Amid the Covid-19 pandemic, many countries and medical facilities realise that they are short of suppliers, notably ventilators. 

As the disease is respiratory, ventilators are essential for many ICU patients to pass through the most critical time. The surge of infections also forced some medical professionals to make the hard choice of which patients to give the limited ventilators to. 

And everyone is buying more ventilators, just watch this video from Andrew Cuomo, governor of New York state: 

 

While international manufacturers are running at full backlog and zero stock, many are trying to source ventilators from China. 

For those who have tried, the following might sound very familiar: 

Middleman:

We have 1,000 (or 780, or 500) ventilators right now at the (often Aeonmed) factory in Beijing.

However, since everyone is fighting for it, we can only keep the stock for you for 24 hours.

To get the goods, you need to give us your government authorisation letter, proof of funds, as well as assigning a company in China to handle the export.

After we have verified all your documents – you can come to the factory to inspect the goods and make payment. 

You will sign the contract directly with the factory. “

You are like wow, everyone is looking for Aeonmed VG70 – here I can find hundreds of units readily available. Although the price is 3 times the normal price – in this market it is more important to get hold of the machines right?

Be careful! 

Yes they can show you the units at the factory after you rush all your resources to provide all the documents on time. However, the machines lining up there DO NOT belong to you. 

After payment, you are supposed to ‘take the machines with you’. However, now the narrative changes. Typically one of the two: 

“Sorry someone with strong government connections just jumped the queue, and took possession of these units.” Or “Very sorry that there is a last minute government directive – these machines will be used for government donation to a friendly country.” 

With the same ending: “Yours will have to wait – but we are committed, how about we change current stock into pre-doer, and deliver you 20-30 units per day?”

And “oh by the way, we will need to change the contract signing body from the factory to another company, because of ….” 

You are dumbfounded by now, and wondering whether you can get the machines at all, or get your money back. 

They DO NOT have idle ventilators waiting for customers

Few have noticed that actually the Chinese government announced its ventilator production capacity at a press conference on 30 March:

”Currently there are 21 manufacturers of invasive ventilators in China, amongst which 8 have received CE certification, with a combined weekly production capacity of 2200 units, or ⅕ of the global production output. 

By the end of March, the manufacturers have already booked 20,000 units on the production pipeline. So a huge backlog to clear.“ 

Aeonmed only produced about 1800 units in March, in total, and its order backlog stretched until the second half of the year. How would it even be possible that 500 or 1000 units are lying around the factory waiting for buyers? 

Electronic components are the biggest bottleneck to production capacity increase

Even if they have those units available? Would you think that they will sell this to an unknown customer, rather than through its existing channel of partners and distributors? How would the distributors think if that is the case? 

So would you believe that they would ever allow you to sign the deal directly with the factory? 

How to avoid being scammed?

Talk to us (hello@mworks.asia). We might not be able to supply you with the ventilators ( it is not our business), but we can definitely tell you whether a source you have is genuine or scam. 

We have the right connections to do so. 

But let’s really hope that all the lockdown and curbing measures will be effective, that we will not need that many ventilators after all. 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.