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Coronavirus already affects production of electronics in Brazil

by Ace Damon
Coronavirus already affects production of electronics in Brazil

The coronavirus outbreak that mainly affects China is already impacting the economy of several countries. Nor does Brazil escape: many electronics companies that import Chinese components and inputs to manufacture their products here are not receiving orders on time. The problem mainly affects the IT industry.

According to official figures, the coronavirus has already caused more than 1,100 deaths and infected about 45,000 people in China. As part of efforts to curb the outbreak, Chinese companies have reduced working hours or interrupted their activities.

This is the case for many factories. Foxconn, for example, delayed the return of its employees to its main plant in China after the Lunar New Year holiday precisely as a preventive measure against coronavirus.

These are necessary decisions, but they have their consequences there. Non-compliance with contracts is one of them. In Brazil, one survey by the Brazilian Association of the Electrical and Electronic Industry (Abinee) made with more than 50 industries in the electronics sector indicates that 52% of them already face shortages caused by the shutdown of component factories in China.

Part of the companies that claim to have no problems fear that they will join the list of those facing shortages if the delivery of Chinese components and inputs does not return to normal by the end of the month.

To make matters worse, 22% of the companies surveyed signal that they may have to shut down their production lines in the coming weeks if the problem is not resolved.

In addition to components for computers, cell phones and the like, Brazil exports parts for refrigerators, washing machines, TVs, sound equipment, among many other products.

There is another aggravating factor for Brazil: China is a major buyer of Brazilian commodities, but it is feared that the coronavirus outbreak will cause the country's GDP to decline, at least in the first quarter of 2020. Well, a possible effect of this scenario is the decrease in Brazilian exports to China.

With information: BBC.

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