As the epidemic situation "rises", Dongguan Lens Technology suspends production activities!

Affected by the new round of epidemic, Lens Technology recently issued an announcement stating that its wholly-owned subsidiary Lens Technology (Dongguan) Co., Ltd. (hereinafter referred to as "Dongguan Lens") has arranged centralized isolation and nucleic acid testing for all employees, and has suspended production activities to fully cooperate with the government's epidemic prevention work to curb the spread and spread of the epidemic.

Dongguan is a major manufacturing center for shoes, toys and textiles in China . As the epidemic in Dongguan continues, some factories have been closed . In addition, under the influence of the epidemic, many shipping companies such as Maersk, CMA CGM and ONE have also announced urgent adjustments to related businesses in China.

Epidemics occurred in many places, and Lens Technology, a big seller in Dongguan, issued an announcement to fight against it

In recent days, new cases have emerged in many domestic cities including Jilin, Shanghai, Shenzhen, Kunming, and Hangzhou. The resurgence of the epidemic will undoubtedly bring "inconvenience" to relevant personnel engaged in cross-border exports .

As the entire city of Shenzhen pressed the "pause button" and everyone was working from home, Dongguan's big seller Lens Technology also issued an announcement to adjust its business strategy.

The announcement shows that Lens Technology's wholly-owned subsidiary Lens Technology (Dongguan) Co., Ltd. (hereinafter referred to as "Dongguan Lens") has carried out epidemic prevention and control in accordance with relevant policy requirements, arranged centralized isolation and nucleic acid testing for all employees, and has suspended production activities . It is fully cooperating with the government's epidemic prevention work to curb the spread and spread of the epidemic .

According to the editor, Lens Technology was founded in 2006 and is mainly engaged in the research and development, production and sales of optical lenses, glass products, metal accessories, TFT-LCD, PDP, OLED-FED flat panel displays, 3D display screens and display screen materials, touch switch panels and modules, etc. Its operating income in the first three quarters of 2021 accounted for 6.76% of the company's total operating income.

Lens Technology mentioned in the announcement that due to the continued development of the epidemic at home and abroad, some of the raw materials, auxiliary materials, chips and other materials purchased from abroad by the company encountered certain difficulties in the cross-border logistics link, which had a certain impact on the company's main business. At the same time, the epidemic in Vietnam also had a certain impact on the cross-border logistics link of the company's product delivery.

Lens Technology said that the difficulties encountered by the company in cross-border logistics have had a comprehensive adverse impact on product delivery, logistics costs, procurement costs, labor costs, epidemic prevention expenditures and related cost control. The company has taken measures to coordinate resources to ensure that production and operation-related procurement and delivery are met in a timely manner as much as possible.

In order to minimize negative impacts and control risks, Lens Technology, while strictly complying with epidemic prevention and control requirements, has made preparations for resumption of work and production in advance, strengthened communication with the government, actively coordinated cross-border logistics resources, and activated alternative transportation capacity and solutions to reduce the impact of logistics obstructions. At the same time, the company's various parks have also appropriately stockpiled epidemic prevention materials and production materials in advance.

Lens Technology stated in the announcement that the epidemic will not have an adverse impact on the company's long-term development, but the impact on the company in the short term is difficult to estimate.

The 2021 financial report shows that during the reporting period, Lens Technology achieved total operating revenue of more than 45.285 billion yuan, a year-on-year increase of 22.6%. Operating profit was 2.16 billion yuan, a year-on-year decrease of 62.14%.

In Lens Technology 's 2021 financial report, the impact of the epidemic on its operations was also explained: "Rising labor costs, increased R&D projects, new park operations, supply chain fluctuations, the epidemic, power restrictions and other comprehensive factors have had a certain impact on the company's operating performance."

Many shipping companies urgently adjusted their business in China

Affected by the domestic epidemic, several shipping companies including Maersk, CMA CGM, ONE and others announced that they would urgently adjust their related businesses in China.

Maersk announced that the Shanghai counter window will be closed from March 16 to 18, and the processing of paper invoices will be delayed. In addition, Maersk also stated that the delivery time of air freight services in Hong Kong will be longer than usual, and air freight warehousing and pickup services in Shenzhen have been suspended.

ZIM also stated in the announcement that the window opening hours of the Shanghai company are from 14:00 to 16:00 every day . ONE Shanghai has implemented a work-from-home model and suspended offline counter business processing.

Recently, the spot freight rates on the Asia-Europe route have shown a trend of gradual decline, but will the recent suppressed freight demand have an impact on future ocean freight rates? It will take time to observe.

In addition to the impact on shipping companies' business, the domestic epidemic has also affected orders from some cross-border e-commerce platforms.

As the epidemic "rises", will Amazon and Walmart orders be delayed?

Recently, the epidemic has been on the rise across the country . Affected by the epidemic, Shenzhen has pressed the "pause button". As the home of more than half of China's online retail exporters, Shenzhen's "pause" has also had a certain impact on the business of global e-commerce platforms.

Data shows that in order to curb the spread of the epidemic, Shenzhen currently has about 17.5 million residents working from home , and all non-essential businesses and public transportation have been closed. Some factories in nearby Dongguan , China's major footwear, toy and textile manufacturing center, have also been closed due to the epidemic.

Ms Wang Xin, president of the Shenzhen Cross-border E-commerce Association , said the moves were causing major disruptions to the production and delivery of goods sold on major global cross-border e-commerce platforms , including those operated by Amazon.com Inc and U.S. retail giant Walmart.

Wang Xin said in an interview with Bloomberg on Monday that due to epidemic restrictions , most production in Shenzhen has been suspended, and product delivery is also chaotic because logistics companies and warehouses are closed or have reduced production capacity . According to notices issued by multiple freight forwarders, most warehouses in Shenzhen have suspended shipping and receiving operations .

Chinese sellers can be seen everywhere on global e-commerce platforms . It is reported that in 2021, China's cross-border e-commerce industry grew by 25% to 1.4 trillion yuan ; during 2020 , affected by the epidemic, China's cross-border e-commerce grew by 40%. Thanks to China's integrated supply chain, Chinese brands are going global more smoothly. Among them, fast fashion giants Shein and Anker Innovations, and other Chinese brands, are almost household names in the US market.

Amazon responded to the impact of the epidemic in China. Amazon said it is moving goods to warehouses in southern China that are not affected by the epidemic . Its spokeswoman Maria Boschetti said in an email : "We do not expect our business to be significantly affected . "

Walmart did not respond to the potential risk of delivery delays. Logistics company 4PX also said on its website on Monday that they had stopped picking up packages from Shenzhen due to the epidemic .

Although the epidemic has brought some adverse effects to export business, this is only temporary. The editor believes that with hard work, the epidemic will eventually be defeated.

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