The sudden outbreak of COVID-19 has frozen the global economy and disrupted global supply chains in the first half of 2020.

What difficulties have the foreign-funded industrial firms in Guangdong faced during the pandemic? How is the current situation of their supply chain? Does foreign investment remain optimistic about the Chinese market?

[PhotoKeane from Newsgd.com]

Thomas Schmitz, President of ANDRITZ (China) Ltd., which a member of the European Chamber of Commerce, shared his views on these questions in an exclusive interview with Newsgd.com.

Headquartered in Austria, ANDRITZ is an international technology group active in the pulp and paper, hydro, metal and solid/liquid separation sectors. Foshan locates the group’s biggest and most complex workshop worldwide which are producing equipment, plants and components for all the four business sectors.

Q: How ANDRITZ China is affected by the COVID-19? How’s the current situation?

A: ANDRITZ China is mainly producing for the Chinese market because China is the by far the biggest market for many of our businesses.

Our workshops were affected mainly in February. A lot of people were quite scared going back to work, which is quite normal. People didn't know what the virus means in the beginning. Therefore, we try to make everything safe while communicating a lot with the employees to make them feel safe to come back to work. And this kind of communication worked out quite well. We were one of the first Foshan companies that returned to work on February 10th. We started with 60 to 70 percent of our capacity and reached 100 percent by the end of February. By the end of March, we had already compensated all the volume which we had lost in February.

What we can see is that different markets are differently affected by the virus. The pulp and paper market is at the moment booming driven by the demand for tissue and so on,but for the metal market, we have less business as the car industry is seriously affected.

The only problem we are facing is our international experts cannot enter China. And we have a lot of big projects which are in some way paralyzed because we cannot commission them. And we are trying now to do a lot remotely. And I hope that we can soon overcome this situation.

Q: What strategies did you take to restart the business?

A: As we have a lot of supply obligations, our main strategy was to get back fast on track and to make up for the time we have lost by doing more shifts. It was a little critical because a lot of our people were outside Guangdong at that time. And some were still in Hubei.

So the first strategy was to get people back quickly and then to have all the safety and security measures in place to avoid infection. In a way, we were lucky. Till today, not a single of our employees have been infected, not even those who were in Hubei during the epidemic.

On the other hand, I have to say that the Foshan government has helped us a lot to open right away in time. They helped us proactively by doing the inspections, giving us the facilities for disinfection and all necessary support.

I think Guangdong has managed the overall situation and helped enterprises reopen and start businesses more proactively. For example, I commute from Guangzhou to Foshan every day. They have in coming controls in both cities but the process is very efficient. So I think the Guangdong government has lived up to its reputation of supporting businesses.

[PhotoKeane from Newsgd.com]

Q: How the COVID-19 affected your supply chain?

A: At the beginning, we had some difficulties because some of our sub-suppliers were affected,but now the situation is quite normal as before for the majority of suppliers, specifically in our industry. It takes longer time for smaller enterprises but everything is more or less back on track.

So under the context of globalization, I think the real strength of China is not the cheap costs but its supply chain which is very efficient and also qualitative on a high level. This is very important for our industry. And there is not so much dependency on the outside world.

Q: There is a sound that persuades foreign enterprises to evacuate from China. What do you think?

A: When you look from a global level in our industry, China is always the market number one or number two. So for us there is no question to give up China to do that somewhere else. We will always stay here in China. At the moment we are active and in discussion with the Foshan government to set up a new workshop to expand. We want to further invest here in China because we see the need of the industry here in China. And we see also good possibilities for that.

Q: What keep you in Foshan?

A: When you make a decision on where you locate yourself, it's always many different factors. We are not only producing, we also have engineering project management. So the availability of local talents is very important. And in this respect, Foshan is a good middle ground. It is by far not as expensive as Shanghai or Beijing. It's not the cheapest place but it's with good availability of local talents.

And I do believe this area will be the biggest economic zone in the world with the plan of Guangdong-Hong Kong- Macao Greater Bay Area. The area will be more connected and more convenient for business. So on the one hand, it will be even much more attractive for people to work here. On the other hand, our aim is to grow in capability instead of cheaper manufacturing. We want to have more PhDs and brainpower. In this way, I think the Greater Bay Area sets the right frame condition.

Q: Are you confident in China to revitalize the economy?

A: At the beginning of the outbreak, the first discussion I had with our CEO was: is our supply chain safe? Can you still supply to south America to other big projects which we have? And I said you will see we will make this happen. So in this way, I do believe that the situation is actually supporting China's role globally in what China can do.

On the other hand, China is on the way to become the number one economy in the world. And this will not stop because of the pandemic. That is so to say, the huge population, the set up and the infrastructure will help China recover fast and to become stronger.

In addition, we are also a member of the European Chamber of Commerce. The expectation of the Chamber is when China faces crisis, it opens up more, which means we will see more cooperation and more possibilities for European companies here. We believe this will help both the European companies in China and China itself.

Reported by Jasmine

Edited by Keane