Suppliers react to Chinese earthquake

By Shane Starling

- Last updated on GMT

Western suppliers and manufacturers are contributing to earthquake
recovery in China while trying to cope with the effect the quake
has had on their operations.

China's worst earthquake in 50 years has had a devastating effect on the country with thousands of people losing their lives and large areas of the south western Sichuan region decimated. Italian botanicals specialist Indena, which sources raw materials such as ginseng and ginkgo biloba from China, said it was collaborating with its partners in the region and elsewhere and offering assistance where it could. On the ground "The first thing we did was make sure all our local partners were ok and it seems as if that is the case,"​ said Dr Francesco Gattesco, a botanist with Indena's medicinal plants purchasing department. "We have personnel there too but there is only so much we can do - it's a job for the Army at this stage." ​ He said it was difficult to get into the affected area and so information coming out was limited. "We wait to find out the full picture."​ Canadian supplier UniChem Enterprises, which imports ingredients from the Sichuan region, had donated $10,000 to recovery operations through the Red Cross. "Some of employees in our supplier's company had lost some of their relatives and friends,"​ senior manager Tony Hwang said. "Some of our suppliers also had significant damage in their production building. UniChem is contacting five manufactures in Sichuan who are UniChem suppliers, and our company is willing to send financial support directly as well."​ DSM, another supplier with a large presence in China, said its operations had been unaffected by the disaster. A Chinese pharma and nutraceutical supplier, the Tongjitang Chinese Medicines Company, said the water piping system at its Guiyang facility had been damaged, forcing it to cease production. "We are working diligently to make sure production will be resumed as soon as conditions allow,"​ said Xiaochun Wang, Tongjitang's chief executive officer and chairman of its board of directors, according to press reports. The European Federation of Associations of Health Product Manufacturers (EHPM) said it had not been contacted by members over the situation but was monitoring events. Lessons ​ Gattesco said the situation highlighted the importance of multiple sources in raw materials supply. Indena frequently sources from tropical climates where potentially devastating tropical storms are common, and had learnt the value in expanding its supply horizons. "We have a policy of working with at least two suppliers for every raw material we seek to acquire,"​ he said. "We will even try to avoid one region or even one season to guarantee supply if events like this occur." ​ He said Indena's business was not significantly affected by the quake that measured 7.9 on the Richter scale because the majority of ginseng and ginkgo biloba is sourced from far away in the east and north east of China. It did source other herbals in smaller volumes from areas closer to Sichuan and reported disruptions in the supply of these, mainly due to infrastructural damage and delay. "This has been such a large-scale tragedy that it is affecting everyone, even if farms and manufacturing plants remain operational,"​ he said. "Everything has slowed down from transport to communications, business trips have had to be cancelled, but we are dealing with it as best we can and trying to help in any way we can."

Related topics: Business, East Asia, Supply chain, China

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