Authorities continue to wrestle with the coronavirus outbreak which, along with a human toll of more than 73,000 people infected in China, is upending manufacturing, transportation and supply chains worldwide. Many companies in the promotional products industry are taking proactive steps to support their clients, vendors and Chinese partners.
“The situation is evolving in China and around the world,” says IMAGEN Brands President Paul Lage, MAS, in a company statement. “One of the questions is, how is this going to impact our business? We have been in contact with our vendors, and they realize there will be some issues. Many of the factories are still not open. We anticipate that many might resume their regular operations in early March. Others may not reopen until April. In the meantime, orders for their products are still coming in, and they are starting to accumulate some significant backlogs. Therefore, this potential disruption may last until early summer until we all get through this issue.”
The timing of the coronavirus outbreak has proven to further complicate business operations, coming as it did during the Chinese New Year, when millions of people were traveling to visit family members. Lage adds, “We are fortunate to have inflated our inventory prior to the Chinese New Year. We don’t see any issues in the short-term and will be monitoring the situation closely.” He says the company will post inventories and any updates about this situation on the website at IMAGENBrands.com.
IMAGEN Brands expects the major categories impacted by the outbreak to be drinkware, umbrellas, tech products and some bags. The company is looking into sourcing alternatives of these products outside of China.
In a statement issued today, supplier HPG says that it also previously increased inventory levels ahead of the Chinese New Year, and does not anticipate significant delays if the coronavirus outbreak improves in the next month. The company also assured distributors that it’s in daily contact with suppliers in China concerning the wellbeing of employees and staff, and factory reopenings. HPG further advised its clients that even though the coronavirus has significantly affected business, “Many migrant workers have not seen their children for an entire year. So, while the economic impact has been an obvious concern, the widespread quarantines are causing an emotional toll on many families.”
Industry companies report communicating closely with manufacturers in China to get a clearer picture of their status and capacities, and explore ways to ship products into the U.S. As PPB Newslink reported last week, goods imported into the country are considered a highly unlikely means of transmission of the coronavirus.
A key part of supplier Polyconcept North America’s sourcing strategy, Liz Haesler, global chief merchant, tells PPB Newslink, has been to develop more business outside mainland China to help mitigate the risk that comes from a heavy reliance on operations in any one country. Even so, it’s keeping a close eye on the situation in China. She says, “We are fortunate to have a very capable team in China that helps PCNA with sourcing. Together, we have been in touch with our factories to understand their disposition; specifically where they are in the certification process, projected open dates and percentage of capacity. We have made deep investments in our key SKUs to ensure we are able to serve our customers through this situation, and are working with our ocean freight partner to determine the best methods of entry into the U.S. Our No. 1 goal is to make sure there is minimal disruption to our customers.”
Harvey Mackler, MAS, president of GEMPIRE/Floral Promotions, reports that one of the emblematic vendors his company works with has received permission to reopen and others anticipate approval later this week, but getting a full complement of workers may take longer due to quarantines and transportation issues. He says, “We are directing rush orders to this one vendor, but we need to be cognizant of their current capacity. They are still faster, better quality and less expensive than our domestic counterparts, but they are only at 25- to 35-percent capacity as many workers cannot get back to the factory due to local quarantines. We were offering domestic next-day production and due to the overwhelming demand placed on our domestic capacity, our current standard printed pin production is three to four weeks.”
HPG says that its brands will air-freight products to meet demand at no extra cost to distributors, and that its customer service teams are constantly updating inventory to ensure accurate expectations. New product launch dates have also been postponed until HPG can be certain of availability. In its statement on the situation, it says, “Ultimately, our approach may impact our finances—but we believe moments like this call for compassion above all else. All over the world families have been separated, lives have been lost and the future for many is uncertain. With this reinforced perspective, we are especially grateful to be in a more fortunate position on this side of the world—and are committed to doing everything in our power to ease the burdens of our friends, families and partners on the other side of the world. We look forward to brighter days ahead.”
Read more on this ongoing situation and access additional resources at https://www.ppai.org/coronavirus-information.
