The Coronavirus has tremendously changed the world over the past two years. It has affected our personal lives, the economy, and global industry. The plastic pipe industry is no exception. Manufacturers worldwide have adapted to this “new world” of living with the virus.
We see this “new world” and its effects in various ways starting from the purchase process to a company’s business plan.
Market adaption to remote purchases
With the pandemic interrupting the ability to travel, many companies have quickly adapted to a remote purchasing process. This means that companies have accepted the notion that they will not be able to visit the supplier, see a pipe production line tested, etc. but rather rely on trust, supplier credibility, and the wonders of Zoom, Teams, and other video conferencing services. This has also sped up the process as no travel arrangements, and coordination of schedules are needed. As travel has slowly returned, and so have trade shows, we still see that many people prefer to conduct business in this new format. Much like people have become accustomed to working from home and are not returning to working from the office full time.
Logistics & shipping challenges
Logistics and shipping have certainly taken a hit during the pandemic. Soaring shipping prices, shortages of containers, factory closures, and extended transit times contribute to persistent global supply chain problems even when the virus may be retreating regionally.
The high shipping costs have increased the landed costs of all goods. This, along with the long transit times, has sent companies to search for self-reliance. Especially companies who have historically relied on trade/import rather than manufacturing. Many pipe traders/suppliers have started looking at the option of manufacturing their own products. Mainly to reduce dependability on the global supply chain, cut costs, and increase profitability.
Supply chain problems
The unpredictability of supply times resulting from pandemic-related issues in foreign or supplier factories and the unpredictable logistics sector has again brought businesses to seek self-reliance and establish their own manufacturing solutions.
Extending product range. Once again, related to dependency on 3rd party suppliers, many companies have expanded operations and production capabilities to reduce reliance on others.
Shortage in material supply (raw material) and its soaring price due to COVID along with the weather crisis (the deep cold front in the Southern US in 2021) and now also with the Russian/Ukraine Crisis has created a “supply priority” to manufacturers. Manufacturers had to decide what to produce and who to supply, considering their limitations. In this case, manufacturers naturally choose to supply their largest clients, leaving small-scale clients scrambling for the material. With this understanding, the small/medium scale supply companies turned to the option of becoming a manufacturer for their own needs and supplying fellow small-scale operations who were unable to find products that were all purchased by large suppliers.
The desire for more domestic manufacturing
The overall effect has also changed the outlook of countries and Governments with the understanding they want to bring back domestic manufacturing. They don’t want the country to rely on outside sources to supply such important products, which would stall infrastructure development. This would include all HDPE pipes, PVC Pipes, Corrugated Pipes, Drip Irrigation Pipes and any type of pipes related to infrastructure development as well as Agriculture. The same is true for pipes in the Oil and Gas industry.
Unique opportunities in drip irrigation
In the drip Irrigation sector, along with all of the points mentioned above, two more factors increased demand.
Food Security. The pandemic has truly revealed the vulnerability of certain economies and countries and their dependency on others to supply the basic needs of their people. As we have become a global economy, we have outsourced the production of some of our most basic foods (we see this now also with the war in Ukraine). Again, lockdowns, shipping limitations, etc., have created shortages and drastic price increases that have sent governments looking for domestic alternatives.
Landscaping. With people staying home during and post-pandemic, the increased demand for the home landscape has dramatically risen. Demand for drip irrigation for home use is rising, especially in the United States.
Although we are starting to see things get back to normal, and we feel that the worst is behind us in many cases, we are still yet to see the full long-term effect of these past two years. With a US recession looking increasingly likely and capital markets drying up while many logistical issues remain unsolved, the worst may very well be ahead of us.
For some, the changes we adopted as people, companies, and countries have assisted in coming out of the crisis stronger. On the other hand, weaker economies in less developed regions of the world are still present in the battle and its consequences.
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DRTS – Leaders in Drip Irrigation & Plastic Pipe Extrusion
DRTS, based out of Izmir Turkey, remains open. Our drippers are designed in-house and our injection molding machines are working around the clock at full capacity allowing us to fill any order of pressure compensating or standard round and flat drippers. Additionally all of our machinery is fabricated in Istanbul and is ready for assembly and shipping on short notice. So, if you are looking to build a lasting relationship with a reliable manufacturer of cutting edge drippers and extrusion machinery DRTS is here to help. Contact us for a free consultation and learn how we can supply you with some of the best drippers on the market.
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