The impact of Covid-19
The COVID-19 pandemic caused a complete change in the beauty industry. Currently the crisis is unfolding and the uncertainty of what is to come makes it a major challenge for research and development departments.
Normal life is no longer available to us and business as usual is even less. The new reality is shaped by complexity and uncertainty but it also gives new opportunities.
Also raw material suppliers like GEOTECH are affected.
What is GEOTECH’s current business strategy during this crisis? We asked these questions to Harold van Haren, our Managing Director.
How are the company results over 2020?
‘As everybody will understand also for GEOTECH last year was not on budget, but the overall result was good. As a medium sized family owned business you can react fast on new market circumstances. We managed to reduce our costs in line with the decline of our sales. It is not the way you prefer to do it, but it was important to protect the company during a difficult period.’
How did the various market segments perform last year?
‘The cosmetic industry was affected heavily. In this segment our special effect pigments are mainly used in make-up products. Some of our customers lost more than half of their business. I am glad that our business is spread over several industries. In the plastic and coating & paint market our sales were down only by a few percent compared to 2019. We have the feeling that our market share for industrial pearlescent pigments increased as well. Volume wise 2020 was close to the initial target.‘
What is the actual impact of Covid-19?
‘Our IT systems are up to date. We can do a lot of the daily work from home and have daily Teams meetings together. It works, but it is not so dynamic as before.
Regarding the deliveries, the availability of some raw materials was a bit of a concern during Q4 2020 but this is in control. The main impact is now on the logistic side. With our large product portfolio we have a complex supply chain and sell our products globally. Logistic services are not as quick and reliable as before. We face delays and also the costs for transportation increased. To serve our customers we increased our stock position here in Holland to reduce the lead times. This will also be of help once the business picks up again.’
Did you develop a new business strategy?
‘Not because of the pandemic. Thanks to our long history we can survive this difficult period. The cosmetic industry is maybe the most dynamic market in which we are active, but it is also sensitive for trends. For that reason we aim to put more efforts in the other selected markets plastics, coatings & paints, printing and arts & crafts. At this moment we are preparing new sample presentations and developing new formulation guidelines for these industries. This will help us to increase the sales volumes. The capacity here in Holland is sufficient to do so.’