Chinese Tobacco Begin Resuming Production

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By TobaccoChina Online

The Covid-19 outbreak at the end of 2019, first reported in Wuhan and then spreading to the entire country, caused great damage to life and property. Since the outbreak of the epidemic, all units of China Tobacco regard its prevention and control as the most important work at present.

On February 7, the State Tobacco Monopoly Administration (STMA) held a conference call to coordinate the arrangement and deployment of the epidemic prevention and control measures and begin the resumption of work. Since February 10, a lot of preparatory work has been done and many effective scientific measures have been taken to resume operations and production for the industry.

China Tobacco (Hubei) Commercial carries out market survey

Even before the Spring Festival, China Tobacco (Hubei) Commercial Co., Ltd. organized 88 customer managers from 17 county-level companies to carry out a market survey by means of networking and communications. They expected to find out the comprehensive operation status of 192,000 customers, commercial inventory, supply status of industrial enterprises, roadblocks and other situations, and to accurately assess the effect of the epidemic on production and operations.

Meanwhile, the commercial company also arranges for all the staff and retailers to learn tobacco industry’s online “internet+” strategy and the new retail and epidemic prevention and control measures.

As of March 1, a total of 10 units in the province obtained the local government’s approval and agreed to carry out emergency security replenishment for supermarkets designated by the local government. Some 8 units delivered 4,554 cases of cigarettes to 1,686 supermarkets through the emergency replenishment support channels, effectively alleviating the demand of consumers for cigarettes during the period of strict control of the epidemic.

China Tobacco (Hubei) Industrial distributes cigarettes

As of March 10, all production units in the province other than those in Wuhan met the conditions for a resumption of production. Four cigarette factories obtained the resumption certificate approved by the local government. Due to the supply organization failing to support the market allocation demand in the near future, China Tobacco (Hubei) Industrial established a rapid response mechanism of production, supply, marketing, and transportation.

As of March 11, some 3,160 cases of cigarettes were allocated to 15 cities of 7 provinces including Sichuan, Jiangsu, Guangdong, Inner Mongolia, and Qinghai. All other provinces and cities in China pay special attention to the resumption of production.

China Tobacco Guizhou fully utilizes its online platform

Thanks to the continuous strengthening of information dissemination in recent years, retail customers in Guizhou province have access to a variety of services, such as online ordering, sourcing information, learning marketing knowledge, getting marketing information, etc. Although face-to-face communication with customers is not possible, the employees of Guizhou tobacco business system keep in contact with retail customers. They solve problems for customers anytime and anywhere through WeChat, QQ, or on the phone as well as by other means. In order to ensure the logistics, the company requires the cigarette logistics center of each unit to strictly manage the vehicles coming in and going out in order to prevent the spread of the virus.

China Tobacco Sichuan resumes r&d center construction

Located in Longquanyi district, Chengdu, with a construction area just over 24,000 sq km, the technology r&d center of the company should effectively improve the current crowded r&d environment and complete the experiments, which is of great significance to comprehensively build technology support system and continuously improve the product quality.

As ordered by the supervision unit and the general contractor, in order to resume the construction of the center, China Tobacco (Sichuan) Industrial purchased disinfectant water, infrared thermometers, personal protective equipment, and other prevention and control materials according to the relevant requirements, and set up a prevention and control room on the construction site, as well as an isolation dormitory and other special places for epidemic control, so as to ensure the resumption of construction without any further losses. In addition to the construction projects underway, the industrial plants are getting back on track.

Implementation of seedling plan in Yunnan tobacco-growing areas

Boasting the largest tobacco-growing area, the highest quality tobacco leaves, and the most tobacco farmers in China, Yunnan province allocated almost 16 million bundles of tobacco leaf plan as of February 17, accounting for 99.62% of the planned area. By the end of February, the plan was fully implemented for the farmers.

Most of the tobacco-planting areas in the province began to cultivate seedlings in the middle of February and started spring ploughing in time. It is expected that seedling sowing can be basically completed in the first 10 days of March, with all kinds of tobacco materials in place. Fully 100% of the flue-cured tobacco production seeds are already in place, and 77% of the substrate and other seedling materials as well. The whole province cultivated 1.86 million mu of land and collected 1.92 million tons of farmyard manure.

Solving the issue of retail capital turnover

This epidemic significantly affected the operation of cigarette retailers, many of whom now have capital turnover difficulties. The tobacco industry tries to help them overcome these hurdles. It is reported that over 70% of retailers in Abazhou, Sichuan are under pressure of closure. The local tobacco company actively strives for policy support and in-depth study of social assistance measures. The rent-free program will benefit 70 individual tenants, and rent will be reduced by about 230,000 yuan (US$32,300). Meizhou branch of China Tobacco (Guangdong) Commercial Co. Ltd worked with Agricultural Bank of Meizhou to launch its e-loan business for 16,354 cigarette retailers in the city. Up to now, it handled 892 loans for them through their “e-Loan of cigarette merchants” program, which corresponds to 5.5% of total customers, and the loan amount of 57.16 million yuan (US$8 million).

Final thoughts

The novel coronavirus comes as a big test for the management ability of enterprises. Given the current situation and market changes, how to make an overall plan for epidemic prevention and control, production, and management, how to respond to the changes in the market and consumption structure, and how to plan for the high-quality development of enterprises in the long run, is something Chinese tobacco has begun to actively explore and practice, which also provides reference for other industries and enterprises.