Today’s times are unprecedented, characterized by deep and extensive economic, social, and political implications, with the world in the grip of Coronavirus (COVID-19) pandemic. With the spread of the dreaded virus showing no signs of abatement, uncertainty is the order of the day.
To flatten the COVID-19 infection curves, countries across the world have implemented lockdown to instill social distancing and shut down all establishments, including government, businesses, airlines, education and public transport system as an emergency protocol. The unintended consequences of the lockdown on social life, businesses and economies will be immense and far-reaching. This enormous health crisis will have dreadful implications, not only on individual family units but also on businesses and economies. It seems that the virus is fast changing the way we live and, in all probability, making it irreversible.
The day-to-day life has undergone a sea change. Some of the measures taken, such as staying at home for weeks, closed offices, shops and establishments, work from home, social distancing, intensive hygiene practices, seem almost surreal with bustling metropolises resembling ghost towns. Internet and digital platforms are playing the role of life support system. In the current situation, life is unimaginable without data and digital platforms. Even businesses with strong digital capabilities are slowly but tentatively transitioning to the new way of digital work culture, focusing on continuation of business and safety.
Our digital services arm, Jio, has become the lifeline for nearly 40 crore Indians, even more so during this nationwide lockdown. The retail arm, Reliance Retail, in collaboration with procurement groups across Reliance Industries Limited (RIL), is working relentlessly to source equipment and materials required for testing, isolation and treatment of COVID-positive patients, as well as personal protective equipment like masks, caps, shoe covers, coats, pants, eye wears etc., made out of plastics.
Furthermore, Reliance Industries Limited has contributed Rs. 500 crore towards PM-CARES, and Rs. 5 crore each towards Maharashtra CM and Gujarat CM's funds. RIL has also set up a 100-bed centre at Seven Hills Hospital in Mumbai exclusively for coronavirus patients. Reliance Foundation is also providing free meals to marginalized people in partnership with NGOs.
We, both as Individuals and as a part of the Indian chemical Industry, take up this challenge and focus our efforts in proactively re-imagining our future course of action to get the industry back on growth orbit.
Our top priority should be to proactively assess what we can contribute to help the country to emerge from this unprecedented crisis and mitigate the impact of this pandemic.
As far as the industry is concerned, COVID-19 is, unfortunately, having a ripple effect on oil and petrochemical industry. The spread of the pandemic and the resultant drastic containment measures taken across the world has led to a crash in prices of most of the commodities to historic low levels. If one look at the forecast by leading economists, the impending recession seems inevitable. Furthermore, oil prices have crashed to the lowest in two decades amid deteriorating geopolitical scenario. Petrochemical prices too have plunged.
Industry players are focusing all their efforts in sustaining margins amid sharp reduction in demand. The supply chain logistics were in shambles due to lockdowns and movement restrictions, impacting delivery of products.
As and when we come out of the COVID-19 pandemic, the task to overcome uncertainty, reviving economic activities, recouping businesses and reconstructing our social lives would be a mammoth challenge.
At this juncture, it is difficult to predict when this pandemic will end, and its stark impact on business. However, we at Reliance believe in the articulation of our Chairman and Managing Director, Mukesh Ambani: “Even though the challenge we face is of historic proportions, together we shall overcome, and India shall overcome.” With him at the helm, we surely will overcome the crisis and emerge stronger and better.
China, once the most affected nation by the COVID – 19 pandemic, brought the spread of Coronavirus under control by implementing some extraordinary containment measures. Limiting the movement of millions of people and rapid medical response have helped China control the spread and improve operating rates of its petrochemical plants to reasonable levels from late February 2020.
China’s economy is on its way to be back on track. With factories reopening, production levels are spiking again, offices have reopened and consumers are returning to stores.
Chinese polymer capacities are presently running at around 90% as compared to 65% in mid-February, whereas polyester operating rates are at around 80% as against 60% about two months ago.
A study on consumer behaviour patterns amid the Coronavirus pandemic has found that most of the product groups being heavily consumed and growing are related to chemicals and petrochemicals industry. There has been a surge in demand for hygiene and medical items like sanitizers, disposable gloves, masks, gowns, goggles, protective clothing, medical equipment and over-the-counter medicines.
Plastics has been the only material convenient and viable in the medical field and has once again come to the aid of humankind. Use of disposable hygiene products are proving to be the saviours of human lives by preventing the transmission of infection and disease from one person to another.
As per the WHO and UN agency estimates, around 89 million medical masks, 76 million examination gloves and 1.6 million surgical goggles will be needed every month across the world in this fight against COVID-19.
The petrochemicals industry will play a major role in meeting the need of the world in containing the COVID-19 pandemic. We should initiate a reach-out programme to ascertain challenges among teams, customers and trade partners, and chalk out a constructive plan to overcome the challenges. It is imperative that we accelerate digital transition and offer robust online and offline business mechanisms to bring business back to pre-pandemic level.
During this transformative challenging time, real-time tracking of markets, dynamic demand sensing and response mechanisms, review procedures and progress reporting, quick and timely decision making, and continuous guideline updations will be crucial.
On the supply side, it is important to establish more robust risk management processes and ensure that they are not flouted.
Businesses have to more effectively manage costs in order to ensure liquidity and access to capital. As an industry, we should create a charter to seek economic packages from the government, especially for smaller businesses.
To overcome the impact of the Covid-19 pandemic, it is imperative that the industry collaborate, co-operate and work together as a team to strengthen the entire eco-system. These measures will help India to conquer the impending economic crisis.
The entire Reliance Industries team is with the nation in this hour of crisis. We will do everything to win this battle against COVID-19.
Author: Vipul Shah, COO - Petrochemicals, Reliance Industries Ltd.
DISCLAIMER: The views expressed are solely of the author and Indian Chemical News does not necessarily subscribe to it.