According to the Chinese government mouthpiece Global Times, 70% of Shanghai’s 1,800 essential industrial businesses have resumed operations.
However, a survey showed that around half of the companies operate at one-third of the total capacity.
The survey results were reported by Sina Finance from the Shanghai Securities News. It collected input from 667 listed companies in the Yangtze River Delta region, with 142 in Shanghai, 258 in Jiangsu province, 200 in Zhejiang province, and 35 in Anhui province.
The survey shows that 92% of the listed companies were affected by the COVID pandemic. Only 46.78% were operating at more than 90% capacity. More than 20% of the companies were resuming at 60%.
In that,48.89% of the 142 Shanghai companies were operating at under 30% capacity. Their work and production rate range only from 30% to 60%.
Among the 666 companies on Shanghai’s white-list, 368, of them have maintained production under the closed-loop management.
The main reason for low resumption and production rates is logistics disruptions caused by lockdown measures. According to the report, more than 72.41% of the listed businesses were affected by logistics and supply chain issues.
62.82% of them had limitations in personnel flow, R & D, production, and sales.
Despite making it to the white list, some companies are still confused about the standards for work resumption.
Sina cited a person in charge of a semiconductor material company, who said that the given standards weren’t clear. He wondered whether to really resume work and said they would wait for the next notice.
In the meantime, an executive from a communications equipment supplier was feeling uneasy. As orders were piling up, he was concerned about remote management and delivery challenges.
Logistical blockages affect not only businesses in restricted areas but also other companies affiliated with them.
According to the chairman of a semiconductor company, upstream raw materials were out of stock due to logistics congestion. He said that the express delivery companies such as SF Express and Huisen in Zhangjiang were still unable to send and receive parcels smoothly.
The chips, previously sealed at various express delivery points, have been unable to be delivered for more than 40 days. The chairman said it made the company’s production unsustainable.
A person in charge of a Zhejiang company said that the Shanghai epidemic has greatly impacted the company’s production and operations. He said that logistics were blocked, some suppliers stopped working, and timely deliveries couldn’t be made.
The work resumption rate doesn’t mean that companies will resume production effectively either.
The person in charge of a special equipment manufacturer said that not all companies were properly prepared given the unexpectedly prolonged lockdown in Shanghai.
According to the expectation of the time, companies would have arranged spare parts and materials for only two weeks and organized some employees to stay in the factory to maintain a minimum production. But because the closures continue to remain, some factories have basically stopped.