The aggressive variant strain of the novel corona-virus Delta has led to the spread of many outbreaks in China. Zhangjiajie, a famous tourist city located in the northwest corner of Hunan Province, has become another epidemic storm eye besides Nanjing city.
A Guangdong truck slowly entered the gate of the Zhangjiajie Industry and Information Technology Bureau at 1 am on August 2, which is the first batch of donations received by Zhangjiajie city since the outbreak of the epidemic.
Kingfa Medical is the initiator behind this donation. After learning that Zhangjiajie was suffering from the epidemic, Kingfa Medical and Guangzhou Ruisen Biotechnology, which is also a partner in the investment promotion of Zhangjiajie High-tech Zone, jointly prepared 260,000 masks and 10,000 disinfection sprays and other epidemic prevention materials to support Zhangjiajie city in fighting the epidemic.
Relying on the industry chain advantages of Kingfa Technology (600143.SH) in the fields of melt-blown cloth and protective clothing breathable film, Kingfa Medical has completed its transformation from "epidemic supply" to "independent brand development". In just one and a half years since its establishment, the product matrix of this medical "recruit" has covered the three major fields of professional medical care, life health, and industrial protection. It has successively developed high-efficiency and low-resistance melt-blown cloth, high-performance medical and protective masks, nitrile medical gloves, protective gloves, protective clothing, isolation gown, disinfectant wipes, goggles, and other products.
Ding Min, general manager of Kingfa Medical, emphasized in an interview with Times Weekly that all products of Kingfa Medical are derivatives of new materials of Kingfa Technology, and they have never deviated from the development track and purpose of Kingfa Technology. Although the scale is important, product quality is always the key to Kingfa Medical's future success.
"The best mask brand in Germany"
In May and June 2020, entrusted by Zweites Deutsches Fernsehen (ZDF), DEKRA, a world-renowned third-party professional testing and certification organization, has tested and compared a variety of masks on the German market. In the end, a mask named Kingfa was certified as "the best quality brand in Germany."
As soon as the report came out, Kingfa masks became popular in the German market. What's interesting is that this mask was once mistaken for "Made in Germany", but in fact, its manufacturer is Kingfa Medical from China, which is truly "Made in China". At this time, only 3 months have passed since the establishment of Kingfa Medical.
At the beginning of 2020, the Covid-19 broke out suddenly, and the global supply of medical protective materials was once tight, and even a "mask" was difficult to find and the protective clothing was also in short supply. While there is a huge gap in demand, the production capacity of these materials is extremely insufficient due to various reasons.
As one of the world's most comprehensive new polymer material suppliers, Kingfa Technology has special materials for melt-blown cloth needed for epidemic prevention materials, so the company shipped dozens of tons of goods to Wuhan for the first time. At the same time, "melt-blown polypropylene-melt blown cloth-mask" is the process of producing masks, and the tightness of supply in each link has begun to highlight step by step. In order to further solve the problem of the supply of medical supplies, Kingfa Technology began to build a production line of anti-epidemic supplies without stop.
Under normal circumstances, the research and development of a process take one month, but Kingfa Technology mobilized multiple R&D personnel to work overtime, and it only took two days and nights to make an overall solution for medical polymer epidemic prevention materials. Since then, in order to respond to the social epidemic prevention needs, they have followed the mask production factory to learn about mask production, provided venues and management talents, and worked together on the supply of masks.
In this process, Kingfa Medical came into being. During the epidemic, Kingfa Technology was not the only company in the field of medical and health care, but Kingfa Technology's entry was not due to a whim of short-term benefits.
"To develop the medical business, whether to do the wholesale business or the polymer material business, we have been thinking and exploring internally, and at the same time, we have been making funds, technology, and talent reserves in this area. If it were not for these accumulations, and without these accumulations, Kingfa Technology would not be able to successfully complete the medical business in an instant, because it is not a one-time thing." Ding Min said frankly.
Relying on Kingfa Technology's technological precipitation and innovation capabilities in polymer materials, Kingfa Medical has determined the idea of expanding into the field of polymer materials for medical consumables and opened up the upstream, midstream, and downstream---from upstream polypropylene raw materials to midstream melt-blown cloth, and then to the production of downstream masks, protective clothing, and other products, thus the integrated industrial chain is fully covered.
Up to now, Kingfa Medical has successively developed products such as high-efficiency and low-resistance melt-blown cloth, high-performance medical and protective masks, nitrile medical examination gloves, and protective gloves. Projects under construction with an annual output of 40 billion nitrile gloves and other medical and health polymer materials are also expected to be put into production this year.
Kingfa Medical has also quickly become an important business segment of Kingfa Technology and a new profit growth point. Financial report data shows that in 2020, Kingfa Medical's product sales area includes more than 30 countries and regions on 6 continents, achieving sales revenue of 2.710 billion yuan, accounting for 7.82% of Kingfa Technology's total revenue, and gross profit as high as 2.06 billion yuan.
Widen the product moat (Strengthen product competitive advantage)
The epidemic has allowed Kingfa Medical to spend only more than a year and has gone through many years of other similar companies. But Kingfa Medical's ambitions don't stop there.
According to the data from Tianyancha, an app for querying corporate information, there are currently more than 440,000 mask-related companies in my country that have “masks and respiratory protection” in their business scope, and their status is active, surviving, moving in, or moving out. In the post-epidemic era, the mask industry has returned to normal, with quality and price returning to its core competitiveness. As the domestic mask market becomes saturated, whether it can produce high-standard products and meet export standards has become a "watershed" for mask manufacturers to explore overseas markets and sustain their survival and development.
As an important category in the low-value medical consumables industry, medical sanitary materials and dressing products represented by medical masks do not require deep processing, and the factors that affect their quality are more of the materials they use.
The scientific research strength of Kingfa Technology in polymer materials provides strong support for the improvement of the quality and performance of Kingfa medical products. The total investment in research and development in the past three years has exceeded 3 billion yuan. In addition to completely biodegradable plastics, Kingfa Technology has also developed more than 100 internationally advanced high-end new material products such as special engineering plastics, high-performance carbon fibers, and composite materials.
Although sales have achieved certain results, Kingfa Medical still faces challenges such as sales pipelines and promotion pipelines that are not fully opened. "Kingfa was originally a B2B company, and the road to B2C is still being explored. Kingfa Medical needs to increase marketing to make products change the market." Ding Min said, "Good products are gradually available, such as ultra-low respiratory resistance masks. In addition, masks will become a new environmental pollution problem, and the degradable masks of Kingfa Medical will soon be put on the market."
On the other hand, in order to improve the layout of the medical industry, Kingfa Medical has started the nitrile glove project in October 2020. The project has a total investment of 5 billion yuan and total planning of 96 high-speed energy-saving nitrile gloves production lines. After the completion of the project, the annual production capacity of nitrile gloves will reach 40 billion.
In addition to the already mature mask and glove projects, Kingfa Medical is also developing its next flagship product to widen the moat. Protective clothing is one of them. Not only protective clothing. In fact, technological innovation is embodied in every product of Kingfa Medical. To get rid of the fate of a price war and occupy a place in the mid-to-high-end market, Kingfa Medical has always insisted that realizing true source innovation is the right answer.
"In 2020, Kingfa Technology has become a star enterprise in the industry, but the development of an enterprise has a necessary law. We want to do things, we don't want to make a quick buck, so we want to put more effort and time and even more focus on the products” Ding Min said confidently, “Although the process will be very long, this is the foundation of Kingfa Medical’s life.”