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. The good news this week is that the teams in both India and the Philippines have been able to contain any further spread of the virus; we still count 3 positive cases at JCX and only 2 cases in India. As a result of immediate and effective action by our management teams, the situation is controlled but still fragile.
- The situation is worrying in Cagayan de Oro area, as the number of daily cases is increasing and now exceeds 100.
- Since our first 3 Covid cases at our Philippines factory (JCX) last week, we have traced and tested a total of 59 people and have had zero new positive cases. This shows that thanks to our preventive actions taken for several months and thanks to our swift reaction to the first cases, we have been able to contain the spread of the virus.
- We had up to 60 employees on preventive quarantine last week, and although the number is now down to 26 the running of operations is still quite challenging.
- In India, the spread of the virus seems to have peaked, country wide as well as in Tirunelveli and Coimbatore.
- At our Coimbatore factory (JCB), we have been able to go back to 80% manpower, which is a great relief 3 weeks after our first positive case. Furthermore, the 6 positive cases we had have all retested negative!
- In our Tirunelveli factory (JCN), we have 1 new positive case last week who was already isolated. We thus have 2 positive cases but are confident there hasn’t been transmission in the factory. We are engaging 80% of the workforce as we continue to enforce strict social distancing rules.
I am very proud of the way the management teams in both India and the Philippines have contained the spread of the virus in the plants through enforcing a very systematic and diligent approach.
- The country has reacted firmly to the 1000 case outbreak of 2 weeks ago, with extensive contact tracing and local lockdowns
- We have also acted swiftly: reinforcing social distancing measures, running random testing and putting a few employees in preventive quarantine. We have also ensured sufficient stocks of raw material and chemicals at the plant in case the situation would get worse.
Vietnam, Japan and China currently have COVID-19 well controlled, but their borders remain practically closed.
There is no change in the charcoal supply situation: we have secured supply which allows us to run at full capacity, but it comes at a cost. The price remains at a very high level and supply disruptions remain since many charcoal producers or transporters struggle with the virus situation in India, the Philippines and Indonesia. Sales price increases for all our coconut-based AC as of October 1 will be strictly enforced.
- 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. We do have a positive case in the sales force; this person is working from home and in quarantine.
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.
- 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.
Thank you! Stay safe and take good care,
Remko Goudappel CEO
Jacobi Carbons AB