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T. Neise et al.
last five years that inundated their plant and hampered their production. The share of
SMEs with such a frequency was slightly higher in Jakarta (53.3%) than in Semarang
(48.3%). Usual protection measures such as pumps or sandbags can barely block the
high water level inundating the SME’s premises. More severe were the indirect
consequences for the SMEs, meaning that they were exposed to inundated access
routes, disrupted delivery by suppliers, or power outages. Two-thirds of all enterprises stated that floods indirectly exposed them more than ten times within the last
five years. Although the SMEs established adaptation measures to protect their plant,
they must face the consequences of inadequate flood risk reduction measures in their
neighborhood. As Semarang faces more frequently tidal floods, 70% of the enterprises experienced indirect consequences caused by floods. In Jakarta, the share was
63.3%.
The direct and indirect exposure to floods caused a variety of business disruptions,
as revealed in our in-depth interviews. Usually, the inundation damages raw materials,
intermediate and final products, or even the machines. Due to the higher water level,
this happens more often at firms in Jakarta than in Semarang. About one-quarter
of the SMEs in Jakarta had to throw away and replace raw materials or products.
Likewise, one-quarter of the small-scale firms in Semarang experienced losses due
to damaged raw materials or products. For instance, wood panels of a furniture firm
were taken by a flash flood, and a high amount of the remaining wood panels got wet
and became unusable (SS-10). However, the SMEs face the highest financial losses
by halted production and the inability to sell their products. Typically, the demand
for, e.g., food products decreases during flood events. Market traders purchase fewer
products because local markets are also inundated, or their customers cannot reach
the markets due to floods (JS-7).
Generally, enterprises more commonly experienced indirect losses in both cities.
Power outages belong to the most occurring problem. Either the power suppliers shut
down the electricity network in order to prevent electrocution, or the power supply is
just collapsing during flooding. Therefore, the enterprises rely on generators, but they
can only bypass short power cuts. Enterprises with a high dependency on machinery
must reduce the production rate or suspend the production process temporarily. Especially medium-sized firms are affected by power outages in Jakarta and Semarang
alike (e.g., JM-3; SM-7; SM-10). Disrupted distribution channels affect primarily
medium-sized firms that distribute their products regionally or exports their products. Consequently, the firms had to postpone the distribution because access roads
are impassable. A fish processing firm mentioned in Jakarta (JM-5): “Everything
slows down, especially the transportation and distribution process.” The company
had to delay its export because the trucks cannot reach the harbor. Therefore, the firms
paid contract penalties for delayed shipping (JM-5). Other firms also stop the delivery
completely during floods because the trucks have difficulties to reach the customers
or transportation hubs. The production is halted, and products are stored to a higher
level of the plant to prevent damages or decreasing product quality due to the floodwater (e.g., JM-3). The enterprises stated that usually, the customers understand the
reasons for delayed shipping but enterprises, for instance, in the garment sector must
pay monetary penalties. Since the enterprises compete globally, the enterprises are
T. Neise et al.
last five years that inundated their plant and hampered their production. The share of
SMEs with such a frequency was slightly higher in Jakarta (53.3%) than in Semarang
(48.3%). Usual protection measures such as pumps or sandbags can barely block the
high water level inundating the SME’s premises. More severe were the indirect
consequences for the SMEs, meaning that they were exposed to inundated access
routes, disrupted delivery by suppliers, or power outages. Two-thirds of all enterprises stated that floods indirectly exposed them more than ten times within the last
five years. Although the SMEs established adaptation measures to protect their plant,
they must face the consequences of inadequate flood risk reduction measures in their
neighborhood. As Semarang faces more frequently tidal floods, 70% of the enterprises experienced indirect consequences caused by floods. In Jakarta, the share was
63.3%.
The direct and indirect exposure to floods caused a variety of business disruptions,
as revealed in our in-depth interviews. Usually, the inundation damages raw materials,
intermediate and final products, or even the machines. Due to the higher water level,
this happens more often at firms in Jakarta than in Semarang. About one-quarter
of the SMEs in Jakarta had to throw away and replace raw materials or products.
Likewise, one-quarter of the small-scale firms in Semarang experienced losses due
to damaged raw materials or products. For instance, wood panels of a furniture firm
were taken by a flash flood, and a high amount of the remaining wood panels got wet
and became unusable (SS-10). However, the SMEs face the highest financial losses
by halted production and the inability to sell their products. Typically, the demand
for, e.g., food products decreases during flood events. Market traders purchase fewer
products because local markets are also inundated, or their customers cannot reach
the markets due to floods (JS-7).
Generally, enterprises more commonly experienced indirect losses in both cities.
Power outages belong to the most occurring problem. Either the power suppliers shut
down the electricity network in order to prevent electrocution, or the power supply is
just collapsing during flooding. Therefore, the enterprises rely on generators, but they
can only bypass short power cuts. Enterprises with a high dependency on machinery
must reduce the production rate or suspend the production process temporarily. Especially medium-sized firms are affected by power outages in Jakarta and Semarang
alike (e.g., JM-3; SM-7; SM-10). Disrupted distribution channels affect primarily
medium-sized firms that distribute their products regionally or exports their products. Consequently, the firms had to postpone the distribution because access roads
are impassable. A fish processing firm mentioned in Jakarta (JM-5): “Everything
slows down, especially the transportation and distribution process.” The company
had to delay its export because the trucks cannot reach the harbor. Therefore, the firms
paid contract penalties for delayed shipping (JM-5). Other firms also stop the delivery
completely during floods because the trucks have difficulties to reach the customers
or transportation hubs. The production is halted, and products are stored to a higher
level of the plant to prevent damages or decreasing product quality due to the floodwater (e.g., JM-3). The enterprises stated that usually, the customers understand the
reasons for delayed shipping but enterprises, for instance, in the garment sector must
pay monetary penalties. Since the enterprises compete globally, the enterprises are