With the spread of COVID-19 around the globe, water purifier manufacturers are taking extreme measures in the form of plant closures to curb the spread of COVID-19. The situation remains uncertain as an increasing number of European companies have suspended work, and manufacturers in the US and APAC regions have extended the shutdown periods. Declared a pandemic by the World Health Organization (WHO), COVID-19 has compelled the governments of several countries to impose lockdowns in an effort to reduce its spread. However, these lockdowns have impacted various industries as well as the normal lives of people across the world. It is predicted that the impact of the virus is going to be felt through the end of 2021. So, the governments of various countries are finding alternative means to bring their operations back to normalcy by introducing rescue packages or disaster management bills to boost their economies.
The COVID-19 pandemic has impacted the reverse osmosis (RO) water treatment system component market positively. As per the World Health Organization’s (WHO), the coronavirus can rapidly spread through drinking water and sewage water. This factor is expected to drive the adoption of RO water treatment systems during the COVID-19 outbreak. However, the demand for water purifiers through 2020 is expected to be lower than the pre-Covid period.
So far, the coronavirus has not been detected in drinking-water supplies and based on current evidence, the risk to water supplies is low. In places where safe piped water supplies and centralized water treatment are not available, some household water treatment technologies have been found to be effective in removing or destroying viruses by using ultrafiltration or nanomembrane filters and UV irradiation filters.
The regional impact of the pandemic outbreak is highly variable, but as it spreads, the status in the harder hit areas provide a glimpse of what may be witnessed in the near future. Asian countries, European nations, South and North American countries, and several other regions have been impacted significantly. Every country is at a different stage of this pandemic and is facing a unique set of problems. Water purifier manufacturers are facing challenges such as a decrease in the workforce, that too with the required precautions. So, ensuring the health safety of employees, along with an optimal production rate, has become a challenge for water purifier manufacturers, and the recovery process may require months to get back on track in the post-pandemic period.
Several water purifier manufacturers, including Unilever, A.O. Smith, and 3M, have planned to resume water filter production, after some plants shifted operations to produce personal protective equipment (PPE) and ventilators, either voluntarily or because of the Defense Protection Act.
Water technology companies have rolled out a series of safety measures to protect workers, including PPE, such as face shields and masks, the use of temperature monitors for those entering plants, and revamped and deep-cleaned factory floors that emphasize safety measures such as social distancing.
Most filter assembly plants have reopened after weeks or even months of inactivity under the coronavirus lockdowns, but very few are operating at anything close to full capacity. A.O. Smith stated that in February, it had closed its three Chinese facilities as per local government orders. Those plants have since reopened and have seen an improvement in orders as compared to February and March. A.O. Smith has faced the hardest impact in the Northeastern US and California. However, Unilever’s growth in India was impacted both by the slowing market and the lockdown imposed at the end of March 2020, which halted its production and shipping for several days.
As of mid-July, water purifier manufacturers reported their production rhythms across the world in varying degrees of detail. Among them are:
A.O. Smith:
Its three Chinese facilities were closed in February as per local government orders. After reopening in May, it has seen an improvement in orders as compared to February and March.
PENTAIR PLC:
Pentair was forced to reduce production in its Minnesota facility and withdraw its financial guidance due to the coronavirus. However, owing to the slow but continuous production, the global demand for the company's products remained healthy.
3M.:
Its factory in the US continued to ramp up production to help protect healthcare workers during the COVID-19 pandemic. The spread of the virus has triggered growth in business areas such as drug delivery, medical solutions, water treatment systems, filters, and general cleaning supplies.
UNILEVER:
Its facilities in India were closed at the end of March 19 due to a complete lockdown in the country, stopping the company’s production and shipping for several days. On July 19, the company closed down its Haridwar plant temporarily, where several of its employees had been tested positive for COVID-19. This closure may result in supply and demand disruptions, leading to sharper growth deceleration in the near future.
Amidst the COVID-19 pandemic, investors and manufacturers are pulling back on production and reconsidering investments, which is expected to act as a key headwind for the growth of the global water purifiers market. The halt in the production of water treatment systems has affected the demand for water purifiers globally. The pandemic is expected to have a mixed impact on the global water purifiers market in the short-term (2021–2022). However, the long-term growth of the market is expected to remain positive.
All countries across the globe are trying to strike a fine balance between protecting health, minimizing economic & social disruption, and respecting human rights. The growing spread of the coronavirus has led to disruptions in the raw material markets. Restrictions on shipping and industrial production are affecting multiple supply chains. Distribution of components is the key process in the manufacturing industry, which is facing challenges such as staffing of warehouses, a need for direct distribution, and more intelligent & responsive allocation across channels due to the pandemic, which has led to pressure on the supply chains. The impact on the US market from the disruptions in China is expected to be significant. It is bound to impact the world economy and disrupt global supply chains acutely.
Water purifier manufacturing involves complex processes, with subcomponents that are sourced from several countries across the globe to assemble a single product. The raw materials necessary for the manufacture of these subcomponents could also be sourced from different countries and continents, and the finished products need to be transported all over the globe. The dependency on logistics makes the import & export of raw materials and finished products more complex due to disruptions in the supply chains.
Supply chain disruptions have further created cash flow constraints across the extended supply chain. SMEs are currently struggling for profitability. Companies with low cash reserves have become unstable. However, large-scale manufacturers still appear to be in good financial condition but are unsure about when the supply chains will return to normal. There has been a reduction in cash inflow due to the fall in demand. Also, the majority of companies require high working capital to remain in sync. On the other hand, demand for carbon filters is likely to be affected, as this segment has been impacted significantly due to the consumers’ reduced purchasing power and economic/market sentiments. Thus, continued cash flow tightening is expected to impact the water purifiers market further.
World trade is expected to witness a fall between 12% to 30% in 2020, as the COVID-19 pandemic has disrupted the global economy. The inevitable declines in trade, production, and output are likely to lead to dire consequences for businesses, apart from the risk of the life-threatening disease itself.
According to the United Nations, the global economy is projected to contract by around 1% or more instead of registering a 2.5% growth projected by the World Economic Situation and Prospects report 2020. The world economy contraction rate is expected to be more than 1% or possibly more than what was experienced during the global economic recession of 2009 (i.e., ~2.5%) if the governments fail to provide required income support and help lift consumer spending.
The restrictions on travel and social interaction have directly affected transport, travel, and labor supply. Entire sectors of national economies have been shut down, including restaurants, hotels, tourism, non-essential retail trade, and a sizeable part of manufacturing.
The COVID-19 pandemic is still spreading rapidly, creating considerable challenges for healthcare systems, and causing disruptions in supply chain operations.
