Covid-19, the sheer pandemic situation has affected each and every part of our lives with businesses of all nature, finding it difficult to swim across the competing challenges and uncharted waters. The virus has gone beyond affecting the health of all to transform the economy across countries.
The hard blow across distinct sectors of economies has not spared the chemical industry as well. This industry has suffered a significant blowout and is likely to feel a strong adverse Global Chemical Industry COVID-19 Impact. The large scale chemical industry is widely known for its role in producing several products, including medicines, plastic, fertilizers, and packaging products, and much more.
Challenges Faced By The Chemical Industry Due to COVID-19:
The spread of the virus has brought several production facilities to a halt. Similar to how several outbreaks disrupt supply chains in major vital areas, there is a high chance of demand falling as the level of uncertainty rises across the capital markets and the global economy. The initial crippling began with the virus dropping its severe impact on China’s supply chain, a country known as its source. This incident took to cutting a majority of the primary ingredients beneficial for use in generic drugs.
If you have been wondering how the chemical industry is affected by COVID-19, well, it is indeed a lengthy analysis. Alongside, a significant drop in oil pricing as a result of reduced availability of chemicals and refined products in addition to failed agreements on production cuts has brought about a state of despair for the chemical industry at large.
The pandemic is furthermore leading to an excessive concern along with economic hardship for a large number of individual consumers, businesses, and several communities across the globe.
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True Nature of The Impact of COVID 19 On The Chemical Industry:
The industry has majorly been struck by the outbreak across several fronts such as lowered demand and productivity, disruptions in supply and operation chain, workforce health, and a few more. The industry has been majorly a vulnerable one, mainly due to the bulk of the production workforce being active across on-site jobs.
Furthermore, the nature of the industry also makes it all the more difficult for companies to enable the workforce to exercise social distancing. With the global supply chain experiencing significant disruptions, the entire industry is up for a supply challenge with not being able to fulfill orders during the crisis period.
The leading chemical manufacturers, as stricken by the pandemic situation, are slowly reducing capital along with operational expenditure. Moreover, these companies have suffered a significant cutback on manufacturing operations due to a lack of workforce and disruptions in raw material supply.
The production of chemicals has dropped by 2.4% since February 2020. China, too, witnessed a significant collapse of the chemical manufacturing industry where the profits were reduced to 66%, a report as stated by the National Bureau of Statistics of China.
The chemical industry had experienced one of the most significant grave losses when it experienced a standstill in export business. The complete stop in traveling with countries closing respective borders, there has been a considerable loss incurred by the sector due to the inability to perform export functions.
Apart from this, the production of synthetic rubber along with specialty chemicals like coatings and paints has suffered a downfall with the industry of coating and paints experiencing low demand. This scenario is majorly experienced due to the cease of construction activities. With the drawn restriction on travel, there has been a stark decrease in the demand for petrochemicals, which are mainly beneficial for use in tires.
In addition to this, the US chemical industry alone employs more than 850,000 workforces, where a significant share of the positions is involved in the direct production that makes it difficult to work remotely. In the event of this outbreak, the companies might need to reconsider outsourcing some of the corporate functions.
The supply chain of the chemical industry has furthermore been historically dependent on China that has collided with the stalwart being one of the most significant Covid-19 affected zones in the world. China has managed to incorporate several combat strategies that have made the country a COVID free one. However, it has had a significant impact and effect on the shortage of raw materials supply. The world-wide disruption caused by global supply chains may further jeopardize chemical producers’ ability to deliver the finished products and supplies to the end customers.
A disruption in the field of the chemical industry is also responsible for several financial implications. The companies that have been hit and impacted by the pandemic might face many challenges while finalizing the financial statements amidst disrupted operations.
We are not over just here, as reduced productivity can also pose a significant constraint for the industry. The illness of employees can result in reduced productivity that can further reduce the total volume of work while making the production cycle a lot more challenging.
China is known as being the epicenter of the Covid-19, as discussed previously. Simultaneously, the most populated country of the world also serves as the primary link in the supply chain for many chemical companies. The pandemic might further drive this sector to consider many sourcing opportunities.
Several chemical companies have suffered a significant toll due to the affected pandemic situation, with Shanti Inorgochem being one of them. This scenario is not just restricted to India, but all over the world where chemical companies are finding it extremely challenging to combat the present issues while succumbing to the pressure and evaluating new strategies to get back on the track.
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Future Steps to be Taken By the Chemical Industry:
1. The chemical industry impact of COVID-19 needs to hit a stable ground with drawing up a concrete plan for incurring the potential changes across supply chains and workforce population, facilitating global mobility. The changes cannot be achieved overnight; instead, it involves thoughtful implications and evaluating strategies that the companies need to chalk out.
2. Given the nature of the industry, it can be extremely challenging to practice and maintain social distancing along with staggered shifts for a sector depending on the workforce. The companies need to resort to incorporating technology across production areas that require less human intervention.
3. Proper implementation of an automated and remote-controlled production will help to reduce workforce density while guaranteeing an efficient mode of operation incurring minimum efforts. Extensive adoption of advanced digital solutions will help integrate the services with supply chain and logistics while enabling a timely product delivery.
The industry needs to prepare and plan for garnering quantifiable support in association with the respective government to recover its every sector. Shanti Inorgochem , a leading sodium bisulphite company in India, faces similar challenges at the work-front as mentioned above and is trying their best to respond efficiently to the constraints. The largest producer of sodium bisulphite producer of Sodium Bisulphite which is endeavoring to get back to track soon while offering the best to its customers.