Machinery

News last update:24 Mar 2020

XAG resumes drone production as China recovers from Corona outbreak

Chinese drone manufacturer XAG has resumed drone production in order to fulfil the large purchasing orders of agricultural drones for the farming season.

As the spread of coronavirus (COVID-19) slows in China, the country has seen a resumption of work to reboot its economy. The Chinese agriculture technology company XAG is one of the first companies obtaining work resumption approval from government.

20-million-yuan relief fund for XAG supply chain partners

XAG has restarted business in its Guangzhou headquarters, with an overall 90% work resumption rate of its R&D staff on the first day. To fulfil the large purchasing orders of agricultural drones for the farming season, XAG has also set up a 20-million-yuan relief fund for its supply chain partners who struggle to reopen their factories. Qualified suppliers could apply for this relief fund, as prepayment from XAG.

Also, professional disinfection services using drone and robots would be provided for free to any supplier in need.

According to XAG, many manufacturers are still struggling to reopen their factories due to poor cashflow or labour shortages. “This has resulted in a disrupted supply-chain that might pose a challenge to the country’s agricultural production increasingly dependent on intelligent machines,” states the company.

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The XAG Dongguan Factory has resumed manufacturing with comprehensive work environment protection from COVID-19. - Photo: XAG
The XAG Dongguan Factory has resumed manufacturing with comprehensive work environment protection from COVID-19. - Photo: XAG

‘Supply chain of drone manufacturing a complex system’

“The supply chain of drone manufacturing is a complex system that involves a broad range of industries. XAG’s suppliers are mostly small-to-medium sized manufacturing enterprises. Many of their machine and equipment are financed through bank loans, and obviously it is much more difficult to apply for another loan at this stage. Without enough cashflow, they would not be able to restart operations, let alone returning to full output capacity,” said Tang Xiaomin, Vice President of XAG, in an interview with 21st Century Business Herald.

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