Restrictions in China take control of Alicante industry once again

There has long been talk of a perfect storm that has had a rough impact on the industry in general and Alicante in particular. It all started with the outbreak of the pandemic in March 2020 and then continued with the rise in energy and raw material prices, the associated inflation and, if that wasn’t enough, the war in Ukraine. In this regard, the only positive news was the improvement in health and the relaxation of restrictions, but not for them. Because the zero-case policy maintained by the Chinese authorities once again shanghai lockdown and other enclaves of the Asian giant add a new twist to the already complex situation. The decline of activities in the Asian giant’s numerous factories and the collapse of its main port, worsened the supply problems of companies in the province and made shipping and goods more expensive again.

The new lockdown affecting Shanghai, China’s financial capital and most populous city, began at the end of March, keeping a population of nearly 26 million locked at home. How could it be otherwise, that strict precaution, which reaches other city centers with varying degrees of intensity, is already being implemented. direct reflections on the international economy. Productivity has not stalled, thanks to extreme initiatives such as encouraging workers to work in factories, but it has been running at half speed for weeks already. In addition, the port of the city practically collapsed.which supply chains are also highlighted.

And the consequences of all this are already beginning to be felt by Alicante companies, no matter how far away they are, more than 10,000 kilometers away. Shoe confirms raw material handling problems Both from Asian country due to delays and higher prices. And not only that. Marián Cano, president of the national and Valencian employers’ association, reminds that the Asian country is among the top ten exporting countries of the shoe manufacturers in the state, so “consumption is also felt constrained.” Rafael Bernabeu, the general manager of J’Khayber, points out that there are Chinese factories from Elche working for the company and fortunately not in closed areas. The problem may be caused by delays in transportation. “Currently, he states, we don’t have a large amount of product held in ports, but We’re worried about what might happen in the face of the summer campaign if the situation continues.

The toy is also concerned about production shutdowns and delays already occurring in deliveries. Manufacturers’ general manager, José Antonio Pastor, confirms that there is great uncertainty in the industry due to price increases. And for example, a button. Miniland company from Onil buys the electronics for its products in China, and according to its manager Rafael Rivas, “So far we have weathered the storm thanks to stock. However, the price of a container rental is more expensive again, going from 2,000 euros before the Pandemic to 17,000 euros and now falling And to buy anything, They want 30% advance“.

Pepe Serna, president of the textile association Ateval, assures that there are delays in deliveries of both raw materials and semi-finished products, as confirmed by León Grau in charge of Hilaturas Miel. Although we don’t buy directly from China, “we work with suppliers who do and have trouble serving us.”

Finally, Luis Rodriguez, president of the Alicante Province (Fempa) Metal Entrepreneurs Federation, states that his industry has not yet directly realized the effects of China’s confinement. the threat is there and will eventually be confirmed“.

Relaxation of restrictions in Asian country

Shanghai authorities opened a door of hope after announcing that restrictions will begin to ease after a drop in coronavirus infections. Citizens will especially be able to return to supermarkets, shops, pharmacies and shopping malls, and restaurants will be able to sell takeout. Vegetable markets will also receive permission to continue operating.

The announcement, however, was met with skepticism by a population exhausted by the strictness of China’s lockdown and zero contagion policy since the outbreak of the pandemic. Additionally, numerous cities, including Beijing itself, are experiencing varying degrees of restrictions as a result of outbreaks produced by the omycron variant.

In any case, and even if things are moving towards a certain normal, it remains to be seen how long it will take for both manufacturing and port activity to recover, and even when tensions in international supply chains will persist.

Source: Informacion

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