FEATURE: SASAC calls for restart of construction firms
SASAC held a video conference with representatives of such state-owned companies under the direct management of Beijing on February 15 to understand the situation and to issue detailed instructions.
As of February 15, 81.6% of the over 20,000 production-related subsidiaries under the 96 stated-own companies under the control of Beijing had resumed operations, commercial, financial and real estate subsidiaries being excluded, but the resumption of construction enterprises had been hindered by the shortage of workers and construction materials, as well as transportation constraints, according to the post.
“There is still some room to increase the resumption ratio (among the construction companies), and we still need to conquer all the hardships to resume operations at such companies as soon as possible,” Hao Peng, SASAC head was quoted saying.
China Metallurgical Corp (MCC), China’s largest construction and engineering company now under the China Minmetals, achieved far higher resumption rates among the state-owned enterprises under the central government, as by February 14, 98.8% of its 44 subsidiaries had resumed operations via the means of working remotely and working on shifts, according to a company post on February 16.
Mask, one of the challenges for the resumption
An official from a Beijing-headquartered state-owned construction company confirmed that most of the employees have resumed working on February 3, though the large majority have been working from home, admitting, though, that “it is easier for offices to start operating than construction sites, as basic medical supplies such as masks are in extreme tightness of supply, without which, restart of the works may post health risks”.
A recent survey conducted by Mysteel also indicated the slower resumption among the construction companies, as only 10% of 155 construction and engineering companies across China reported returning to work as of February 14, which was far lower than the 28% ratio in machinery manufacturing and 25% in automaking.
Mysteel’s survey showed that 38% of the 155 construction companies planned resumption in late February and 10% in early March, while the balance of 41% undecided.
Among the factors that have hindered the process are the strict application and review procure for resumption by the local government, as ticked by 71% of the companies that have remained suspended, and the lack of protective gears against the NCP, as suggested by 22.6% of them.
To facilitate the earlier resumption, some local governments have simplified the procedure, and Tianjin in North China and Jiangxi in Central China, for example, have swapped the review and approval to electronically submitting NCP preventive measures and related documents for record 24 hours in advance, according to market sources, though distributing masks to employees remains to be a must-have for resumption.
“It is extremely challenging to resume work, as protective gears are very scarce,” a project manager from a state-owned construction company in Southwest China’s Guangxi said, “and our construction site has very limited bandwidth or space to quarantine the workers individually,” he added.
Companies that are not labour-intensive, however, are not facing as much challenge, he observed, which many market sources agreed.
“A labour-intensive industry requires far more complicated preparation other than medical supplies, as you need to figure out how to run shuttle buses, canteens and dormitories to minimise mass infection if one confirmed case breaks out,” a Tianjin-based market source working for a machinery manufacturing company shared.
An official working for an auto manufacturing also pointed out that resumption should be coherent efforts from the whole value chain.
“Even if we can reopen our plant, we are very much at the end of the whole production process just to assemble all the spare parts and components into a car, but many of spare parts suppliers have not been able to resume the production either because of lack of human resources or being located in the areas that have been severely hit by the virus outbreak such as in Hubei,” he explained.
Written by Olivia Zhang, zhangwd@mysteel.com, and Hongmei Li, li.hongmei@mysteel.com
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