The COVID-19 pandemic has influenced the whole planet with its major impacts on the economy and businesses across the globe.
The demand for intumescent coatings for fireproofing and spray-applied fire-resistive materials has decreased due to the outbreak of COVID-19 as the demand generated from the construction, oil, gas, automotive, and aerospace industries were reduced due to the lack of production in this market and delays regarding the transportation of finished products and raw materials.
Intumescent coatings fire proofing and spray-applied fire resistive materials come in a class of materials known as partial fireproof materials (PFP) used to decrease the damages inflicted by the fires. They can restrict the spread of fire by forming a carbonaceous char over the coated surface, thereby decreasing the damage inflicted. Since the COVID-19 managed to disturb the entire pattern of consumption and supply chains, value chains associated with the short-term investment plans of manufacturers and distributors were severely affected, forcing many a manufacturer to opt and adapt to new operational methods.
The governmental regulations associated with production and manufacturing were intended to ensure the health and well-being of employees. They had a severe impact on the overall dynamics of the market. These changes created several hurdles for manufacturers and distributors of intumescent coatings for fireproofing and spray-applied fire-resistive materials, severely impacting the global market. The manufacturers are adopting several strategies to gain a competitive edge in the current market scenario. Collaborations with other market players and manufacturers from other associated markets such as automotive, aerospace, building, and construction, among others, are helping manufacturers in stabilizing their financial conditions.
Further, several governmental and global agencies are coming forward to help market players until
the financial and production scenarios return to normal.
For instance,
- Since March 2020, the International Monetary Fund (IMF) has provided financial support against the crisis of COVID-19 to the countries. Along with advice related to the formulation of policies to develop and gain capacity that will help reduce the amount of debt that has been faced
Aftermath of Covid-19 And Government Initiatives to Boost the Market
The pandemic of COVID-19 has several adverse circumstances for the manufacturers involved in the global intumescent coatings for fireproofing and spray-applied fire-resistive materials market, mainly to the small and medium scale enterprises.
With the lack of working capital and shortage of funds for reinvestment, many small and medium scale manufacturers are forced out of business and are on the verge of bankruptcy. With the sudden rise in the cost associated with manufacturing, storage of already purchased inventories, and supply, when combined with the fluctuating raw material prices, many manufacturers are facing a lack of working capital.
Several governmental organizations are working tirelessly to formulate policies to support such manufacturers. Many non-governmental organizations are also coming forward to provide a helping hand in these respective case scenarios. One of the instances where companies adopted strategic policies such as Saint-Gobain implemented many contingency plans for the workers' safety by closely monitoring the updates of COVID-19. Further, there are several instances where non-profit organizations came forward to help. One of such case scenarios was the decision of the International Monetary Fund (IMF) to financially help small and medium scale manufacturers with rapid financing instruments (RFI) and rapid credit facility (RCF).
To withstand the current and future scenario of COVID-19, the manufacturers are into the adaptation of new technologies and systems for the manufacturing of intumescent coatings for fireproofing and spray-applied fire-resistive materials so that the demand and economic condition of the company are maintained with no further loss of economy.
STRATEGIC DECISIONS FOR MANUFACTURERS AFTER COVID-19 TO GAIN COMPETITIVE MARKET SHARE
The sudden befall of coronavirus has disrupted the market rhythm of the global intumescent coatings for fireproofing and spray-applied fire-resistive materials market. Although, the recent market scenarios are returning to normal, and growth is witnessed for the materials in building, construction, and industries.
Significant destruction in the supply chain of building and construction market and strategies associated with automobile manufacture is creating a challenge for the intumescent coatings for fireproofing and spray-applied fire resistive material manufacturers. Thus, manufacturers are taking several initiatives and decisions to mitigate the demand and supply gap and ensure hustle-free manufacture and supply.
To combat the current situation, many manufacturers have started to utilize the e-commerce option to a greater extent for materials sales. This is providing considerable relief to the manufacturers in the global intumescent coatings for fireproofing and spray-applied fire-resistive materials market. Many established market players are trying to continue production by maintaining the rules and regulations for work safety declared by WHO and governments to remove the gap in demand and supply of the materials to reestablish supply chain and production capacity. Several manufacturers have also started to collaborate with industrial equipment manufacturers, helping the fireproofing material manufacture to grow the market.
Impact on Price
Since the emergence of the pandemic, the price of intumescent coatings for fireproofing and spray -applied fire -resistive materials are fluctuating. A significant flux in prices was witnessed during the sudden lockdown due to the lower demand from the end-users in the market.
The building and construction industry, which has the largest source of demand for the intumescent coatings for fireproofing and spray-applied fire resistive materials, has witnessed a significant reduction in revenue generation during the pandemic.
Due to this, an enormous disruption has been witnessed in demand for intumescent coatings for fire proofing and spray applied fire resistive materials, which directly impacted their price. Similarly, with an increase in supply value with fewer demand generations from different industries, the price of intumescent coatings for fire proofing and spray applied fire resistive materials still has to go a long way before attaining proper stability.
Further, the restriction on the supply chain also plays a vital role in the fluctuation of prices of intumescent coatings for fire proofing and spray applied fire resistive materials as the availability of raw materials is currently higher along with a higher procurement rate. The transportation cost also witnessed a hike which further affected the price of commodities in the market.
Impact On Demand
The fluctuation in demand for global intumescent coatings for fire proofing and spray applied fire resistive materials market arises due to demand fluctuations in different sectors such as metal automotive, building and construction, oil and gas, and others.
The demand for coating products has declined in the construction industry due to the delay in completing the construction projects.
For instances,
- In March 2020, according to mass.gov, Boston state shut down all construction sites and other Massachusetts areas due to increasing suit of construction delays
- In May 2020, according to Europe.eu, the construction activities in Europe had risen by 21.2 % compared with April, but compared to the previous year; the number has fallen by 10.3%
During the complete global lockdown, a decline in production in the automotive industry was observed, leading to a reduction in demand for intumescent coatings for fire proofing and spray applied fire resistive materials. The distributors and manufacturers of the automotive industry are facing a challenge of production capacity and labor requirements. The automotive industry manufacturers have also witnessed a cancellation in dealership agreements, leading to limited outlets in the regions.
Although the severity of such incidents has declined after the lockdown and vaccinations, the demand for intumescent coatings for fire proofing and spray applied fire resistive materials from different segments hasn't returned to the previous pace. Moreover, the pace at which the recovery is happening is still considered lackadaisical by many a market observer.
Impact on Supply Chain
The abrupt change in the entire supply chain process has led to a rise in overtime and expedited freight costs. As a result, many manufacturers of intumescent coatings for fire proofing and spray applied fire resistive materials face an issue of shortage of raw materials to fulfill the recovering market demand. Additionally, the restriction imposed on the supply chain has also limited the number of finished products supplied to the end-users.
In short, an economic lag is still witnessed in the supply chain of these materials, resulting in a situation that is affecting the overall revenue generation capability of the global intumescent coatings for fire proofing and spray applied fire resistive materials market.
Conclusion
The intumescent coatings for fire proofing and spray applied fire resistive materials can restrict the spread of fire and preserve the structural integrity of substrates in the event of fires. However, a slight growth experienced in the building and construction industry with rapid urbanization is slightly up-scaling the overall demand for the market.
However, several manufacturers, especially small and medium ones, face a problem of wastage of raw material with no channels for the supply of raw materials to the manufacturing units and the rapid fluctuation in raw materials prices. The disruption in the supply chain is also reducing the accessibility of products to customers. As a result, final products in the global intumescent coatings for fire proofing and spray applied fire resistive materials market are also exhibiting traces of price fluctuation even after the lockdown is lifted.
Nonetheless, the government agencies and companies are taking initiatives to cope with the current situation by increasing the working capital and providing financial support to the required ones. The regulatory policies implemented by the governments are also helping the cause of market revitalization to an extent. As a result, it is extremely apt to say that the glimmer of hope for new opportunities and growth is not lost for the global intumescent coatings for fire proofing and spray applied fire resistive materials market.
