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Surgical masks are made at Medicom Inc., in Montreal. Canada's federal government has pledged $29-million to help secure a reliable supply of respiratory masks, as part of a $39-million investment by Medicom.Christinne Muschi/Christinne Muschi/The Globe and

The federal government has committed $29-million to help secure a reliable supply of respiratory masks for Canadians in future health crises.

Ottawa has pledged the amount as part of a $39-million investment by AMD Medicom Inc., Canada’s largest personal protective equipment maker. Medicom will build a Montreal-area plant to make “meltblown” polypropylene.

The material, derived from oil, is used to make the inner filter in surgical, pediatric and N95-type respiratory masks. Innovation Minister François-Philippe Champagne is set to announce the investment on Thursday.

Canada, like many other nations, was caught out and faced a PPE shortage early in the COVID-19 pandemic last year as several countries seized control of facilities on their territory or directed that export-bound product be kept for their citizens instead.

That affected Medicom, whose Shanghai factory was taken over by Chinese authorities, and the company was prohibited from exporting masks from its Taiwan and French plants. There were also worldwide shortages of meltblown as global mask demand skyrocketed.

In response, the federal government funded the construction of a 3M plant in Brockville, Ont., to make N95 masks, and entered into a 10-year contract with Pointe Claire, Que.-based Medicom for 20 million N95 masks and 24 million surgical masks. That order backstopped Medicom’s construction of a Montreal-area mask plant, its first in its home country.

But Medicom CEO Ronald Reuben said while the mask plant quickly went into operation last summer, “the limiting factor was the meltblown to go inside the mask.” Facing global shortages, Medicom, which sourced meltblown from third parties, had to contend with prices 20 to 30 times higher than normal as suppliers tried to push the company to lock in for multiyear contracts, he said.

“Canada as a country had no sources of supply for this type of materials,” unlike other G7 countries, Mr. Reuben said. “We knew we were going to be in trouble” if the company couldn’t secure a steady supply.

He said conversations last year with government officials quickly evolved into plans for the new meltblown facility. “They knew this was a long-term play, it wouldn’t happen overnight. But for purposes of supply chain resiliency, they knew this was an important piece of the puzzle we needed in Canada so as not to be reliant on other countries.”

Mr. Champagne was not available for comment.

Mr. Reuben said the meltblown plant, when fully operational in 18 months, will have capacity to make 30 million N95 filters annually, but could also scale up “on short notice” to produce 10 times that amount, if needed.

The factory will employ at least 22 people and create 16 co-op positions for students to do research and development work, he said. It will also supply other domestic mask makers and could even produce material for export.

Medicom had a transformative 2020. After finding itself in the middle of a geopolitcal tug-of-war for PPE supplies that exposed frailties in the global trade system, the company, a key supplier to the medical sector worldwide, launched an unprecedented expansion.

It spent $100-million-plus on capital projects – more than 10 times its usual pace – building new factories in Canada, France, Britain and Singapore. The plants were backed by long-term supply agreements with governments to avoid being left with unproductive excess capacity when the pandemic subsides, a reality that has hurt manufacturers after past outbreaks.

Medicom also expanded existing facilities in the U.S., Taiwan and France.

The company got its start in 1988, when Mr. Reuben dropped out of economics studies at McGill University to sell medical gloves in response to the era’s AIDS global health crisis.

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