While so far the effects have been limited, Bufab anticipates a more significant coronavirus impact on trading in Q2 following more extensive countermeasures implemented by local authorities throughout Europe, North America and Asia.
Bufab said its priorities were to protect health, protect customers and protect Bufab.
In Asia, the impact of coronavirus countermeasures were seen during January and February. However, despite strict government regulations in China and Singapore as well as throughout Southeast Asia, Bufab was able to fulfil priorities in Asia.
In Europe, some Bufab customers have recently announced factory closures, largely due to supply chain disruptions and illness among staff, and mainly affecting businesses in the automotive industry. Bufab has a very diversified customer base across many industries, most of which are as yet less affected than the automotive industry. So far, closures are expected to end mid-April, but changes in the external situation may of course influence this timetable, said Bufab.
In North America, some states have implemented lock-downs, for instance California where Bufab has a large subsidiary. This has impacted sales and operations starting this week. However, Bufab is also seeing how customers are restarting essential operations under various exemptions. Bufab is operating, invoicing, and keeping customers supplied in all branches in North America, but with reduced staff and capacity.
In a statement, Bufab said: "We are expecting an impact on sales and orders at least during April, and it is currently difficult to say how long it will last. However, Bufab’s operations are stable, we are getting deliveries from suppliers worldwide, and are able to deliver to customers in all countries.
"In order to protect Bufab, we are focusing on keeping our customers, keeping our team, keeping healthy financial results, and keeping our values intact. Action is being taken in all subsidiaries impacted. Most subsidiaries are already implementing short-time work schemes according to the rules in each country. In this, we are helped by the various government schemes now being put in place. This will make it possible to reduce cost to meet a potential fall in demand. As communicated earlier, we are also accelerating existing cost savings programmes, and the Board has decided to withdraw the earlier dividend proposal."
Bufab’s CEO and Executive Management Team have implemented a voluntary reduction of fixed salary by 10% while these actions are in place. Many subsidiary managing directors and other senior managers have followed this example.
Jörgen Rosengren, Bufab’s President and CEO, added: "This is a difficult period for everyone. Bufab’s primary concern is keeping our staff and partners healthy and safe. We will then focus on continued uninterrupted supply to all customers worldwide. Naturally, we also have to take sometimes tough measures to reduce cost. It is very encouraging to see how the whole Bufab team contributes to these priorities. I’d like to take this opportunity to thank all team members for their excellent work and dedication in these tough times."
Elsewhere in the fastener business, SFS has revealed it is temporarily downscaling some operations during the coronavirus disruption.
Like Bufab, Travis Perkins is expecting a more significant COVID-19 related impact on business in the coming months.
