Dear valued customers and partners,
Even though Jacobi has been able to recover production output to 100%, we are still faced with unprecedented challenges due to the Covid-19 crisis. In most countries, the lock downs have been lifted but the conditions are still restricted due to the precautions taken to prevent spreading the virus. In India, we run the highest risk; we are still producing under difficult circumstances while the corona virus spreads at a worrying pace throughout the country. In all countries where we run operations (Asia, Europe and the USA), we continue to impose exceptional rules to protect us and deal with the concerns of the local communities. In most countries logistics, supplies and contractor services are still a challenge and have increased our costs in order to safeguard security of supply to our customers.
The fight against Covid-19 is still likely to last for some time and continue disrupting supply chains for months to come. In this context, it is our responsibility to find sustainable ways to maintain security of supply to our customers, while preserving the health and safety of our employees. This has forced us to continue the measures taken:
- Ensuring hygiene, social distancing rules in our factories, and special employee transport arrangements.
- Implementing skeleton operations when needed and operating under special shift arrangements and overtime for production workers.
- Relocating production between factories in different countries, shipping feedstocks between factories, and creating new production capacities for contingency in all our Asian plants which implies pulling investment plans forward.
- Sourcing charcoal in remote areas, building higher stock levels, and supporting charcoal manufacturers (funding, commitments, collaboration, etc.) who are facing tremendous challenges with their manpower and supply chains.
- Using alternative shipping routes, ports and logistics providers in efforts to secure supply.
- Contracting land transportation, while facing limited availability of forwarders and longer delivery times for cross-border transports as well as cross-regional shipments in India and the Philippines.
- Storage in external warehouses, due to own storage space being occupied.
All of this translates into higher costs; some are temporary, but others are permanent. These actions and their related costs are needed to strengthen our Contingency Plan against the ongoing crisis, and to safeguard the supply chain in the future.
On this basis, Jacobi has no other choice than to prolong the price surcharges during Q3. We are monitoring our costs carefully and will communicate about our approach for Q4 in September.
At the same time, charcoal costs have increased due the supply disruptions in several regions. This has also become a factor and may necessitate an increase in our base pricing for coconut shell based Activated Carbon.
Rest assured that our global manufacturing & supply chain organisation continues to work as ONE team to get us through this crisis in the best way possible. We are extremely thankful to all our people, who work under difficult conditions, and yet find solutions to new problems every day.
Your understanding and acceptance of these surcharges are greatly appreciated.
Remko Goudappel CEO
Jacobi Carbons AB