What impact will the "Novel Coronavirus" have on the valve industry?

2020-03-24

Since December 2019, Wuhan City, Hubei Province has continued to carry out influenza and related disease monitoring, and found multiple cases of viral pneumonia, all of which were diagnosed as viral pneumonia/lung infection. The new pneumonia is transmitted from person to person. The National Health Commission has decided to include pneumonia caused by the new coronavirus under the management of Class B statutory infectious diseases and adopt prevention and control measures for Class A infectious diseases. As of 21:00 on January 7, 2020, a new coronavirus was detected in the laboratory. On January 20, Xi Jinping issued important instructions on the pneumonia caused by the new coronavirus, emphasizing that the safety of people's lives and health should be put first and the spread of the epidemic should be resolutely curbed. On January 30, 2020, the World Health Organization announced that the pneumonia caused by the new coronavirus was a public health emergency of international concern, emphasizing that travel and trade restrictions were not recommended, and once again highly affirmed China's prevention and control measures.
     
As of 14:00 on March 2, 2020, the National Health Commission has received a total of 80,174 confirmed cases reported from 31 provinces (autonomous regions, municipalities) and the Xinjiang Production and Construction Corps, 715 suspected cases, 2,915 deaths, 44,518 cases cured and discharged, and 7,110 severe cases.
As the disease is still ongoing, many factories are unable to resume work. Shanghai, a pioneer in the valve industry, also attaches great importance to the epidemic. As an internationally renowned brand
Cameron, UK
Strictly implement a series of relevant policies in accordance with the requirements for resuming work. For example, the following arrangements are made for consultation:
⑴ Measures for enterprises to do a good job in epidemic prevention and control and resume work and production in an orderly manner:
When entering the factory, you need to wear a mask. There is a temperature measurement station at the gate. You line up in an orderly manner at a distance of 5 meters for temperature testing. You can enter the factory if your temperature is not higher than 37.3 degrees.
⑵Adjust working hours and work system:
The office staff is the purchasing department, sales department, technical department, etc. who work in shifts. ≥3 people can enter the office every day and they need to be 3 meters apart. The working hours for staff one are 8:30-16:30, and staff two areWorking hours are from 9:00 to 17:00, the working hours of staff three are 9:30~17:30 (The above time is tentatively subject to change according to the development of the epidemic)。
The workshop staff takes turns to manufacture boring machines, lathe processing centers, grinders, drilling machines, welding machines and cranes.≥3 people are allowed to enter the office every day, and they must be 3 meters apart. Personnel 1 works from 8:30 to 16:30, Personnel 2 works from 9:00 to 17:00, and Personnel 3 works from 9:30 to 17:30 (The above time is tentatively subject to change according to the development of the epidemic)。

⑶ Adjust the use of various holidays such as salary and benefits, social security contributions, wage payments, annual leave and welfare leave:
Salary calculation method = guaranteed salary + daily salary, social security payment as normal, salary payment method changed to online bank remittance, personal leave and annual leave adjusted to 10 days, welfare leave cancelled (Workshop employees in Hubei Province will not receive salary but will be given a 200 yuan subsidy per month, while clerks will receive normal salary and a 200 yuan subsidy per month.)。
⑷ Handling of labor relations for employees who are unable to return to work on time due to the epidemic:

If the employee is unable to return to work on time, he/she needs to report the situation to the company. The company will terminate the labor contract or retain it based on friendly negotiation between the two parties and the employee's attention to the situation.
Employees in Hubei continue to retain their positions)。
⑸The company cafeteria sells vegetables, meat and poultry to employees.
   
Since the outbreak of the epidemic, the sales rate of imported valves and domestic valves has fallen sharply. According to the calculation of 2019, the average monthly growth was 35%, and it was only in March 2020 that it reached the total of one month. The raw materials have increased by 10% compared with 2019, and this figure is still growing. What is more terrible is the delay in resumption of work and the obstruction of production. In order to prevent the spread of the epidemic, many local governments have issued notices on postponement of resumption of work. The resumption of work and production of machinery enterprises has been generally delayed. More than 90% of enterprises have been delayed due to the postponement of resumption of work, resulting in a significant reduction in actual production time, and the production and operation plan in the first quarter was forced to adjust. Traffic restrictions have caused difficulties in logistics and transportation. After the outbreak of the epidemic, logistics and transportation, especially inter-provincial logistics, have been basically suspended, which has had a significant impact on production activities. On the one hand, it is manifested in the poor transportation of raw materials, spare parts, and outsourced and purchased parts, which makes it difficult to guarantee production; on the other hand, it is manifested in the difficulty in delivering the products that have been sold, and it is difficult for equipment commissioning and installation personnel to arrive at the site for work. The upstream and downstream of the industrial chain are not well connected to resume work, and the supply chain is difficult to guarantee. The machinery industry has a long industrial chain, and most of the enterprises in the industrial chain are scattered in different regions across the country. Due to the different epidemic situations in different places and inconsistent suspension and resumption periods, the difficulty of matching production and supply between upstream and downstream enterprises has increased significantly, destroying some fragile industrial ecosystems. Enterprises are under multiple pressures and have tight capital chains. Affected by the epidemic, the market and production have stagnated for a long time, resulting in order losses and reduced capital recovery, but enterprises still need to pay employee wages, social security and other expenses, and bear a heavy burden of labor costs. At the same time, the difficulty in delivering orders and executing contracts caused by the stagnation of production has put enterprises under pressure from rising default costs. In addition, expenditures such as credit interest and fixed costs have also put obvious financial pressure on enterprises. The impact on foreign trade exports deserves great attention. The World Health Organization has announced that the new coronavirus pneumonia epidemic has constituted an international public health emergency. Affected by this, some machinery companies have received notices of delayed delivery, and some companies have also received messages of order cancellation. Although such incidents are not common at present, the subsequent trend needs to be closely monitored, especially the impact caused by the transmission of the industrial chain is still difficult to estimate. It is difficult for grassroots employees to return to work. In order to control the spread of the epidemic, all localities basically require people returning from other places to self-isolate at home for 14 days. In some areas, communities and village committees even force people returning from other places to isolate themselves. In addition, they also strictly limit the number of people entering and leaving by issuing entry and exit permits and registering entry and exit. The entry and exit of normal residents are also restricted, making it difficult for grassroots employees to return to work. There is a gap in the supply of epidemic prevention materials. The production and manufacturing process of machinery enterprises is highly collaborative and relatively labor-intensive. Enterprises that resume work and production consume a large amount of masks, disinfectants and other epidemic prevention supplies every day. However, there is still a large gap in the market supply of these materials, and it is difficult to ensure sufficient supply.



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