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Puerto Rico’s small manufacturers unprepared for large-scale earthquake

More than 85% of Puerto Rico’s small- and mid-sized manufacturing companies have structural problems and face risks in the face of a large-scale seismic event, according to a pair of studies released by the Puerto Rico Manufacturing Extension Inc. (PRiMEX).

The studies, which addressed economic and infrastructure issues separately, responded to the impact of the earthquakes that have rattled Puerto Rico since January 2020.

The study, which evaluated 221 buildings, was carried out over two years, covering the island’s southwestern area, which was the most affected. The companies are in the 33 municipalities included in the Federal Emergency Management Agency’s (FEMA) Major Disaster Declaration FEMA-DR-4473, for the seismic event, PRiMEX explained.

“One of the studies analyzes the potential seismic hazards in the building structures of small and medium-sized manufacturing companies, with evaluation tools developed by FEMA,” said Francisco García, director of the entity’s earthquake program.

“The tool provides a methodology to assess the seismic safety of existing undamaged buildings to indicate which ones should undergo further examination,” he said. “The findings reflect that many structures have a number of irregularities with respect to design/construction modification without considering applicable codes and seismic lateral loads.”

The findings address different types of construction, from informal in concrete and steel, to hillside structures that experienced possible landslide movement in an earthquake,” he said.

Regarding the economic aspect, the study examined the impact and strategies adopted by small and medium manufacturers located in the southwestern region during the earthquake and its aftershocks.

“About 75% were hit with a supply chain impact, distribution disruptions, 73% reported losses of more than $10,000,” said the study’s main researcher at firm AMS, Alizabeth Sánchez-López.

“Those are 119 of 163 small and medium manufacturers. Fifty-two percent, or 84 of 161 companies, reported partial or total closures. Eighty percent reported human impact, 157 of 197 small and medium manufacturers reported problems with employee absenteeism and retention,” she said.

More than half, or 51% — which is 100 of 196 — plan to change their business strategy, while 39%, or 77 of 197, plan to modify or create new products, the study show.

Only 50% of the companies, or 75 out of 197, plan to improve their purchasing or inventory control system, she said.

“The findings show that small and medium-sized businesses in the agriculture, food and beverage sectors are less prepared in terms of planning and insurance coverage,” Sánchez-López said.

“The other sector, represented by textiles and clothing, printing and related services, and metal products, appears to be better prepared. In terms of strategy, smaller companies are recognizing areas for improvement to overcome existing challenges, she said.

More than 70% of respondents reported an economic impact of more than $10,000 and disruptions to their supply chain management. More than 50% reported closures and 45% were affected by the 2020 earthquake and its aftershocks in Puerto Rico, the study concluded.

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This story was written by our staff based on a press release.

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