HIGHLIGHTS:
- LIFE HERE IN CHINA IS VIRTUALLY BACK TO NORMAL – PANDEMIC LIVING SEEMS TO BE A THING OF THE PAST.
- OUR THOUGHTS ARE WITH ALL OF YOU IN OTHER PARTS OF THE WORLD WITH THE RISE OF THE CORONA VIRUS IN SO MANY LOCATIONS. HAVING SPENT THE LAST FEW MONTHS UNDER SEVERE PANDEMIC CONDITIONS WE UNDERSTAND FULLY WHAT YOU ARE EXPERIENCING.
- EXACT MEDICAL PRODUCTION IS RUNNING VERY STRONG AND WELL. WE ARE AT 113% OF CAPACITY AND REDUCING BACK LOG OF LATE ORDERS EVERY DAY.
- SUPPLIES OF NEEDED RAW MATERIALS WHILE NOT YET AMPLE ARE HOWEVER ADEQUATE TO MAINTAIN OUR PRODUCTION NEEDS.
In the two weeks since I last communicated, significant changes have occurred here in Changzhou, China. Many stores, restaurants and shopping malls have reopened and everyday life has finally returned to near normal. In the province of Jiangsu and also in our city there has not been a single new case of the virus now in over three weeks. Low levels of new infections are still occurring in China but primarily in Wuhan (which is still under many restrictions) and occasionally in other areas of the country. We are pleased and fortunate to not be experiencing such. There was significant concern that once the travel bans were lifted that infections would be on the rise again but that has not been the case. For all intents and purposes, we consider the crisis in China to have come to an end.
As the scourge of this disease is now on the rise in many parts of the world, we are with you in spirit. I think no one can empathize more than those of us here in China that have lived already what you are just starting to experience. My only advise to you is to follow the guidance and rules of your professionals. Physical distance separation and an overabundance of hand washing and hygiene are critical. If you are sick stay home. If you are well stay home as much as absolutely possible. If you are home don’t invite anyone to come and visit. China took severe and drastic steps to attack this situation but their methods have proven effective and others would do well to emulate them. This too will pass and the sun will rise again.
Exact Medical is pleased to report that our team members are responding beautifully to the challenges we have. Our people understand the faith and trust our customers have placed in them and are determined to satisfy their needs.
Today I can confirm the factory is operating at 113% of capacity and is running long hours of overtime and for some production groups not even one day of rest, working seven days per week. Our backlog of late orders is still with us but every day we are reducing those numbers. No one will rest until we have returned to normal on time production and shipping. We anticipate some production teams will achieve a normal situation in approximately three more weeks. We expect the entire factory and all production teams to be back to normal on time production within six to seven weeks. Our customers have honored us with your business and we ask that you continue to communicate priority items that needs can best be filled.
There have been some concerns about the availability of needed raw materials. The government here has placed a priority on the need for face masks and isolation gowns as well as full coverage protective clothing including jump suits and hoods and helmets. Poly Spun Bound and Melt Blown materials along with Poly Ethylene are core components to those priority products but are also main materials we use in the production of our products. While the availability of SMS fabric, Absorbent Pad and Reinforcement Components and PE materials are on an allocation basis, Exact Medical has supplier commitments to keep us in production.
Over the years Exact has built relationships with our suppliers which are now paying dividends. Many Chinese companies are transactional in nature buying raw materials from whom ever has the cheapest price on any given day. Such vendor hopping is something that Exact has never believed in as the quality and consistency of materials can not be assured in transactional business relationships. In addition, many Chinese companies are typically not consistent in paying their bills. It is common for suppliers to have to chase their customers for payments all the time.
Exact has spent a couple of decades developing strong supplier relationships with companies that respond to the need for consistent quality and we have never paid a bill late in our history. Those relationships are now paying us dividends as our suppliers are putting our needs at the top of their priorities. Many are producing materials for Exact in off hours after their China government production requirements are completed each day.
Because of the path and philosophy Exact Medical has followed for many years I can assure our customers there will be no interruptions due to lack of raw materials.
This unfortunate situation first China and now the World faces will continue to test each of us. We here in China have some months of living in a virus environment and I can assure those of you just now beginning that difficult experience that this too will come to an end.
Again, I want to thank all of our customers for the faith you have put in us.
WE WILL OVERCOME THIS CHALLENGE.
David Power
President
Exact Medical Products, Inc.
