As promised, this is to update you on the current situation at Jacobi Carbons and the way we are managing the consequences of the Corona crisis, making sure our people are safe and we serve you in the best way possible. Unfortunately, we have had our first 3 COVID-19 cases at our plant in the Philippines. As a result of immediate and adequate action by our management team, the situation is controlled but fragile. With no additional cases at our plants in India, the situation is well controlled. Special attention needs to be paid to delays and increased costs in Ocean Freight. I will continue updating you on a weekly basis as the situation remains fragile.
- Unfortunately, we’ve had the first 3 COVID-19 cases in the Philippines at JCX last week. One was identified in the factory: our team reacted very quickly sanitizing the relevant area of the factory, isolating his contacts and starting testing. The other 2 cases were among the employees who were already kept in preventive quarantine. As of today, we have already tested 40 people: 37 are negative and out of the 3 positive, only one has mild symptoms.
- 6 days after the first case was identified, we are confident that we have avoided a spread inside the factory. This is thanks to our strict and systematic precautionary actions taken since February – social distancing, masks, special transport arrangement for our team, close collaboration with the local authorities, and contingency plan in place.
- 45 employees remain in quarantine. The factory is operating but with reduced personnel and different shift arrangements which causes high pressure on the production team, particularly in post-activation. We have a good cooperation with the authorities and medical facilities. However, there is still a risk that the factory will have to shut down in case of an increasing number of cases.
- There is an increase of cases in the Cagayan de Oro region, we see districts locked down and factories shut down. We thus anticipate stricter community quarantine measures from the local government.
- The number of daily new cases is slightly down in India (70,000).
- At our Coimbatore factory (JCB), we tested 162 employees, out of which only 6 are positive and 54 yet to be tested: we haven’t had any new case in the past week. We have been able to increase the presence from 30% to 60% of employees as the number in quarantine reduced. This is (partially and gradually) relieving the pressure on the production team.
- In our Tirunelveli factory (JCN), we still have 1 positive employee and are engaging 80% of the workforce.
- Both operations are running at full capacity.
The positive in both India and the Philippines is that we have a very good collaboration with the health authorities and access to testing with a relatively quick test-results. The experience we have built up in India is extremely valuable and gives us confidence to manage the worries of our own people and of the community around us. We have also secured charcoal supply, although the pressure on price and disruptions remain as the charcoal producers and transporters are facing the struggle with the pandemic as well. We have been able to avoid major delays in production although the circumstances are difficult for our people, and we know that we will not return to a “normal” operation in the coming months…
- After very quiet months, 1050 cases were found in one company in Sri Lanka which prompted curfews in one district. It seems that the spread has been contained by the swift action of the government (as before) and we do not expect a big lockdown.
- Nevertheless, we have intensified our measures at the plant and are ready to shift to a skeleton operation should we have to.
Vietnam, Japan and China currently have COVID-19 well controlled, but their borders remain practically closed.
- Germany: we continue to fully operate in Premnitz.
- Italy: we continue to fully operate in Basiano.
- France: is fully operating as well with full staffing, including the AMCA team.
The infection rates in several countries in Europe have increased above critical threshold levels. Therefore, in countries like Spain, France and the UK we have reinforced measures to limit site access and safeguard return to work policies. Although the situation has worsened over the past few weeks, we have no COVID-19 cases and are able to run all our operations at full scale.
Our production facility and warehouse locations remain fully operational, however, at a heightened sense of alert, as regional surges continue to occur. Fortunately, we have no COVID-19 cases at our facilities. We continue our efforts at our facilities to maintain the highest focus on preventive measures to keep our people safe and to safeguard continuous operations.
Ocean freight – reduced vessel availability – delays & increased costs
Since Q1 2020, all shipping lines are continuously reorganising and consolidating their services with focus on their most profitable routes, optimising their loading ratio per sailing.
Although overall demand for container movements is now much increased, shipping lines are still being careful and not bringing back additional services at the rate necessary to meet this higher level of demand on many routes.
These actions have resulted in delays due to:
- Reduced shipping schedule on some routes, in itself leading to a delay but compounded by some vessels then being overfilled with potential for being “ bumped off “ at the last minute to wait for the next vessel;
- Shortage of empty containers for loading , especially in India, delaying containers leaving our factories when scheduled and possibly then missing the vessel planned for;
- Some transit times have increased as services have more stopping off ports.
Together these factors have caused increased costs on the high volume routes, particularly to the United States, Australia and South East Asia.
As everyone is focusing heavily on controlling the spread of the virus and maximizing our production output to serve our customers, we are maintaining our focus on safety as well. There has been no change to our policy in the past weeks:
- At all our plants, we have sustained strict social distancing, employees performing new tasks with modified work shifts, and restricted presence of certain employees and contractors at the factories.
- Our office teams continue working from home until December 31, 2020. If a visit to the office is necessary, strict rules are being applied in terms of hygiene, social distancing and ensuring a limited number of people in the office at any one time.
- Travel policy remains the same and is still very much restricted in order to protect ourselves and others, and to help contain the spread of the virus.
- We still do not accept visitors to our plants until the end of the year. Visitors may introduce a risk which could lead to being forced to close down the site by local authorities. In order to do everything in our power to keep our sites in full operations, we cannot allow visitors until December 31, 2020
Postponements of orders during Q4 are currently causing problems in our supply chain. It is causing inefficiencies that we cannot afford ourselves. That is why we are not in a position to allow any (confirmed) order postponements during the remainder of the year. We count on your understanding and support.
Thank you! Stay safe and take good care,
Remko Goudappel CEO
Jacobi Carbons AB