Covid-19: The lead battery world — industry views across the crisis

Covid-19: The lead battery world — industry views across the crisis

Covid-19: The lead battery world — industry views across the crisis 150 150 Batteries International

Lead battery demand — ‘deferred, not destroyed’

March 27, 2020: Unprecedented. Unforeseen. And totally unwelcome. That’s been the world reaction to the arrival and spread of the Covid-19 virus. Now officially classed a pandemic, the coronavirus has ravaged its way across the world’s economies. China began to lift its lockdown this week, and as it did so, lead battery making businesses there began climbing towards pre-virus levels.

Meanwhile the rest of the world has continued, or begun, locking up.

East Penn, the second largest battery manufacturer in the US, was part of a mandatory shut-down on March 19, as a so-called “non-life-sustaining businesses” across the state.

But on March 23 — after an appeal by the company —a waiver was approved, effectively classifying East Penn as a life-sustaining business. This allowed the firm to return to work and operate at around 50% of normal staffing levels.

East Penn said: “There is no timeline for recalling employees back to work. This is due to the fact that order levels will vary based on the unpredictability of the Covid-19 pandemic, government mandates and our ability to keep our employees safe in the work environment.”

This level of unpredictability has been matched in Europe. One leading CEO of a major lead battery manufacturer told Batteries International: “The problem for all of us at this time is that governments’ approaches are hard to gauge.

“We need to make sales projections for us to set the right production levels. And it’s highly difficult to make those given that we are at the mercy of the vagaries of government decision-making.”

Contrary signals abound. US president Trump has said he wants the country to be “opened up and just raring to go by Easter [two weeks away]”, while his own government’s health experts are expecting a peak in fatalities at around the same time, if not by the end of April.

Informed discussion has verged on the cautious, the consensus of thinking being that the pandemic could not be halted but it could be delayed to allow over-stretched public health resources to cope.

In China, however, positive signs — if all are to be believed — have emerged.

Hubei Province, where the Covid-19 coronavirus originated, has begun to let its people outside, and the Shanghai Metals Market reported on March 11 that all lead-acid producers in China, even Hubei’s Camel, were re-open and recording operating rates of 70%.

One thing that is certain, however, is that the world economy has received an enormous blow. The short-term impact — largely viewed as inevitable by economists — is that GDP growth will falter or contract in the months ahead, not unlike the 2008 financial crisis, from which western economies took almost a decade to recover.

In the lead-acid battery world, the medium to long-term picture appears to be solid, with many market analysts still predicting strong growth.

Farid Ahmed, principal analyst, lead markets with Wood Mackenzie, said demand would be deferred, but not destroyed. “Replacement batteries will be needed, just a little later than expected due to people staying at home and not driving the miles,” he said.

“OE batteries are obviously suffering while the auto plants are stalled, and there is likely to be some reluctance from many prospective buyers about investing in a new car. But on the flipside, they’re going to keep the old banger running and will have to replace the battery in that.”

See Ahmed’s fuller prediction here.

Lead battery industry leaders have come forward with messages of optimism, and even support for their competitors. They were all unanimous on one thing – the industry will bounce back from this.
This is what they said:

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“We’ll get back from this with a renewed sense of thanks for what our lives are”
Sorfin Yoshimura CEO, Scott Fink

I’m in New York City, although our office is in the suburbs. We are praying this ends quickly, with minimal loss for folks, and get back to some degree of normalcy within the next eight to 12 weeks. And we’ll get back with a renewed sense of thanks for what our lives are — we should all take a pause and look at what we have and what we do. At Sorfin Yoshimura we’re keeping things going provided we have anything to keep going.

As a service provider we have to be reactive and that’s both our biggest asset and our biggest liability —when our vendors, machine makers and material makers don’t produce we have nothing to sell. when battery makers aren’t producing they have nothing to buy from us. It’s not in our control.
But what is in our control is trying to do as much as possible to be a resource for battery makers, to show that different resources for different materials and consumables are available in different areas. We can identify where the supply lines are and we will try to help cultivate dual sources or give multiple sourcing options to keep their shelves as robust as possible.
We are also looking at freight rates, which are continuing to climb around the world, and trying to find affordable freight lanes that are still operating in this environment and pass that data along to our customers. We’ve seen similar trends in countries as China and South Korea, where it began — when each country first gets locked down, everything but the first level of business, ie food and medicine, is locked down.
But we’ve seen our customers petitioning governments to stay open and they are getting back to work as essential businesses. It’s not full operation, obviously some people aren’t located near their areas and they can’t travel, so they can’t get 100% manpower, maybe 25%-50%, which means their productivity is going to be drastically reduced. But we are seeing them get the authorizations to be able to produce again and that’s encouraging in the short and long term — if this continues.
The battery business is essential to the world as we know it so we will all heave a sigh of relief when at some point these battery makers will be back to work and be able to function as back-up support. They are essential, our customers will also be working so this will re-start probably more quickly than most other industries. From the SLI perspective, new cars are always a natural hedge because as the new car reduction reduces, typically the replacement market increases —and batteries go into old cars —so even in the SLI space you do see a natural hedge that will protect demand to some extent.
In the industrial space I believe there will be more of an essential need for stationary batteries – it’s a demand deferred type of pattern and it’s not going to be destroyed. We are thus far maintaining our entire staff at full pay and we will try to do that around the world as best as possible.
Personally, I think the world has been moving too fast. This virus is a sign that the world must slow down and regain perspective of the most important things in life. We are grateful for our families, for all the love, for our homes which keep us safe, and for our industry at large that keeps us fed.

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“The types of decisions we have needed to make are unprecedented for our company”
East Penn CEO and president, Chris Pruitt

I would like to start off by saying that these have been times like no other. The types of decisions that East Penn needed to make, in the timeframe that we needed to make them, are unprecedented for our company and our great employees. But we are not alone; this is something that the entire world has never seen.

Our first concern is the health and safety of our employees in our facilities. And it is also important for our customers that we are able to maintain a certain volume of production to support their critical services. We are so grateful for those employees who are able to work in our facilities during the crisis while implementing our social distancing practices.
We support many operations and infrastructure critical to our nation, such as transportation for all vehicles including emergency and delivery vehicles, communications, disaster recovery, medical equipment, home mobility, cellular and data networks, food industries and other vital supply chain support, energy reliability and cyber security, among others.
After this crisis, lead batteries will still be needed. And with past history on our side, I would foresee a positive future for the lead battery and recycling industry.

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“Long term there will be no problem with demand”
Leoch CEO, Dong Li

The lead battery manufacturing business will not be destroyed by the Corvid-19 virus because it’s too important an industry. Long term there will be no problem with demand. The problem, for the moment, is with our factories in India which shut down the factories two days ago.

They plan to open them again in 15 days, they claim. We also have operations in Vietnam but their capacity is very low. In China we are back up to manufacturing levels of some 75% of pre-virus production and we may get back to normal in April/May — but we have to listen to the government and collaborate with their policies.
For us we let them do their job and look after public health. We need to be strict with our people, we don’t want anybody out of our sight. At the factory, we have special rules for eating — everyone has to face the same way, we don’t provide bowls and chopsticks anymore — they must bring their own, and always wear masks. The lead industry already has masks so they can use these masks at home.
Workers need to tell us their health condition and temperature, as well as if they get a cough or have any other symptoms. They need to let us know where they go every day. I came back to China before the government shut the border. Then, people from eight countries were forced into quarantine but now everybody coming from abroad is. The stricter governments are, the sooner factories can get back to full operation.

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“We are an essential industry that should remain in operation”
EUROBAT executive director, Rene Schroeder

We need to appreciate the important role batteries play in keeping vital services running safely.

The battery industry needs to be qualified as a critical manufacturing or essential industry that should remain in operation — on an appropriately modified basis — to provide the products and services that enable the continued operation of critical life-saving infrastructure and services.
The industry has already implemented stringent health and safety measures for employees such as social distancing, and requiring office workers to telecommute. Our staff are already trained in proper hygiene and subject to mandatory washing procedures.

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“We are focused on keeping our manufacturing plants running”
Exide Technologies CEO, chairman and president, Tim Vargo

At Exide Technologies and our GBN Industrial Power division, we are all in this together to keep the world powering forward during the pandemic.

The health and safety of our employees during this time remains our top priority; the lead battery industry already has high standards in place to protect employees on the job every day, and this is even more important in today’s environment. As for our business outlook, right now we are focused on keeping our manufacturing plants running to support our customers and we are working closely with our suppliers to ensure we have the necessary components to continue battery production. In the US, the federal government has classified our business as essential and all of our plants are fully operational at this time. In Europe, our business is also being recognized as essential.
While we have had some plant closures there, we are continuing product distribution from most locations on most days. As we weather the storm together I would like to thank all of our employees who are committed to making the batteries that are critical to the infrastructures supporting the food industry, public safety, healthcare, data centres, military and materials handling, which are on the frontlines of this health crisis.

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“The crisis highlights the critical role of lead batteries”
Advanced Battery Concepts CEO, Ed Shaffer

The international response to curtailing the spread of Covid-19 highlights the critical role that lead batteries play in our global community’s fight against this pandemic.

From ensuring emergency vehicles start to reliable back-up power for our medical facilities, lead batteries are needed more than ever. The disruption in our supply chains due to Covid-19 also shows the importance of every geography having the ability to manufacture vital energy storage batteries and the circular economy of lead ensures that every geography or country can supply itself. As Covid-19 fades, ABC believes that countries all over the world will realize even more the importance of energy storage supply security and how well positioned lead batteries are to meet that need.

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“It’s times like these that resilience is checked”
Microporous CEO, Jean-Luc Koch

What an earth-shattering and humbling series of events! Just a few weeks ago, the west wasn’t too concerned about what was happening in China or Korea, and then… Italy took a major hit, opening the eyes of other countries earlier, and likely preventing them from a similar tragedy.

As Asia is slowly coming back, the rest of the world has entered unprecedented lockdowns and economic paralysis. The Microporous management team has done a terrific, pro-active job in setting, very quickly, drastic health and safety measures both in Austria and in Tennessee. Thanks to our dedicated workforce and our strategic partners and suppliers, we continue to support 100% of our customers’ demand, despite all logistical challenges.
It is in times of crisis that resilience of organizations and teams can be checked. I’m so proud of the demonstration of our employees’ dedication and commitment. Our industry has seen crisis situations before: once again, the lead-acid battery industry will demonstrate the essential role it plays in the global economy and maintain key infrastructures, its reliability and adaptability, and will come out even stronger from the Covid-19 crisis. Our deepest thoughts of sympathy go out to all our friends in Italy.

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“Batteries are a primary commodity so I’m confident business will recover fast”
OM Impianti co-owner, Melissa Maggioni

Our government in Italy is trying to smooth the virus spread and progressive measures have been taken in the last few weeks. OMI is supporting customers remotely, as we have been used to doing for a long time.

We are trying to ensure we have shipments of spares and consumable parts, but couriers are progressively reducing their services, in Italy and abroad. I’m receiving messages from many customers all over the world supporting us at this moment, conscious that this is a global problem, no longer just Chinese or Italian.
Now we need to focus on containing the spread and protecting our old and sick people. Batteries are a primary commodity so I’m confident that this business will recover fast, after the emergency. We hope our customers will be far-sighted and continue their investment in new technologies.

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“Today’s crisis reinforces the importance of faster, reliable networks”
EnerSys president and CEO, David Shaffer

EnerSys will continue to provide critical products, systems and services to key industries such as food distribution, health care, military, utilities, telecom and broadband and many others where demand is expected to remain.

In fact, the significant increase in “working from home” and content streaming trends of recent weeks only reinforces the importance of faster, more reliable networks that EnerSys will continue to support in the future.

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“We are standing firm on core values to keep our operations going”
ENTEK International CEO Larry Keith

ENTEK stands firm on its core values.  As we face the global Covid-19 pandemic, we are reminded daily that our values of respect, commitment, integrity and innovation will bring us through this time as a stronger company. We are committed to our employees, vendors and customers.

We continue to operate all manufacturing locations and are working closely with our employees, suppliers and local governments so that we can provide continuity of supply to our customers.
We have contingency plans in place and are blessed to have an outstanding team of employees committed to supporting our operations globally as we implement new procedures and preventive measures to keep everyone safe.
We respect the guidelines for social distancing and commit to doing our part to flatten the curve. We have taken steps to provide a safe work environment for our employees and vendors in compliance with CDC, WHO, and local social distancing guidance. Our steps help us ensure that we will be able to provide ongoing service and support from our manufacturing sites in America, Europe and Asia.
We will continue to provide honest transparent communication and act with integrity with our employees, their families, our vendors and our customers through this time.  It has never been more important to be communicating with each other as we all work together to come through this global crisis.
We are a company of innovation.  We continue to daily employ this value as we engineer new ways to separate people, keep our shipping lines open, maintain inventories of both raw materials and finished goods, and continue our R&D initiatives to develop the best battery separator products in the world.

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“Ensuring the supply of lead batteries for critical applications”
Wirtz vice president of sales and technology, Doug Lambert

Despite the current difficulties affecting our daily life in every corner of our world today, the worldwide offices and staff of Wirtz Group of Companies are continuing to function and are committed to provide the best possible support to all our customers.

With the various travel and operating restrictions in the global market, we at WIRTZ appreciate our role as an essential supplier in the energy storage market. We are operating with a partial team in place for manufacturing, to ensure we still support our customers with their tooling, spare parts and equipment needs and provide the safest possible workplace for our employees.
Fortunately, much of our newer equipment is equipped with eWON communication, which enables our technicians to link in remotely to troubleshoot and/or upgrade process software. Where we cannot travel, we are aailable through video conferences and equipment online connections to ensure we support our customers’ needs.
The sales (equipment, and tooling), technical service, and spare parts departments in US, India and China, along with all our regional sales teams and myself, are here to support you.
We at Wirtz hope that you, your family, friends and work colleagues will all continue to remain safe and healthy while we continue to work through this challenge.

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“The target is to save lives; can anything be more important?”
Inbatec managing director Christian Papmahl

The crisis is hitting everyone hard. Our thoughts are with the people most affected by the virus. We are happy about the decisions taken by our government and we are strictly following new rules that we have never had before.

The target is now to save lives; can anything be more important than that? Stay at home! Communication is nevertheless right now most important in these days to keep everyone’s heads up. Stay@home —but stay connected!   

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“We will make all necessary efforts to recover from possible delays”
Engitec proposal manager, Daniele Silla

The new Italian DPCM, dated March 22, introduced urgent measures for the containment of the epidemiological emergency from Covid-19.

These restrictive measures imposed, on all national territory, the lock-down of all non-crucial activities until April 3. This restriction will inevitably have a severe impact for the entire Italian supply-chain, however Engitec was ready to take these restrictive measures, as it has been working remotely for the past two weeks.
The internal organization was aimed at minimizing the negative impact on ongoing projects. Engineering activity is continuing normally, and we are doing our best to keep to expected time schedules.
The shut-down of all the production workshops might cause some delays in the manufacturing of the equipment and the purchase of materials.
Being confident of getting back to normality soon, Engitec will make all necessary efforts to recover from possible delays caused by this difficult and unpredictable situation.
Engitec has also established an internal dedicated task force that has the scope to continuously monitor the situation and, when possible, mitigate the negative impact on customers.

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“The testing they’re doing in Thailand is vital for industry as a whole”
Mark Stevenson

I’m currently in isolation in Melbourne, Australia following months of work at a lead operation in Thailand.

At the moment it’s still a wait-and-see situation – people are still working very hard and conscientiously. But what they’re doing in Thailand is vital for industry as a whole – they’re testing everyone, every day, all the time. When you arrive at the plant, then around 1pm they’re being tested again. If anyone’s temperature is high they get tested again and sent home from site. They are taking it incredibly seriously and some overseas visitors are not allowed onsite unless they can prove they have undergone a quarantine period.
At Suvarnabhumi airport all the hotels around it are measuring everyone that enters, in the airport and again on the plane, my temperature was tested and recorded. Unfortunately arriving in Australia there was no such check and all we were given was a form to fill out so the government can check we undertook our own quarantine.

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“We have been able to quickly reorganize company activity”
STC commercial director Alberto Bergamaschini

STC is still working hard to keep all the current projects on track.

In the general disaster caused by this dramatic situation, apart from two projects in Italy that have been temporarily suspended, we have been relatively lucky as all our other current projects were in a phase that allows us to continue our activities.
The new projects are in the design phase and, because of its modern organization, STC management was able to quickly reorganize company activity, enabling our team to work remotely, thus respecting the new directives enforced by the national authorities to ensure and preserve the health and safety of everyone.
Video conferences and Skype for business allow the commercial team and project managers to remain in contact with customers and potential customers.
Unfortunately we stopped construction activities in our workshop and the R&D activities in our laboratory are frozen, but our researchers are always working and looking for more efficient and eco-friendly ways to solve some of the critical issues of the lead industry.

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“Battery makers are an essential category in this outbreak”
Daramic vice president and MD, Global Sales, Dawn Heng

Daramic’s focus is to make sure our employees all around the world are safe, especially during this difficult period. Daramic’s global footprint, with operations deliberately located around the world, is a strategic benefit in times like this because we can adjust supply between our facilities to meet our customers’ needs.

From the industry point of view, I would think it is even more critical for batteries as providing back-up power for those critical vehicles, devices, facilities, etc, and to get through these difficulties. And this is why battery makers are classified as an essential category in this outbreak.

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“It’s vital the lead industry is able to support critical activities”
ILA managing director, Andy Bush

We’re working closely with our members to support their efforts to ensure business continuity within the parameters of the current crisis. Our industry supports essential manufacturing activity —in particular the lead battery business—so it is important we do all we can to maintain production, while ensuring we protect employees in the workplace.

Lead batteries provide essential back up for hospitals, telecoms and other key services and it’s vital the lead industry is able to support these critical activities. We also want to ensure that lead battery recycling continues with minimum disruption, within appropriate parameters, to ensure there isn’t a build-up of spent batteries which creates its own challenges.

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“We are confident strong measures will allow normal operations”
Sovema Group

To ensure our employees’ safety, Sovema Group  is keeping operations going by smart working (engineering, sales and service teams are fully equipped to work from their homes), staying in constant contact with our customers around the world to work both on current and future projects.  

The general situation is certainly serious not just in Italy but worldwide. However, we are confident that the strong measures undertaken will allow us to resume normal operations soon, as is already happening in China. We should be aware that the general slowdown the world is facing could be an opportunity to focus with more engagement on strategic plans for the next few years.
Sovema Group is by nature a partner for medium and long-term projects, so we can support in laying the foundations of the future at this critical time.