The German publication www.k-zeitung.de published an article on the effects of the spread of coronavirus disease on the plastics industry in China. We bring to the attention of its readers in abbreviated form.
Now that the coronovirus is spreading in Germany, the situation in China seems to be calming down. After the shutdown of many plants, which lasted several weeks, production is growing again.
Sandra Füllsack, Managing Director of Motan Group, expects a 30 percent decline in turnover in China, which the company will not be able to compensate for this year. She noted: “Our company in China worked only partially until the end of February. Now only 50% of our customers are active again. Orders are pending, in some cases we saw a gap in the supply chain for our production in Germany. In addition, there were additional costs for hygiene and safety measures. ” According to Fullzak, the Chinese government has promised support for companies: rental payments will be canceled, and tax breaks are planned.
The Wittmann Gruppe management finds it difficult at the moment to fully assess the impact of the situation on the business; it proceeds from the fact that in the first half of the year the minus will be 40% compared to the same period of the previous year. The company’s plant in Kunshan (PRC) was closed for two weeks by order of local authorities. The portal quotes Michael Wittmann, director of Wittmann Kunststoffgeräte, who said: “When the company reopened, production could only begin gradually, because, on the one hand, part of the workers were not allowed to move, and on the other hand, the supplier companies services also started to work gradually. ” More than 90% of employees returned to work. Michael Wittmann is confident that the number of new cases of virus infection in China is currently declining, which also has a positive effect on consumer behavior and gives confidence that the situation is normalizing. It is not yet possible to speak of a complete normalization of the situation. Many companies limit visits to suppliers to a minimum.
According to Sven Wolf, director of Leistritz Extrusionstechnik, orders for the first quarter of 2020 in China can be forgotten. Nevertheless, he sees the situation positively: “If there is no investment in the Chinese economy within three months, there is a huge need for products. Therefore, we believe that we can also generate relevant orders. All discussions with our customers indicate exactly that. ” The Chinese Leistritz factory in Taicang was completely closed for three weeks due to the Covid-19, but now work has resumed completely.
Frank Stieler, CEO of the Krauss Maffei Group, also finds it difficult to assess the impact of the crisis, but confirms that his company in China is suffering from reduced demand, production downtime, supply disruptions and staff shortages. Since March 9, 2020, the Chinese subsidiaries of the company in Haiyang and Shanghai have been operating normally again. According to Frank Stieler, at the end of March, the new Krauss Maffei plant in Jiaxing will open, the opening of which had to be postponed due to the coronavirus.
Gerhard Böhm, Managing Director of Sales for Arburg, hopes the coronavirus will only have a short-term impact on the investment decisions of its customers in China. Plastic injection molding machine manufacturer does not have production facilities in China. Gerhard Boehm believes that business is returning to normal, but so far cannot quantify how the epidemic affected sales of the company’s products in China. He emphasizes that Arburg is pleased that its parent company is located in Lossburg (Germany). In addition, the company has a high level of vertical integration – more than 60%. Gerhard Boehm notes: “At present, we do not see any negative consequences of the situation with coronavirus in our own supply chain. This means: we can supply products without restrictions. ”
Haitian, China’s largest manufacturer of plastic injection molding machines, said work has gradually resumed since February 10, 2020, after employees rested after the Chinese New Year at the end of January. The company believes that production capacity will gradually return to normal. ” With the exception of production staff, most employees, including sales and service, will continue to work from home for some time.
European plastic manufacturers also have branches in China and fear the negative effects of coronavirus. According to BASF CEO Martin Brudermüller, the economic impact is already palpable due to the interruption of the supply chain, which leads to downtime. The first two months of the year were “very difficult” for the BASF group due to lower consumer demand. Since February 17, 2020, work in China has resumed at major facilities, although not at full capacity. Martin Brudermüller does not expect that “the effects of coronavirus can be fully compensated for within a year.”
According to k-zeitung.de, Covestro has already lost about 60 million euros due to production losses associated with the spread of coronavirus in China. Introducing the 2019 annual report, Covestro CEO Markus Steilemann said there was a “significant reduction in production” at Chinese production sites: “Even today, capacities are not fully operational, but supply chains are starting up again. We see light at the end of the tunnel. ”
The management of Lanxess is not so pessimistic: most of the Lanxess production sites in China resumed production on February 10th. “At the moment, it is difficult to give a reliable forecast for the second half of the year. However, we believe that business can recover quickly after the situation is under control, and we are already planning accordingly, ”commented Ulf Dressler, Lanxess Vice President of Corporate Communications for APAC. The company expects losses from 50 to 100 million euros throughout the year