Factories suffer huge losses from smog shutdown

Updated 2016-12-22 08:55:04 Global Times

Upgrades to meet environmental standards should be urgent task: expert

Some heavy-polluting small- and medium-sized enterprises (SMEs) in North China's Hebei Province have been shut down since November, which has caused big losses for companies. The policy is not a sustainable way of tackling hazardous smog, an expert noted.

Located in southern Baoding, Hebei Province, operations at Yixing Textile Co Ltd have been suspended for about 20 days, a sales manager surnamed Sun, told the Global Times on Wednesday.

"All our orders have been postponed, and we have to redo our production planning too," he said, noting that the shutdown has caused the company losses.

During peak season, the factory produces about 300,000 meters of fabric every month, the manager noted. "Now, our 200 workers are on a temporary vacation," he said.

The Global Times reached out to five other textile companies in the region, all of whom said their production has ceased since the end of November. Other industries such as cement and glass manufacturers in Hebei have also had to halt production.

However, companies that have upgraded their equipment and are more environmentally friendly have been able to continue operating.

Beijing issued a red alert for air pollution on December 15, amid forecasts for heavy smog from December 16-21, according to the Xinhua News Agency.

The Beijing Municipal Environmental Protection Bureau said on Wednesday night it would lift the red alert for heavy pollution on Thursday and expected an improvement in air quality from Thursday noon.

As of Tuesday, 24 cities had issued red alerts, and more than 50 had announced orange alerts.

Potential losses

To fight heavy smog, some provinces and cities have shut down heavy-polluting factories as well as construction sites.

For example, 267 factories in Chengdu, Southwest China's Sichuan Province have been shut down, while 171 others were told to limit production, according to the Chengdu Business Daily. In addition, local authorities have probed 1,212 companies and fined 12 for violating environmental protection rules.

In Langfang, Hebei, where steel production is the pillar industry, production at some factories has been halted for nearly a month, China Central Television reported on Wednesday. Steel producer Xingang estimated a daily loss of 3 million yuan (1, 574).

Moreover, 1,767 companies in East China's Shandong Province have stopped operations, while 1,399 others limited production, domestic news website news.cnr.cn reported on Tuesday.

"We've been asked to stop producing since November 15, and we expect to resume our business on March 15, 2017," noted a manager surnamed Wang from Hebei Xianweng Cement Co Ltd, which produces 1.2 million tons of cement annually, according to its website.

"There is still heavy smog despite our halted production, so who will pay for our losses?" he told the Global Times on Wednesday.

The temporary shutdown of heavy-polluting factories is one way that local governments combat toxic smog, which has become a burden for SMEs, Chen Naixing, a research fellow with the Institute of Industrial Economics of Chinese Academy of Social Sciences, told the Global Times on Wednesday.

"Many of our SMEs only care about making money, or in other words, focusing on short-term interest," he said, noting that ignoring environmental interests would cost them more in the future.

Investing in the environment

Upgrading technology to meet environmental standards should become an urgent task, not only for local governments, but also for enterprises, Chen said.

Factories that have already invested in upgrades are not being affected by the heavy smog. Yingxin Glass Group in Hebei is operating as usual, as it invested more than 400 million yuan in upgrading its draining systems since 2014, an employee surnamed Ren told the Global Times Wednesday. "Environment inspectors visit much more often now, even during the night," he said, noting that the tightened monitoring on sources of pollution had urged the factory to do more to meet standards.

Every time there is smog, inspectors probe factories and shut many of them down, which is not a sustainable way of resolving this environmental problem, Chen said. "Local governments, along with those factories, should channel more funds to carry out detailed plans of upgrading technologies in reducing pollutant residues, which has not attracted much attention from companies yet," he said.

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