News of Monday’s massive earthquake that struck central China continues to filter in through various media and Internet-related news sources.  The 7.8 magnitude earthquake is considered a catastrophic event, and already initial reports indicate in excess of 9000 dead, and thousands injured. Surely more tragic numbers will follow.

The quake was located about 60 miles northwest of the city of Chengdu, in Sichuan province and an AP story indicates that 80 percent of the buildings had collapsed in Beichuan county. The city of Chengdu alone has a population of 10 million, larger that that of New York City. In 1976, China’s most deadliest earthquake in modern history killed 240,000 people.

In addition to the tragic loss of life and human injury, the overall disruption and impacts to industry supply chains will most likely present itself over the coming days and weeks.  There are already reports of a chemical plant collapse in Shifang city, sending more than 80 tons of toxic liquid ammonia leaking from that site. Power, water, telecommunications and other utilities within the quake area have all been temporarily disrupted.

Sichuan province and the area of Chengdu provide an important industrial base for China. While the area accounts for only 3.9 percent of the country’s overall GDP, it is a growing area, with aerospace, aluminum, chemicals, cutting tools, fertilizer, machinery and metallurgy presence. This area also provides a growing high technology manufacturing and semiconductor packaging area, offering high tech manufacturers a lower-cost alternative to the Shanghai coastal region. Intel has constructed a large semiconductor packaging facility, and Motorola is in this area as well.

In transportation, Chengdu serves a major rail hub with links to 12 major cities including Beijing and Shanghai. According to a report by the Xinhua news agency, China’s Ministry of Railways reported that 31 passenger trains and 149 cargo trains had been stopped because railway bridges or rail beds had been damaged or destroyed.

Stories of natural disaster for the Southeast Asia region continue at an unprecedented rate.  There were major snowstorms in China in January and February, the tragic cyclone that struck the country of Myanmar with 32,000 deaths reported thus far, and now this earthquake in China.  The overall impact to China’s and certain industry supply chains from this latest tragedy bears close scrutiny as to any effects on today’s just-in-time and lean focused supply chains.

Bob Ferrari