The Man Who Brought Millions of Masks

“We literally grabbed as much as we could,” says Paul Hu, describing the moment when it seemed as though a crucial shipment of 200,000 respirators from China destined for the Czech Republic might slip away.

It was the middle of March, and the coronavirus pandemic that was about to consume the world had just started exploding across Europe. Faced with a potentially devastating shortage of crucial protective equipment in the Czech Republic, Home Credit and its parent company, PPF Group, stepped in to supply much-needed masks, gloves and respirators. Their point man for making it happen was Paul Hu.

“We had signed a contract with a supplier in Shanghai who claimed they could supply N95 respirators,” he explains.

“And the vendor said ‘okay, I will deliver 200,000 by Monday evening.’ The whole day we were talking to them, pushing them, trying to track the delivery… but even by midnight, there was still nothing and they had changed their promises and their story about five times – first saying ‘it’s on the way’ or even ‘we already delivered it’. So on Tuesday, I asked our own team to go directly to the mask factory to try to get the suppliers to hand them over directly. We were worried that someone else might get them.”

From a call center specialist to the man of the moment

Paul is the Head of Operations at Home Credit China, the largest subsidiary in Home Credit’s worldwide business that is headquartered in Prague in the Czech Republic.

He and his team have just come out of an intense month in which they moved mountains to supply millions of masks to their employees in China and the Czech Republic.

Just nine years earlier, he would have been one of those front-line employees.

“When I joined in May 2011, I was excited because it was quite an interesting international financial company, and consumer finance was a new animal in China. I felt that there is a bright future for Home Credit and the industry, and that Home Credit could become a real leader,” Paul recalls. “I started as a payment specialist – so I was handling customers who needed help handling their loan payments.”

One management trainee programme and multiple promotions later, he rose to his current role at the highest level of the company today, overseeing mission-critical functions.

“My job covers General Service, which is something like a very high-impact facility management, and of course the Operations teams in our call centers report to me,” he explains, with a bit of understatement.

But looking back, even through the lens of his exceptional career, he hardly could have imagined the vital role he and his team would play in protecting thousands upon thousands of people from an invisible menace.

“As cases were starting to be discovered in other cities, we had to keep pace”

Paul and his colleagues had heard vague rumours at the end of December of a mysterious illness in one of China’s commercial and transport hubs, Wuhan. They didn’t think much of it at first. But in early January, word of the novel coronavirus got out.

“People knew that somehow, something was going on, so already at that moment, as a company, we decided to cancel our Annual Dinner in Wuhan. At the same time, because we handle General Service, we also started to purchase protective materials for our employees – masks, disinfectants and so on.”

At first, it felt like an over-cautious approach, and the market reflected this. This initial calm was deceptive. “The prices of protective materials were more or less normal, about two or three times lower than what it is today, so it wasn’t difficult for us purchase them,” says Paul. “At that moment, the overall demand was for around 10,000 masks. Yet, just three or four days later we were already realizing that we should purchase masks for every back-office employee in the whole Home Credit China. The cases were rising very fast in Wuhan, and starting to be discovered in other cities as well, and we were having to keep pace with this information.”

But then China’s government took sudden and decisive action right before the Chinese New Year celebrations. That was when the gravity of the situation hit home.

An army of assistants

“The signal when we realized that this was going to be a big, big crisis was when the government announced the lockdown of Wuhan. Suddenly, at that moment, it was much more difficult to purchase masks – they all ran out. That was the 23rdof January; everything changed after that day.”

Within two days, Home Credit China’s executive committee had put together a crisis response committee, with Paul as one of its key members. “I spent almost the whole Chinese New Year talking to my team on the phone – they only managed to enjoy the first day of the holidays. By the 26thwe had called them all back to work.”

Paul’s task was to get protective material like masks and respirators into the hands of all of his employees. But the team quickly found out that the normal rules of procurement no longer applied.

“During the crisis, the government considered all these items to be strategic materiel. This meant that we weren’t entitled to get any of them,” Paul explains. “But at the same time, we had a responsibility to provide a safe environment for our workers. We couldn’t purchase anything, because suppliers would only sign contracts with healthcare companies or the government directly. That unintentionally led to a lot of middlemen springing up, which is one reason why the prices jumped so much.”

Negotiations with these new actors in a rapidly changing market were precarious and fluid; opportunities were appearing and disappearing just as fast, and it was hard to close a deal. Paul’s team had to get creative.

“As we were trapped in this situation, we came up with an idea: we have branch offices in over 300 cities across China, so we tasked all the team assistants in those branches to look for local sellers and just purchase as many masks as they could directly. We would then internally sort and distribute them around the company all over China.”

This solution also had the benefit of providing indispensable information back to Paul and his colleagues. “The assistants’ on-the-ground ‘intelligence’ was extremely valuable, because it gave us an indication of where we could focus our energies – for example, the crisis was not as bad in the north of the country, so we realized it would be easier to stock up from local sources there.”

Help also came from Home Credit’s headquarters in Prague. Seeing the situation in China, they also mobilized and started to secure masks in their own markets, particularly the Czech Republic, where there was still no crisis, and sent ten thousand masks and respirators.

Other shipments came from Home Credit’s expats, even in places where the company doesn’t operate, like Malaysia, Russia and Bulgaria.

And to secure a longer-term supply, Home Credit’s Public Affairs team in China got permission from the Tianjin municipal government, where Home Credit China is based, to make a contract directly with a mask production company, bypassing the need for middlemen.

“Though these channels, we were able to supply Home Credit China fully,” says Paul.

From China to the Czech Republic

It had taken just over half a month for the team to gather 400,000 masks – enough, they finally felt, for their massive workforce in China. But just as they thought they had won some respite, an even bigger challenge arose.

The coronavirus had reached the heart of Home Credit’s headquarters.

Paul became part of a new response team, made up of eight senior managers; his role was to coordinate the logistics. Still, even then he could not conceive of the magnitude of the task.

“We had an idea that we might be able to provide some support and share our experience with other teams around Home Credit’s global operations, maybe answer a few questions and so on. But we never imagined that we would become such a central part of the Group’s supply operations. And we had no idea there would be such great demand.”

It was on March 11ththat the request came from Prague: the Czech government needed help purchasing masks and other medical materials. At first, the list was short – just a ‘few’ hundred thousand masks.

The team found they could procure more, which turned out very useful as the size of the request grew rapidly to several million masks. “Even at the height of our own purchasing for Home Credit China, we had never purchased such huge amounts,” says Paul.

“So we changed the strategy – we didn’t just rely on a few suppliers, we decided to try as many suppliers as possible, paying them upfront to lock in the deals and taking delivery as well. We were simply getting as many masks as any supplier could send us, all to a centralized warehouse – we were afraid that it would soon become more difficult.”

He was right. China is the world’s mask factory, and within days, there were suddenly many more competitors: other companies and indeed other governments just trying to get whatever they could get.

The team went on the offensive. “We sometimes signed contracts where we knew that the suppliers couldn’t possibly deliver what we had agreed – we were only hoping to get a fraction, and we used these contracts as leverage to say ‘okay, you couldn’t deliver what you promised, but please give us at least a part of it.’” Sometimes, they ordered the same thing from three or four suppliers, in the hope that one would come through. “You might say it was wasteful, but in the end, we got what we needed.”

And what happened to the Shanghai manufacturer where Paul sent his people to hunt down the missing respirators?

“Our team was trying to get in touch with the relevant people at the company, but eventually we found out that they had indeed sent us the masks, via a local delivery company. And, in fact, it was that delivery company that hadn’t delivered them to our warehouse, so our team thought they would immediately rush to the delivery company to try to intercept the respirators there. But since there was a risk that we wouldn’t catch them, and we were already at the factory, we instead bought as much as the factory had on their premises at that moment – about 50,000 respirators – and stuffed them in vans which our colleagues accompanied to make sure that it really would reach us.”

“The consul had to be physically at the airport for us to export the masks”

With boxes upon boxes of masks and respirators, there was one last hurdle to overcome: getting them out of China and to the Czech Republic.

It turned out to be one of the most difficult issues. Chinese law stipulates that only Chinese companies are allowed to export from China, and it wasn’t entirely clear how the ownership structure of PPF fit this requirement.

The key lay in signing a contract in Prague to donate the material to the government, even as it sat in Home Credit’s warehouse in China, which allowed the Chinese government to formally allow its passage as it was now Czech government property.

“Even then, the consul had to be physically present at the airport while the cargo was being loaded to confirm that it was all theirs,” Paul remembers.

The long road to recovery.

Although it would be too early to declare any kind of victory as the rest of the world is deep in the throes of the pandemic, it is thanks in no small part to Paul and his colleagues’ tireless work that at least the Czech Republic has its hospitals, primary care and social welfare centers stocked with masks and respirators.

Along the way, Home Credit China’s External Affairs team in Hong Kong even managed to procure fifty life-saving ventilators for the country.

Tough times certainly still lie ahead, but Paul also sees the light at the end of the tunnel.

“Things are getting better, much better,” he says about China, which he notes is just a month and a bit ahead of the rest of the world. “Restaurants are opening again, although they still have reduced opening hours and mostly still operate as takeaways. It will probably take a month for everything to return to its previous pace – perhaps a bit longer for Wuhan. And, certainly it will take two or three months for all of China to return to a feeling of normality. The economic situation is also going to be challenging, after all the things that our local businesses went through. But I’m sure we’re already on the way to recovering.”

And yet, Paul and his team remain prepared to help, ready as ever. “We’ve already built up our supply lines, and the issues that existed with exporting and shipping to the Czech Republic have also been resolved. So it will be much smoother for us to fulfil any new requests since we already have this system in place. I’m confident we can support not just the Czech Republic but also other countries.”