In the News
Kansas Reflector: Kansas businessmen: COVID-19 exposing weakness in U.S. medical supply manufacturing
Nov 17 2020
TOPEKA — InkCycle president Rick Krska’s printer cartridge refurbishing business in Kansas was derailed by relentless price competition from Chinese imports, and that harsh experience was remarkably similar to what happened when he launched a hand lotion businesses amid the COVID-19 pandemic.
Krska outlined for a U.S. Senate subcommittee chaired by Sen. Jerry Moran of Kansas how his company became the fourth-largest toner cartridge remanufacturer in the country in 1995 and the largest injet reconditioner in the world with 800 employees in Lenexa about 10 years later.
In time, he said, companies in China abused intellectual property and patent law and began flooding the United States with low-cost aftermarket cartridges. Ninety percent of the U.S. aftermarket cartridges are now produced in China — far above the 5% of 15 years ago, he said.
“China has decimated a U.S. remanufacturing industry of over 5,000 companies of all sizes,” Krska said. “The price for a newly built cartridge from China was less than our direct remanufacturing costs here in the United States.”
In January 2020, Krska was on a material sourcing business trip to Asia that included a stop in Wuhan, China, where he witnessed onset of the pandemic. Coronovirus has tortured the global economy and killed more than 1.3 million worldwide, 247,000 in the United States and 1,200 in Kansas.
Krska said company decided to explore how best to pivot to manufacture of personal protective equipment. That led to a plan for production of small bottles of hand sanitizer.
“Ironically, as we ramped up, we found that we would need to buy materials from China once again,” Krska said. “The U.S. no longer had any real small bottle manufacturing capabilities anymore.”
He acquired bottles from China and was purchasing labels from a Kansas manufacturer, which cost 15 cents each. The Chinese bottle manufacturer surfaced with an offer to print and apply the labels for 1 cent each.
The lesson amplified by the coronavirus pandemic is that economic forces continue to push U.S. manufacturing jobs overseas, he said.
“It is my belief,” Krska said, “that if we seriously desire to bring manufacturing and critical supply chains back to the U.S., it will require strong support from Washington.”
Moran, chairman of the Senate Manufacturing, Trade and Consumer Protection Subcommittee, said during the hearing U.S. manufacturers responded to COVID-19 by making new products and working to confront pressure from international suppliers and competitors.
“There is not a corner of the U.S. economy that has not felt the impacts of the pandemic,” the GOP senator said. “We have examples of manufacturing businesses in Kansas taking the lead in bolstering U.S. manufacturing to compete globally.”
He said the federal CARES Act poured trillions of dollars into the national economy in support of businesses and to help people remain employed.
Ravi Bulusu, founder of MolMas in Haysville, told the Senate panel the pandemic revealed faults in the U.S. health care system and affirmed “one sad, yet harsh reality” that the country lacked manufacturing capacity to produce protective gear, including disposable masks.
MolMas bought machinery and raw material from overseas to begin making masks, forced to pay many times pre-COVID-19 prices.
“Domestic production continues to not meet the demand,” he said. “While that might have since improved due to imports, it is not very clear if we do have a handle on their quality due to lack of adequate quality controls on the manufacturing process.
He recommended the federal government consider self-sufficiency in production of medical equipment a national priority in line with economic and food security. The U.S. government should provide incentives to new manufacturers, protect these domestic businesses from dumping of low-cost importants and to stay away from heavy regulation of these companies, he said.