(Updated March 3, 2020)
We continue to closely monitor developments with respect to the Coronavirus (COVID-19). We have been taking steps to ensure the safety and wellness of our employees including travel restrictions (both internationally and domestically), reviewing business continuity plans, prudently evaluating the need and attendance at group gatherings and working to implement visitor guidelines for those coming to our locations around the globe.
We have also established a team that is working to determine the appropriate measures which should be taken during this event. This team will help guide our actions in responding to a potential global outbreak including measures to reduce spread of the illness and maintaining business continuity including IT, procurement, manufacturing and supply chain functions.
Supply Chain and Customer Impacts:
As you are aware, the entire global supply chain has been impacted due to the coronavirus outbreak, which has led to large-scale disruption in marine container shipping services. Eastman expects that the impact to shipping will result in a reduction of delivery reliability, route frequency and availability in the short to mid-term.
While it is more difficult to confirm available logistics and delivery dates at this time, we believe our global manufacturing and logistics capabilities will keep us well positioned to work through these challenges and, if necessary, to help customers put the appropriate mitigation plans in place. We are working to secure future vessel space allocations and using track and trace of shipments in transit to provide customers with updated estimated arrival times.
We are working closely with our customers to determine any potential impacts or delays. We are also verifying our suppliers' ability to supply raw materials to our sites around the world to continue running our manufacturing sites.
We realize this situation remains very dynamic. We will continue to provide updates as we learn more. We are confident in our preparation and contingency planning for situations such as this. It's also important to remember that Eastman has a global manufacturing footprint to continue production of its products at alternate locations if need be.
We remain committed to providing the superior service and support that our customers have come to expect of our company throughout this situation.
Questions and Answers:
- Which Eastman manufacturing sites are impacted at this time?
Eastman does have manufacturing sites in locations in China that were under extended holiday or restricted work return dates. Those sites have restarted with exception of our Wuhan plant. It's important to remember that Eastman has manufacturing sites around the globe to help continue production of our materials in an event such as this. Materials produced in Wuhan are being supplied from an alternate manufacturing location at this time.
- What products are at risk?
A. All of our manufacturing plants and facilities in Asia Pacific outside of China have remained fully operational hence very limited risk from these locations at this time. The issue we continue to face is the slowdown for logistics as a result of slowdown at shipping ports and the shortage of trucking we're seeing country to country. We are working to secure future vessel space allocations and using track and trace of all shipments in transit to provide customers with updated estimated arrival times.
- Do you have any impact from your suppliers to produce materials?
Our procurement team has been actively engaged with our key raw material suppliers to understand any impact. Inventories were built up prior to the Lunar New Year and at this stage we do not foresee any shortage on key feedstocks to continue production for our customers. We continue to work closely to ensure our suppliers can meet our needs to keep our manufacturing processes running.
What issues are you seeing with shipments around the world at this time?
Like many other companies exporting globally, we are facing logistics and shipping challenges as ports and trucking resources have been constrained. While it is more difficult to confirm available logistics and delivery dates at this time, we believe our global manufacturing and logistics capabilities will keep us well positioned to work through these challenges and, if necessary, to help you put the appropriate mitigation plans in place. We realize this situation remains very dynamic, as information continues to change day-to-day, and we will continue to provide you with updates as we learn more and confirm logistics and delivery dates.
- Are Eastman shipments from areas impacted by COVID-19 safe to receive at our facilities? Have they been fumigated, or other protective measures been implemented to contain the spread of the virus?
No guidance has been given by the World Health Organization that fumigation or any other pro-active measures need to be taken in the handling and shipment of materials at this time.
- What impacts do you expect as a result of the rapid spread of the virus now being seen in Italy and other areas of the world?
We do not see any impact to our business or shipments at this time. We will continue to monitor the situation daily and will stay closely aligned with our customers in these areas.
- When can customers expect to know more about any potential impacts?
Our commercial teams are very engaged with customers and are working to identify any potential impacts as we work through this together. our sales teams are working with customers daily to assess the situation and potential slowdown in shipping and delivery.
- What restrictions has Eastman implemented to keep its employees safe and healthy?
Eastman continues to diligently monitor the evolving situation daily and is taking steps to ensure the safety and wellness of our employees. This includes extending travel restrictions (both internationally and domestically), reviewing business continuity plans, prudently evaluating the need and attendance at group gatherings and working to implement visitor guidelines for those coming to our locations around the globe.
- Does Eastman have a Pandemic Preparedness Plan if the situation continues to rapidly escalate around the globe?
At Eastman, we have a Corporate Pandemic Preparedness Plan, which helps guide our actions in responding to such outbreaks. The plan includes measures to maintain business continuity including IT, financial, manufacturing and supply chain functions. We have also established a team that is working to determine the appropriate measures which should be taken during this event. This team will help guide our actions in responding to a potential global outbreak.
- What is your plan if several of your employees at a manufacturing site or business location are ill and cannot work?
Our colleagues in Asia and EMEA have done an incredible job over the past several weeks as they have been working through this issue. As we continue to see the virus impacts expand around the globe, we have established a global steering team to manage our response efforts. We have also formed a cross-functional and cross-regional team that is working to determine the appropriate actions that should be taken during this event. This team will help guide our response including measures to minimize the risk of the spread of the illness. Our Operations Council is evaluating scenarios and taking prudent measures to maintain business continuity.