 30 million square meters of the polypropylene-based fabric. Electrostatically charged, the material absorbs dust, bacteria and pollen. It can also be used in air filters, insulators, diapers and medical masks.

Although the high volume of orders -- from both South Korea and global markets -- means financial benefits, Hwang said the company would not try to profiteer from the COVID-19 outbreak.

“Businessmen should not take advantage of other people’s suffering, and I keep emphasizing that to my employees too,” said the president, vowing not to raise the prices of the material.

The company is listed on Konex, a securities exchange for small and medium-sized enterprises and venture companies. With the aim of attracting more investment, it plans to move to the nation’s secondary Kosdaq bourse as early as the latter half of this year.

E&H’s sales stood at 17 billion won ($14 million) last year, and the figure is expected to reach some 30 billion won this year on increasing demand for the petrochemical fabric in diverse industries, according to Hwang.

The entrepreneur also envisaged his longtime dream of developing fireproof nonwoven fabric that can prevent fires from spreading quickly at the initial stage.

“Considering my old age, it may be a long shot to make a huge investment, approximately 10 billion won, to develop such incombustible fabric,” the 64-year-old said.

“The product, however, will be worthwhile, as it can be used in schools, apartments and trains to protect people’s lives,” he said.

Despite soaring demand these days, the past few years have been tough for the company.

Nearly half of the five production lines owned by the firm idled for three years, from 2017 to 2019, because of lukewarm demand, which resulted in stagnating revenue.

However, the company took a bet at the time by investing 32 billion won ($26.5 million) to beef up the production lines and hire new employees.

With concerns growing over the new coronavirus, demand for face masks has grown exponentially.

On Jan. 20, Korea saw its first confirmed case of COVID-19, the disease caused by the new coronavirus. The number of infections here surpassed 600 as of Sunday afternoon.

Some domestic and Chinese merchants were reportedly buying large numbers of masks, causing a shortage of the products and higher prices here.

Hwang said the recent jump in mask prices was mainly due to merchants behaving like “amateurish crooks.”

“E&H thinks about sustainability first, not short-term profits,” he said.

 By Kim Young-won  (wone0102@heraldcorp.com)