Sichuan Ya’an earthquake and what it means for me

The epicentre of the earthquake is located in a rural area called Ya’an, which is about 140km southwest of Chengdu. Ya’an is around 200km south of Wenchuan, the epicentre of the earthquake in 2008. Considering the proximity of many of business plants are located in Sichuan, there is a definite negative impact on the operations.

AUPU 477 bought a plot of land in Chongzhou in late 2012 for developing into a production house. Chongzhou is actually even closer to the epicentre than Chengdu, so it might be affected by the earthquake worse than the provincial capital. Ju Teng 3336 has production bases in Neijiang, which is a bit farther away, but still fairly close at around 300km east of Ya’an. It is not just the proximity of the earthquake that matters. I think the more pressing issue is labour supply disruption.

While I don’t think any of the managers of the above mentioned businesses have any experiences dealing with earthquakes of this magnitude, since they weren’t even here in Sichuan back in 2008. Despite this, I think Ju Teng’s management, being Taiwanese, has extensive experience with general earthquakes since it happens every so often in Taiwan, but just not the scale in Sichuan currently.

Many workers’ families are actually from rural prefectures working around the capital where businesses thrive. Some disruption to labour force will be inevitable as people might be taking time off searching for loved ones back home. The general morale for work might be down, affecting productivity. Looking for workers was already hard enough before the earthquake, and now, it might be even worse, negating the slightly cheaper labour force in Sichuan province.

Suppliers are also another issue but considering the major impacts are in rural areas, so I don’t think impacts will be severe.

Screen Shot 2013-04-22 at 12.09.37 PM


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