By Brent Balinski
This week a story on the plight of Med-Con drew emotional responses from supporters of manufacturing in Australia.
The regional Victorian maker of medical gear was — like the Grey Innovation-led notus ventilator team or scores of companies that retooled to make hand sanitiser or other products — a reminder last year of the country’s industry and its importance, particularly when what’s needed can’t be bought in from overseas.
Med-Con’s story had special resonance, as the country’s “last man standing” producer of medical masks when the Covid-19 pandemic took off. When there was a shortage of such protective gear, the Shepparton manufacturer stepped up, and the Defence Force was sent in to help it boost capacity from 2 million masks a year to 160 million.
The Australian-owned company’s efforts earned it a wealth of coverage, and saw it singled out last year by then-industry minister Karen Andrews in a National Press Club address on the importance of maintaining a strong and adaptable local manufacturing base.
But this week there was a report that Med-Con had seen staff levels plummet from 150 at their peak to 25, with only two of ten mask machines running. According to that coverage, the pandemic-era hero — now no longer the only local mask-maker — had been dumped in favour of imported PPE.
@AuManufacturing spoke to Med-Con CEO Steven Csiszar, seeking his point of view on where they’ve ended up, some extra nuance to the story, and responses to some of the questions our community has asked.
@AuManufacturing: What has the response been like following that ABC article the other day? Your story seems to have generated a lot of emotion in our community. What have people said to you?
Steven Csiszar: It sure did get a lot of comments, much more than I would have imagined. I think partially because the story was slightly misrepresented. You’ve just got to watch the media: they can’t help themselves. Sensationalism is rife. I think they were trying to do the right thing. They were following up on stories they’d done earlier in the year and late last year about how we’re going with manufacturing the face masks, basically for Australia.
The story basically goes that now pretty much the pandemic in its original extent is finished and we’ve only got these spot lockdowns,the bulk of the production has pretty much ceased. And what’s happened is that most of the people that we looked after, like the state health services, they seem to have dropped away in the sense that they’re just not buying from us. So either they’ve gone back to previous suppliers or they’ve gone back to some alternative product. Where they misrepresented the story was that the Commonwealth has continued to support us and we’ve got a standing contract with them to continue to make masks for the next five years.
@AuManufacturing: For the National Medical Stockpile?
Steven Csiszar: Primarily for the stockpile, but they do let some of it go where necessary, but then I don’t have any control over that. So we supply it to the stockpile and then what they do with it becomes their sort of concern.
@AuManufacturing: The article mentioned you reached full capacity late last year, with all ten machines running, and now two are. Was such a ramp down more or less planned? Was the staff level at the peak never going to be sustained?
Steven Csiszar: I think, realistically, there was going to be a ramp down because physically the amount of masks we can make is just far too much for Australia. If we continued to run 24/7, we were able to make in the vicinity of about 160 million a year, and that’s just far more than Australia would ever need.
And of course, there was another problem in that a lot of competitors jumped in after the pandemic. And now we’ve gone from being the sole manufacturer to one of probably about a dozen manufacturers, where we’re all trying to eke out a living, which makes it a bit difficult, because, you know, people find ways to be competitive.
But we’ve always planned to ramp down. We told the government that it wasn’t worth our while doing the business unless we had ongoing business, because there was no value spending all that money on behalf of the Australian public and then putting the ten machines into mothballs. So they understood that. That’s why they gave us the ongoing contract. We had hoped that we’d probably go back down to maybe six or four machines, and that way we could keep more staff on hand. And by that we mean that people need to be trained: you just can’t go out on the street and say, ‘look, I need a facemask machine operator.’ Sure, these people need training, they need experience. But of course, if you don’t have enough sales and you don’t have the machines turning over, you have to let them go. So that’s pretty much what happened. And of course, we’ve built up a fair bit of stock, so inventory is quite high at the moment. So technically we probably can run anywhere between two and four machines depending on market sales. But at the moment we’re just running the two on the basis that we have ample inventory and we just don’t need to keep adding to it.
@AuManufacturing: So the state health services have stopped buying, and that’s mainly the issue here?
Steven Csiszar: Basically that’s the issue. Let’s be frank, we’re not stupid and we don’t want everything, because that’s not realistic and it’s not commercially sound. But I think they need to have a good look at what they do and how they do it, because my concern is that they forget what we went through.
And most state health services are run independently to the government, in the sense that they’re an autonomous body, they have their own contracting division, they have commercial people in there that make decisions. And unfortunately, I think that a lot of the commercial decisions they’re making are based on price and that they forget that the day may come again when the borders are closed and we will go back to the old days when they’re struggling to catch up and get product out there. Plus price then increases, and then you’ve got to air freight stock and you’ve got to do all sorts of things that you should never have to do again. [
@AuManufacturing: Right. I’ve seen one or two comments that were not quite supportive of you guys and your situation. One fellow said, ‘I could buy 100 masks from you guys, which including the cost of transport is $105 dollars. Or I could pay 40 cents each from the grocer for masks that were made in China.’ To me, that shows short-sightedness and a short memory.
Steven Csiszar: Yes, exactly. And the other thing is, of course, you’re not comparing eggs with eggs. Our masks are made to an Australian standard. They have to be tested accordingly and they have to be proved to perform to a certain level. Most of these masks that these people are talking about are basically garbage. They don’t actually perform as a mask. They’re just a piece of material with some ear-loops on it. And the reality is that if you’re serious about not wanting cross-contamination, then you need a surgical mask, and that has to perform. I can guarantee you that the one he is talking about won’t perform. I guess the simple comparison is that you could buy a Mercedes or you could buy a Kia. Both are cars, both will get you from A to B, but there’s a huge difference between the way they make the two cars. Masks are the same.
@AuManufacturing: Exactly. ‘Will it be fit for purpose?’ would have to be the main question.
Steven Csiszar: Fit for purpose. And let’s be serious, fit for purpose is very important because we’re talking about some very highly infectious pathogens. What I see at the moment and one of the things that really concerns me is that there’s a lot of people walking around with masks that are really just totally ineffective. They may as well have nothing on.
@AuManufacturing: Others in our community have asked ‘how can we help?’
Steven Csiszar: I suppose from the community’s point of view, we’ve had a fantastic response and we’ve even had people ring up ordering masks from us. As a matter of fact, it makes it a bit awkward because we hadn’t been specifically geared to do that. But we’ve set up a site where people can actually buy off us, because the response has been fantastic, and we want to look after everyone as best as we can. But I think really the ball is back in the court of the state health departments. I think they have to take a hard look at what they are doing and how they can do it better to support local manufacturers, because it’s not just us. There’ll be other people in other PPE sorts of products and if they don’t support them they’ll disappear again and we’ll be back to where we started.
I guess everyone saw very clearly last year why we need to make these sorts of critical products here, but people can kind of forget very quickly.
Steven Csiszar: I know. It’s crazy. It’s a mindset and it’s a very hard thing to change. I think that we need some external pressure. I think the disappointing factor for us was that we really worked hard to help all the states out. Apart from working 24/7, we made sure to give everyone a bit so that no one missed out. We made sure that we could service the people as best we could. And at the time they were very grateful and very happy. And then six months down the track, we don’t even hear from them. Nothing. Having said that, I must say that just recently we’ve been contacted by the Victorian Health Department, the HSV, and they’re coming to talk to us about masks. I’m just wondering whether this little bit of publicity [from the ABC story] has jogged them into action.
@AuManufacturing: Then that would be a positive, even if you were not quite accurately represented. And so, just to be totally clear, you’ve got no beef whatsoever with the feds?
Steven Csiszar: No. The feds have been extraordinarily great. They really came to the party. They had the Defence Force in there, they gave us grants. They helped us with our sourcing of materials. I can’t tell you how good they were. And having said that, the Vic government wasn’t too bad either. They supported us in many ways. So it’s not really a governmental thing. And I think this is what people don’t understand. I think that the government is one thing and the health service is another. And I think it’s within the health service that the issue lies, where their procurement doesn’t necessarily give any favouritism to Australian made.
When you hear phrases like ‘I need to know what your best bulk price is,’ then you really know that you’re going to lose the battle.
@AuManufacturing: Indeed. Is there anything to add about this whole episode this week?
Steven Csiszar: I guess I’m a bit surprised about the reaction. Pleasantly, mostly. What we’ve got to do now is hold up our part of the bargain if these people come back to us. We will do everything we can to look after them. And we’ll always maintain our professionalism and our quality, and I just hope that we can get these people back on board in some fashion on a regular basis.
(This interview has been lightly edited for clarity.)
Featured picture: Med-Con
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