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 2 positive cases at JCX and the situation in India has fully stabilized in our 2 plants. As a result of immediate and effective action by our management teams, the situation is controlled but still fragile. However, there is an alarming trend in Ocean freight as delays are getting longer and costs continue to rise.
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.
These factors combined have caused increased costs on the high volume routes, particularly to the United States, Australia and South East Asia.
- We have had no new COVID19 cases since our first 3 positive cases, 1 of which has now tested negative. The number of employees in quarantine has thus reduced to 18, which is a big relief.
- The situation remains worrying in Cagayan de Oro area though, we thus remain on high alert and continue to run with special shift arrangements.
- The supply of charcoal is significantly affected due to the restrictions in transport between regions, especially from other islands.
- The number of daily cases has been slowly coming down in Coimbatore and Tirunelveli.
- In both factories, the situation has truly stabilized and we operate with 70 to 90% of our workforce, continuing to enforce our strict social distancing measures and testing suspect cases when they appear.
- Our close collaboration efforts with the charcoal suppliers are also paying off and we have been able to increase our stocks to a comfortable level.
- The country has reacted firmly to the 1000 case outbreak of 3 weeks ago with extensive contact tracing and local lockdowns, but the spread is widening.
- 96 employees living in a locked down area were suddenly forbidden to come the factory: we have taken the initiative to test all of them, in close cooperation with the health authorities. Inside the factory, we had to immediately reorganise production with 12 hour shifts.
- This will have some impact on the production schedule which we are doing our best to minimize.
Vietnam, Japan and China currently have COVID-19 well controlled, but their borders remain practically closed.
Charcoal – There is no change in the charcoal supply situation: we have secured supply which allows us to run at full capacity, but the price remains at a very high level. Transport difficulties between islands but also inland between regions are seriously impacting the availability on the market, especially in Philippines and Indonesia.
- Germany: we continue to fully operate in Premnitz.
- Italy: we continue to fully operate in Basiano.
- UK: fully operational
- 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.
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.
Thank you for your continued support!
Stay safe and take good care,
Remko Goudappel CEO
Jacobi Carbons AB