Continued disruption at China’s ports due to the coronavirus is threatening the supply of some products used in the New Zealand building industry.
The fourth case of coronavirus was confirmed in New Zealand on Friday, and over 95,000 people have been infected around the world.
The effects on New Zealand’s economy of the coronavirus – which has resulted in major manufacturing shut-downs in China – were likely to last longer than previously expected, Finance Minister Grant Robertson warned on Wednesday.
Electrical wholesaler Advance Electrical found suppliers were becoming “quite protective” of some quite low cost items such as light switches and junction boxes.
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Suppliers were not selling the affected products in bulk, only selling only smaller amounts at a time, said Rangi Nukunuku, bulk purchaser for the company.
MARTIN MEISSNER/AP
Getting the products from China is causing headaches for some New Zealand businesses.
Electric cabling was not hard to source as most of it was made in New Zealand and Australia, not China.
“We haven’t really been badly affected … our suppliers are starting to raise the alarm a little bit, but then again I’ve spoken to a couple of suppliers that are quite optimistic that supply will start very soon, supply by air freighting rather than sea freight.”
Freighting goods by air rather than sea was likely to add some cost, although it would be a couple of weeks before any extra cost was applied, he said.
Fletcher Building’s distribution businesses, PlaceMakers and Mico, expected some disruption to shipping from China as the backlog of exports cleared.
“We are not currently seeing any material impacts on our supply chain at a group level, but we are continuing to monitor the situation closely and are mindful that this is a rapidly evolving situation,” said a spokesman.
“At this stage we are comfortable that while there might be the odd product line that is impacted we will have substitutes available so that this should not cause our customers any issues.
“The majority of our key building materials suppliers to these businesses manufacture in New Zealand and are therefore unaffected.”
Industrial product supplier RS Online was not experiencing any shortages aside from personal protection equipment, such as reusable respirators, sanitisers and safety goggles, which was in short supply around the world.
Since New Zealand’s first case of Covid-19 was confirmed on Friday night, people have been stocking up on face masks, toilet paper, food and hand sanitiser.
There was no real fear yet that “everything’s going to fall on its face”, according to a source in the plumbing industry.
“We’re not noticing any drop in retail spend and we’re not seeing any drop at all in plumber spend,” he said.
Suppliers are becoming “quite protective” of some electrical items.
The main problem was getting the products from China.
“[There are] not enough boats going to mainland China to pick up product – factories up there are actually producing, from what we’re told, it’s just there’s a limit to how many boats are getting to port to load up, that’s what the delay is at the moment.
“Thankfully enough we’ve heavily advanced ordered and luckily enough have pretty good stocks available – key suppliers are not reporting any potential problems for four to six months minimum.
“The plumbing industry’s quite well insulated because a lot of our product is small fittings and are ordered in such large quantities that you’re talking about having 100,000 to 200,000 fittings sitting on the shelf for most of our suppliers.”
Joris Croese/123RF
Smaller plumbing items were in good supply, but the pressure may go on larger items such as baths.
At the high tech end of town, Rakon was experiencing some disruption to its supplies from China. Rakon, which manufactures high tech communications products, said its operations in New Zealand and India had seen some reduced or delayed deliveries of manufacturing materials from suppliers in China.
“Rakon is also monitoring its customers’ behaviour, including ordering, consumption of inventory and delivery logistics,” the company said in an update to the NZX on Thursday.
“At this stage we do not have certainty of suppliers’ and buyers’ situations to determine the full impact on Rakon.”
Mitre 10 “has identified a small number of products where we anticipate there may be delays,” said merchandise general manager Chris Fisher.
“We have resilience and contingency plans in place, to manage the majority of our potential supply chain disruptions, should they occur.
“Like other major retailers, managing supply in light of Covid-19 is an ongoing issue. We continue to work closely with our local and international suppliers to minimise any disruption and continue delivering for our customers.”
