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. We do see new COVID-19 cases at our sites in India, but it is limited and well controlled. We do see an increased risk in the Philippines. While our factories are running full, we currently have a significant number of colleagues in quarantine: 101 in India and 32 in Philippines. I’ll continue updating you on a weekly basis as the situation remains fragile.
India – In India, the daily number of new COVID-19 cases remain around 80,000 and the spread is continuing, particularly in Coimbatore. Following the first cases in our Coimbatore factory (JCB), we have set up a test “camp” at our facility, allowing us to continue testing with the full support of the authorities. As of today, we “only” have 6 positive cases out of 113 tests done (fortunately only light or no symptoms). This shows that the situation is under control thanks to the support of our employees, the testing efforts supported by the authorities and the quarantine procedures we have implemented using external facilities. Nearly half of our JCB team is still in (preventive) quarantine at the moment. It is obvious that this situation at JCB cannot be sustained for too long; the system we have implemented will allow team members to gradually come back to work after their quarantine period during the coming weeks, exactly the way we handled it at NOVA (JCN, Tirunelveli).
At NOVA, we have 2 new isolated cases who were infected in the community, bringing the total to 3. Currently, 80% of our team is on-site at NOVA. In both factories, we are operating with rotations and extended shifts in order to maintain a minimum manpower at the plant at any point in time, yet maximizing the output of our plants. Despite the reduced manpower in both plants, we are able to sustain close to full output due to the dedication of our teams.
The Philippines – While the daily number of new cases are around 2000 in the Philippines, we have recently seen a fast spread in Cagayan de Oro: districts are put under quarantine and several factories in our surroundings have been shut down. Although we have no case in the factory so far, we have had several suspect cases this week which are currently being tested. This has forced us to put 32 employees, including senior managers, in quarantine pending the results. Should we have a case in the factory, there is a risk that the authorities (PEZA) will force us to shut down for 2 weeks. Although the situation is very fragile, we are running at full capacity despite the limited personnel thanks to the dedication of our employees.
Despite the challenges, we see some positives as well:
- Our good collaboration with the health authorities and the access to testing with relatively quick test results.
- The experience we have built up in India is giving us confidence to manage the worries of our own people and of the community around us,
- Charcoal supply that we have been able to secure, although the pressure on price and potential disruptions remain since the charcoal producers and transporters also struggle with the pandemic.
This has allowed us to avoid major delays in production, although the circumstances are difficult for our people and we know we will not return to a “normal” operation anytime soon.
Sri Lanka, Vietnam, Japan and China currently have COVID-19 well controlled, but their borders remain practically closed. The main challenge remains the continuous pressure on coconut charcoal all across Asia due to the high demand, limited supply and transport challenges.
We are back to full operations while fully respecting social distancing and hygiene rules. If a resurgence happens close to one of our operations, immediate precautionary actions are taken.
- 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.
- Our operations in Spain, the UK, and Sweden are facing no disruptions.
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. You are kindly asked to anticipate these potential shipping delays to result in longer lead times and consider that when scheduling new order requests.
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
Your Jacobi representative will stay in close touch with you to understand your changing needs and communicate about any prospective supply delays, making sure that we can continue meeting your needs. Pro-active communication is of absolute importance to make sure we can anticipate and serve you best. In order to meet the market-needs together, we need to work closely together in maintaining the right stock levels.
Thank you for your understanding and support.
Take good care.
Remko Goudappel CEO
Jacobi Carbons AB