New trends wash over Indian industry in light of COVID-19

2020-06-10

The worldwide spread of coronavirus has had far-reaching consequences on different industries and sectors. We speak to industry leaders on the impact of the pandemic on their business and the measures taken by them to tackle the challenges.

As industries and sectors grapple with the COVID-19 pandemic, companies across the world have been battling supply chain lags, labour shortage, labour safety and several such other challenges that threaten to shut down their business. We talk to leading industry players on how they have been affected by the pandemic and the efforts taken by them to cope with it.

Pandemic brings focus on industrial automation
The COVID-19 outbreak has spread across the world, leaving a trail of destruction in its wake. With respect to the impact of COVID-19 on industrial automation, John Young, APAC Director, EU Automation said, “We have seen many companies looking to invest in factory maintenance because of the lockdown. While some changes are inevitable, demand remains high. We are also anticipating that the disruption caused by COVID-19 will lead to an accelerated uptake of new technologies. In other words, a greater need for new ways of working will in fact encourage many companies to invest in newer, smarter technologies at an earlier stage.”

He adds, “On the other hand, some companies might take the opposite approach given the climate of uncertainty. We have seen some companies deciding that it makes better financial sense to invest in replacement parts for their existing equipment, rather than paying larger sums to invest in entirely new machinery. Our approach has always been to make sure we can supply whatever our customers need, whether it is new, reconditioned or obsolete parts.”

Investment in industrial automation was not given much thought by companies, especially the smaller ones, before COVID-19 struck, having been slowed by flat capital expenditure and declining industrial production. The spread of the virus has since closed factories, and workers across the world have been sent home. It has exposed the fact that despite a lot of hype over the years, advanced factory automation has not been substituted for human workers at scale. The virus may serve to accelerate investment in factory automation when the global economy eventually rebounds, but that will take a while.

New product development in aviation brought to a halt
The global aviation industry is dealing with uncertainties and hurdles in manufacturing and operations of all types of aircraft and related services during transportation. According to the World Bank Organization, in 2018, around 4.2 billion passengers were carried around all across the globe. Factors that were driving the aviation industry before the COVID-19 pandemic include increasing disposable income all across the globe, the introduction of low-fare airlines, increasing global economic activities, new travel trends, and many more. Moreover, replacement of aging commercial aircraft has also contributed significantly to the market growth.

The key factors now affecting the aviation industry during the pandemic include the decline in tours and travels as a large number of international as well as domestic flights have been cancelled across the world to curb the transmission of the virus. International governments are also cancelling foreign visas and locking down affected areas, which are some of the other major reasons behind the slowdown of the aviation industry.

To this, Sharadhi Babu, CEO, AXISCADES stated, “The COVID-19 pandemic has hit the aviation industry harder and faster than most of the other crises that we have seen in the past. Airline capacity cuts, layoffs, fleet groundings, and talks regarding the halting of jetliner production have been happening at an alarming rate for the past several weeks. With the rise of this pandemic, teleconferencing would turn out to be the most preferred means for setting up meetings, in turn affecting a substantial amount of air travel demand, particularly the business class customers. Any form of government aid is not likely to focus on new product development, given the proximity of this pandemic impact on the company business. When the tides do turn with the COVID-19 curve flattening across countries, the aviation industry will focus more on MRO activities instead. The US airline industry also wants $50 billion as government aid in the form of loans, grants, and loan guarantees. Moreover, the geopolitical and macroeconomic drivers behind the aviation industry growth for jets will be majorly affected by the pandemic. The disruption to the supply chains will lead to more in-shoring for many industries, even without any government pressure.”

Applications of 3D printing extend to vital operations amidst lockdown
As manufacturing supply chains struggle in the wake of the nationwide lockdown, 3D printing applications have expanded to now make key equipment for use in the fight against the COVID-19 pandemic. Several factories, universities and institutions across India which already have 3D printers are now using them to manufacture face shields and ventilator splitters, which allow a single ventilator to be used by 2-4 patients simultaneously.

Benjamin Tan, Vice President of Ultimaker Asia Pacific said, “We help companies identify pain points and enhance their workflows through physical site scans. These are important aspects of the buying process as they enable us to impart industrial 3D printing knowledge, and help customers better understand the benefits of 3D printing. With face-to-face interactions no longer possible, we have been conducting virtual site scans to support our clients. As part of our channel distribution model, most of our sales activities which were driven through participations in trade shows and workshops have now come to a standstill. Hence, we have turned to e-conferences and virtual workshops with customers to ensure business continuity.”

Packaging industry steps up production
There are both positive and negative effects of COVID-19 seen in all the sectors, but the packaging industry seems to be enjoying more significant benefits than the other industries that have been affected by the spread of coronavirus. As many countries are under shutdown due to the deadly virus, stocking up on necessary supplies such as medicines, dairy products, food, sanitisers, face masks, disinfectants, etc. has been in high demand. All these products require packing, and their production has been higher than ever before. Consumers around the world prefer packed products rather than products that are sold loose such as fruits, vegetables, etc. Hence, the demand for the packaging industry has increased greatly due to the pandemic.

Pankaj Poddar, CEO, Cosmo Films says, “The packaging industry has been fortunate enough not to have as much disruption in their business as some others. Having said so, given that so many sectors are under shutdown, most players may not be able to ramp up their capacity beyond 50–60 percent. There were several challenges when we started production which got resolved gradually. Some challenges like the availability of transportation, of manpower due to the fear of the virus, increasing stock, and payment delays still persist. Currently, all our plants are running, and we are continuously ramping up our production to cater to our customers in India and around the world.”

Manufacturing slows down
Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt. Ltd. said, “Since the COVID-19 outbreak, we have been severely impacted. The manufacturing of our products has been completely stopped and all our plants are non-operational at present. In line with the founder Konoseke Matsushita’s philosophy, it is “People First” for us and since 24th March 2020, all our employees, workers (including contract and temporary) and staff have been advised to stay at home. We ensured early payment of salary to support them through the challenging time and shall continue to do so till the end of this epidemic. We have established a helpline in every factory where any employee of our company can call up and seek advice about their health or their family’s health, related to the suspected infection.”

He added, “Our business will be affected for a long period even after India opens up, having fully controlled the disease. This is primarily because the construction and renovation industry, upon which our business is dependent, employs a lot of migrant workers who have faced a lot of hardship and financial strain during this period, despite government and business support. Many of the workers have gone back to their village and are unlikely to return soon. In addition to this, the construction industry will also face a severe cash constraint for many months, further delaying the ongoing projects and postponement of new projects, both residential and commercial. While we do not have a high dependency on China directly, many of our ODM vendors source materials and components from there, and they have been affected. However, since China is moving back to normalcy (most manufacturing has started working at partial capacity), it is likely that by the time India opens its businesses, supply challenges will be reduced.”

He states further, “We are dealing optimistically with the entire situation and our teams in our head office, sales branches, and factories are engaged in scenario-based business planning for the new financial year — based on worst case (as can be anticipated today) — and thus the required actions for achieving it, taking into account the COVID-19’s adverse effect. We have also used the lockdown time to train and educate our sales force through online presentation of our products and related technologies, strengthening awareness of our “new products and businesses” which have been launched, and have also taken up sessions on soft skills like key account management and presentation skills, etc. We are encouraging our factories and the support functions to initiate similar online sessions. Our sales and business development teams are also sharpening their understanding of existing and potential customers and their plans. This will help them focus more objectively and develop a tailored sales pitch. We have been communicating with our customers through mailers about our new products launched during 2019 and 2020. We believe that it is a great time to get undivided attention and our teams across functions are following these opportunities very enthusiastically.”

He concludes, “Each of our location administration heads has been advised to support the government and the local bodies in every way for overcoming the corona challenge and our factory ambulances at Haridwar, for example, have already been deployed for supporting local administration. At Panasonic, we remain committed to building a world that is simpler, safer and comfortable.”

Metal cutting industry to stabilise by next year
Prashant Chaturvedi, General Manager – Oxyfuel Business and Head – Marketing, Messer Cutting Systems India Private Limited stated, “COVID-19 has impacted the whole world, so we are not different, but we utilised this time for a lot of documentation, training, and design work. This has helped us to cover our backlog of work which was left. Our metal cutting equipment manufacturing industry will have an impact in 2020, but with demand showing recovery from July onwards, we will be able to manage 2020 well, and from 2021 onwards we see a positive trend.”

EV market may win over conventional automotive business
As the COVID-19 crisis rages, public life in many countries has ground to a halt. The toll on human life has been enormous, with the patient caseload and deaths increasing exponentially worldwide. On the economic side, the coronavirus has forced many businesses to cease or slow down operations. Automotive OEMs and players within the mobility industry are among the hardest hit. Over the long term, COVID-19 could have a lasting impact on mobility as it drives change in the macroeconomic environment, regulatory trends, technology, and consumer behaviour. However, the trends may vary by region, so responses and outcomes for mobility players will differ by location.

To this, Maxson Lewis, Managing Director, Magenta Power said, “While the extension in the nationwide lockdown was necessary and expected, this elongated lockdown should be used by the government to plan for the exit plan. Electric vehicle (EV) owners, due to this extension, would have to arrange the charge and discharge of their cars at location, and expect service issues only post lockdown. This goes for petrol and diesel vehicles as well for their lead acid starter batteries. As an industry, the EV segment has been less impacted since the large-scale adoption was yet to happen as compared to the traditional auto industry. However, the demand derivative for EVs is linked to overall auto demand which has been and will continue to be impacted, pushing the EV business investments plans out by months. But as an internal optimist, this extended lockdown could also mean that traditional auto may look towards EV as the reset plan.”

COVID-19 has impacted the whole world, so we are not different, but we utilised this time for a lot of documentation, training, and design work.
Prashant Chaturvedi, General Manager – Oxyfuel Business and Head – Marketing, Messer Cutting Systems India Private Limited

With face-to-face interactions no longer possible, we have been conducting virtual site scans to support our clients.
Benjamin Tan, Vice President of Ultimaker Asia Pacific

When the tides do turn with the COVID-19 curve flattening across countries, the aviation industry will focus more on MRO activities instead.
Sharadhi Babu, CEO, AXISCADES

The packaging industry has been fortunate enough not to have as much disruption in their business as some others.
Pankaj Poddar, CEO, Cosmo Films

A greater need for new ways of working will in fact encourage many companies to invest in newer, smarter technologies at an earlier stage.
John Young, APAC Director, EU Automation

Since China is moving back to normalcy (most manufacturing has started working at partial capacity), it is likely that by the time India opens its businesses, supply challenges will be reduced.
Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt. Ltd.

As an industry, the EV segment has been less impacted since the large-scale adoption was yet to happen as compared to the traditional auto industry.
Maxson Lewis, Managing Director, Magenta Power

Reference: OEM Update