14 July, 2020
RALEIGH, North Carolina, Jul 14, 2020 -The coronavirus pandemic has had a mixed impact on the capital equipment industry. Although dominant supply bases have been affected, COVID-19 has given a push to adoption of newer technologies to capital equipment OEMs, especially those operating in the essential services category like, healthcare and food, according to Beroe Inc, a procurement intelligence firm.
However, many capex OEMs have reduced their work force to only those employees necessary to support projects deemed critical and essential especially for the food and pharmaceutical sectors.
There has been a medium impact of COVID-19 on process equipment, with dominant supply bases in China, India, Japan, South Korea, U.S., Germany, and Italy, being affected for products such as pressure vessels, heat exchangers, boilers, and reactors. In comparison, there has been a low impact on packaging machinery products and pharmaceutical production machinery products such as tablet press, tube/capsule fillers, granulator/coater/dryers, mixers, and homogenizers. Dominant supply bases affected by COVID-19 are Germany, France, Italy, U.K., Belgium, U.S., China, India, Japan, Korea, and Taiwan.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on market intelligence platform Beroe LiVE: live.beroeinc.com
Process equipment OEMs manufacture many critical components and equipment used in the food processing and pharmaceutical industries, like pressure vessels, heat exchangers, cooling towers, etc. So, these industries have been designated as critical and as such they and their supply chain partners have been exempted from any shut down order; but the companies have to run with a reduced work-force. However, the customer base of these OEMs are affected by COVID-19 with many projects being delayed or deferred, resulting in many global OEMs reporting revenue losses in Q1 2020.
After struggling with the economic downturn brought in by COVID-19 pandemic in the last few months; OEMs are resuming their normal businesses globally but with increased safety measures and reduced workforce. Capex OEMs are recalibrating their shop floors to meet health and safety protocols and social distancing norms without hampering productivity as they restart production after the lockdown norms being eased. So, to absorb the extra spending on health and safety equipment, OEMs are expected to pass down the costs to their end-users.
The research methodology adopted for the report included:
The supply demand gap is expected to remain low as operations in both end use and the supplier side have been affected, thereby leading to relatively low price volatility. However, procurement from alternative sources could potentially lead to hikes in raw materials, component prices and logistics costs. As a result, the final price of newly manufactured capital equipment will be higher than the previous lots in the future. With an absence of manpower, OEMs have started offering remote installation support, remote services, remote planning, remote testing, and remote training.
The report also includes:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com
COVID-19: Assess impact on your suppliers and ensure business continuity with Beroe’s WIRE
(World Instant Risk Exposure)