Primark owner Associated British Foods (ABF) notified Monday there was a risk of supply deficits on some lines later in the 2019-20 financial year if delays in manufacturing facility production in China are extended because of coronavirus.
ABF, which sources a wide collection of its products from China, stated it typically develops inventories in advance of Chinese New Year and, as a result, is well stocked with cover for several months and doesn’t expect any short-term influence.
“We’re evaluating mitigating strategies, including a boost in production from present suppliers in other areas,” it stated Monday.
The group further owns major sugar, grocery, ingredients, and agriculture arms.
Several of its food companies have operations in China. It said the China sugar campaign was completed in January before the coronavirus pandemic advanced significantly.
The group stated its AB Mauri, AB Agri, and Ovaltine factories are functioning; however, at diminished capacity because of labor and logistics constraints.
ABF estimated first-half sales and modified operating revenue ahead of the previous year. Its scope for the full-year is fixed.
Primark’s first-half sales had been estimated to be up 4.2% on a constant currency basis.