FEASIBILITY OF SETTING UP MELT BLOW PRODUCTION LINE IN INDIA DURING COVID

Abstract

As we are clearly aware of the disruption brought in about by the COVID-19 virus we can expect that the global supply chains are going to be disrupted with long lasting impact on the economy specially SMSE’s . This is going to put tremendous strain on the businesses since the cash inflows have almost stopped completely and outflows and other expenses are still continuing. Especially in the case of businesses which are overleveraged. A lot of businesses are seeing this as threat but we also use this as an opportunity as use this time to generate some cash flows to cushion our existing business with cash inflows and buy some undervalued assets due the fire sale by stressed businesses. In this pandemic the governments are making it compulsory for the people to wear masks and due to the shutdown the supply is not able to meet its demand. Furthermore due to huge back log at ports and very high rates internationally therefore it creates a huge opportunity for creating good masks. Since it is expected for a lot of manufacturers to set up more machines for masks and big output melt blow fabric lines taking next to 6 months to set up it creates the perfect market condition to set up low output melt blow lines which can be set up quickly. The demand for 3 ply masks is assured to rise since the 2 ply masks offer next to nothing performance and pandemic has created huge paranoia which assures us people would be willing to spend on masks. Furthermore with international prices soaring to ₹4200/kg it shows import from china is highly unlikely All the above stated factors led the Delite Plastic Industries to look forward to ease the bottlenecks in mask manufacturing and look into providing safe and reliable product at reasonable prices. With previous experience in the mask trading and links with the supply chain the firm can leverage this opportunity to turnaround and make the best out of this situation.