Impact of the Corona Crisis (1/2)
It is the topic of the last weeks and months: the Corona crisis. There has been much reporting and discussion. About the number of cases, the consequences for small businesses as well as for whole branches of industry. But what is the situation in medium-sized companies with a global presence? Which critical factors have to be circumvented and can a pandemic even offer opportunities? These were the questions posed by POLIFILM CEOs Paul Beaver, subgroup POLIFILM PROTECTION, and Eckehard Betz, subgroup POLIFILM EXTRUSION.
In part one of the interview you will find the answers, how customers and markets have acted and whether the effects within a group of companies are really the same?
At the beginning, only China made the headlines, then Italy, the first country in Europe, also had cases of COVID-19, both countries where POLIFILM has production sites. To what extent were you able to estimate the further extent at that time?
PB: Frankly, we weren’t. We had never experienced anything like this before. We didn't know and still don't know exactly how long the pandemic would last and to what extent it would affect us all.
EB: I can only agree with Paul. Very few of us have ever consciously experienced a pandemic. Not to mention the active management of such impacts on the economy, globally and regionally and on this scale. We were suddenly all the same - leaders, politicians, experts, fellow citizens. Until now, the only way we have been able to navigate through the crisis has been by carefully observing developments and applying common sense.
How did your customers, your markets react to the rapid spread of the pandemic known today?
PB: In very different ways. When experienced every scenario - from the occasional closure of key accounts in the UK, to the complete lockdown of customers in Spain, countries that only reduced their usual business activities to customers in Germany who generally continued business as usual. (Editor's note: PB is based in the UK)
Mr. Betz, EXTRUSION has its headquarters in East Germany. Can you confirm the perception of your colleague?
EB: Our customers and suppliers, like us, were keen to maintain the supply chain against all odds and to keep their delivery promises. As a result of this attitude, we received early calls for pandemic plans at the site, for example. I remember these "what if" plans from my time in the automotive industry. Unfortunately, my POLIFILM desk drawer was empty regarding these, so we all had to react quickly to give our partners - and ourselves - a feeling of reassurance.
How did you manage that?
EB: In an ad hoc workshop we created the framework for managing the crisis and put together a corona working group. From this, hundreds of ideas for measures were drawn up, examined and around 60 of these were introduced. These had concrete effects on all of us - including suppliers, service providers, partners and customers - both professionally and privately, and thus also as a consequence on the company. In order to keep everything up to date, the group met daily.
PB: Daily was also the keyword in POLIFILM PROTECTION. During the peak of the outbreak, planning beyond one week at a time wasn’t possible due to our international orientation.
Can you elaborate on that?
PB: As a globally positioned company, there were no two days the same for us. Whilst we saw the pandemic develop in some parts of the world and thus a changed demand pattern, in other parts of the world orders were increasing. The only thing we knew for sure after a short time was that (almost) everyone would be affected because in the end the world is a small place.
What was the biggest challenge?
PB: For us and for the markets we serve, things were going well in the first few months of the year. This was suddenly all changed by Corona because unlike a normal recession, the virus came unexpectedly overnight.
EB: That is also the reason why he stirs up so many fears. The danger was and is so intangible. In the global economic crisis of 2009, there were still the banks that could be wonderfully demonized. But now? Facing this incomprehensible virus and the worries associated with it, both towards partners and employees, is probably one of the biggest challenges.
Do these fears also manifest themselves through effects on your portfolio?
EB: In EXTRUSION we have an enormously broad customer base that is at home in many industries. So there were natural compensations. One branch of industry was in a bad way, while the other, for example in the field of hygiene products, was just about to shine. I don't think it was any different in PROTECTION?
PB: Definitely not. We too have experienced both extremes. However, together with the management team, we were able to compensate for the capacity freed up by the loss of heavily affected market segments. We pushed ahead with supplying manufacturers of products used to combat and protect against corona, such as medical partitions, face visors and temporary plastic barriers. For these products protective films are important for surface quality and protection.
EB: We know something like that. For example, EXTRUSION now offers disposable hairdressing capes and has supplied hospitals with films that serve to distinguish patients. This gave us ideas for other hygiene-relevant applications that are currently being tested.
So Corona brought new applications with it.
EB: And not only that. I think it also changed the way we look at our industry. Before, we were at best packaging manufacturers and at worst environmental polluters, but the crisis confirmed our systemic relevance. Just how important it is to maintain logistics chains in such situations was demonstrated by the sudden shortage of hygiene products. All I can say is: toilet paper. That this shortage was not due to us was something we all ensured with great dedication and energy. (Note. D. Red. said Betz with a wink)
You got a point there. In Germany it was flour and toilet paper, in Italy eggs. But it wasn't only in the purchasing behaviour of the consumers that there were big differences. There were also differentiated catalogues of measures and rules at the social and political level, as well as different implementations of these measures over different periods of time.
Did you also notice such differences in the organization?
EB: In the case of EXTRUSION, we have so far been able to coordinate well within Germany in the plants and the sales organization. But we have given the branches outside Germany a free hand to optimize themselves within the framework of local legislation.
What is your assessment of the current situation?
PB: The current situation could be better, but also worse. We are seeing a slow return to normal business levels in a number of the countries we serve today. Of course, it could be faster. In general, thanks to all our efforts, we are making good progress and are supporting our customers as much as we can during this period as we always do.
EB: The first steps towards normality we try to take in a controlled way internally. So far, we are Corona-free. Not because of this, but nevertheless, we have already relaxed or lifted many of the measures that have been introduced and rely all the more on the common sense of our employees to protect themselves and their colleagues.
They say that every crisis also holds opportunities. What were the chances for POLIFILM?
PB: First and foremost, we were able to prove what we have always promised: We are a reliable partner for our customers. We demonstrated absolute flexibility - at portfolio, management and location level. We were available to everyone at all times. Even for customers from the countries whose economies had suffered most, including plant closures. We were able to guarantee that contacts were available at every staff and hierarchy level for fast and reliable communication with the customer.
Being there for the customer is one thing. But how did a company manage to get through a pandemic with its employees? What really and above all helps managers in such extreme cases - can everything be the same afterward as before? All these questions are dealt with in the second part.Read more here.
(Editor's note: Due to better readability, gender-specific naming and spelling has been omitted.)