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A Voith Turbo worker works on the Shanghai assembly line on July 21, 2022
As corporations gradually move away from the latest wave of Covid-19 in Shanghai, the city’s foreign-invested business enterprises are confident about the Chinese market, as they look for approaches to adapt their operations to the tough times.
The Sika Shanghai Sarnafil plant in Minhang district, the aegis of Swiss chemical company Sika Group, took over all production lines after being suspended from March 28 to April 26, 2022.
Zhang Yejiong, chairman of Sika China, said production capacity since June has recovered above its March level, with an increase of 10.
This includes export orders delivered to Australia, Japan and New Zealand. Orders to Southeast Asian countries are being processed, the company said.
“We have not lowered our initial expansion target this year and expect double-digit earnings expansion,” Zhang said.
During the closed-loop check before June, xinzhuang Industrial Park, in which the plant is located, provided commands for epidemics and disinfection, and shared resources for the daily needs of staff living on site.
The corporate has benefited from preferential monetary policies, adding tax exemptions and discounts and postponement of social security receipts and operating expenses such as electricity.
“This has increased our confidence in the recovery of the business,” Zhang said. “Although expansion has slowed this year due to the previous scenario of temporary closure of two factories in the city, we remain positive about the business outlook nationwide. “
The green energy box is an example of China’s purpose to achieve maximum carbon emissions by 2030 and reach carbon neutrality by 2060, he said.
In recent years, the company has developed a box location plan, which covers technological and production capacity, and achievements have been made so far.
The total annual average of domestic orders for wind power generation molds at the Sika plant in the Waigaoqiao free trade zone of Pudong New Area over the past 3 years is more than a hundred times higher than a decade ago.
“In addition, the infrastructure box to which the company committed has been promising because of the structure of megacities,” Zhang said.
“We will reinforce the exploration of new markets, the release of complexes and the application of technologies. Collaboration with national corporations will also be strengthened.
The main hurdle facing the company is ensuring an elegant supply chain for imported fabrics and export orders, he said.
Similar work is also underway at German car portion maker Voith Turbo to mitigate the effects of the pandemic and increase resilience.
Martin Wawra, managing director of Voith Turbo’s mobility division, said functionality had returned to pre-outbreak levels, with sales falling 60% year-on-year in the current quarter. The Chinese market accounted for a quarter of the company’s £4. 3 billion (£3. 6 billion) of global sales last year.
Lower consumer demand is the main cause of the situation, after truck orders, one of the company’s main pillars, have declined due to limitations due to COVID-19 prevention measures globally since last year.
“The recovery will take time over the next six months, and now we will take action for expenses and analyze the products that will be offered for other market segments,” Wawra said.
The company will lead the manufacture of hydrogen parts for cars and ships for the low-carbon market.
Shi Hong, director of the commercial branch of Xinzhuang Industrial Park, said more than 470 companies with a turnover of at least 20 million yuan (£2. 45 million) in the domain had fully resumed operations in June, of which foreign-invested enterprises accounted for 76 percent. By the end of June, 11 new foreign-invested corporations had established themselves in the park, with a foreign investment of $44 million (£36. 5 million).
A Voith Turbo worker works on the Shanghai assembly line on July 21, 2022
GAO ERQIANG / CHINA DAILY
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