Foreign companies halt operations near Tianjin blast
SHANGHAI – Foreign companies have suspended operations around the Tianjin port as officials scramble to contain the toxic fallout of last week’s deadly chemical explosions, which dealt a blow to northern China’s emerging economic hub.
Toyota said over half its China production capacity would be offline at least through Wednesday. The company has operations near the blast evacuation zone and said Monday it had suspended three production lines, which can produce 530,000 vehicles a year.
Thousands of Volkswagen, Toyota, Hyundai and Renault cars, mostly pricey imports, parked on lots near the blast were decimated.
The operations of Panasonic, logistics company Singamas Container Holdings and Deere & Co. have also been disrupted.
The list of name-brand companies impacted by the blast is a testament to Tianjin’s rise, but regulatory and safety lapses at the hazardous goods warehouses that exploded have drawn attention to the sometimes shaky infrastructure China has laid down as it pursues ultra-fast growth.
The port lies at the heart of one of China’s new free trade zones, designed to draw foreign investment and create an economic hub for China’s northeast that could one day rival the Pearl and Yangtze river deltas. The broader Binhai New Area has long been on the radar of Beijing’s technocrats, who hope to integrate Beijing, Tianjin and Hebei into a single, thrumming economic powerhouse.
“This wasn’t just an incident in some third-rate city. It was right at the heart of everything,” said Chet Scheltema, regional manager at international business consultancy Dezan Shira & Associates, who has lived and worked in Tianjin.
He said the explosions called attention to deficiencies in China’s soft infrastructure of safety standards and emergency preparedness, which are usually overshadowed by China’s shiny skyscrapers and impressive roads.
Airbus built its first assembly line outside of Europe in Tianjin, which turns out four A320 aircraft per month. Spokesman Jacques Rocca said its facilities were unaffected. “We are evaluating what could be the impact in the coming weeks, but it will depend on the capability of the port of Tianjin to recover its activity,” he said.
The Tianjin Maritime Bureau said Monday that 85 ships had been delayed or canceled, but that port traffic is now normal.
Some shipments to Tianjin have been diverted to other regional ports, raising transport costs but minimizing overall economic impact, said Roberto Giannetta, secretary general of the Hong Kong Liner Shipping Association. “Damage to containers and cargo has been extensive,” he said, adding that those losses, difficult to estimate at this early stage, would be borne by insurance companies.
Operations at the port are “slowly returning,” Giannetta said.
Panasonic, which has a product development center 3 miles from the blast site, kept its offices closed Monday out of safety concerns. A spokeswoman said executives were still evaluating whether to open today.
U.S. farm equipment maker Deere & Co. said it suspended production at its facilities about 4 miles from the explosion site. It planned to resume operations later this week after cleanup and inspections.
Automakers have been hit because Tianjin is one of China’s major ports for car imports. Volkswagen lost around 2,700 vehicles. Renault said 1,500 Koleos SUVs were damaged. Hyundai said it had around 4,000 vehicles, mostly high-end cars, parked at the site.