6
BRIEFING CORONAVIRUS CRISIS
Words Jo Francis
Will business as usual return
when the lockdown is lifted?
IIndustry leaders give their views on the impact of the virus and life after lockdown t’s been intriguing in a way
to understand your business
when things suddenly
stop.” This observation
comes from the long-standing
CEO of a large printing
company who has furloughed
70% of his staff –
amounting to hundreds of people
– after seeing much of his usual
business simply fall away, due to
the curbs on everyday activities as
the government attempts to control
the Covid-19 pandemic here
in the UK.
While demand for some, but
not all, packaging and labels print
has held up reasonably well –
understandable due to the spike
in demand for certain products,
for commercial printers the picture
is of a more or less universal
collapse in demand.
The BPIF’s first industry impact
survey on the effects of the economic
lockdown, carried out from
23 March to 6 April, found that a
staggering 74% of respondents
had reported a “considerable
downturn” in order levels, while
the average change in order levels
from the usual monthly level was
a reduction of 65%.
Performance data gathered by
Heidelberg from thousands of
presses worldwide also details
that during April, activity at UK
commercial printers crashed to
the most serious impact level,
classified as “severe impact: multiple
print shops stop production
completely” and with productivity
expected to drop to below 40% of
normal levels.
At the first of its new weekly
webinar series, BPIF regional
director Dawn Reid pointed out
that every crisis has a beginning, a
middle and an end. She says the
federation has defined three
phases of the situation for the
industry as: “Survive, Recover,
Revive.”
Many business leaders will
understandably consider their
Printweek April & May 2020
companies to be in survival mode
at present, although some are
reporting signs of life as customers
start thinking about post-lockdown
plans. “Clients are starting
to wake up a bit,” reports one boss.
It’s no surprise that much effort
is currently going into scenario
planning for business life
post-lockdown.
“I’ve been thinking about what
I am going to need to bring back
into production in terms of equipment,
and also what I will need in
terms of people to run it,” muses
one boss. “I’m also wondering
what the competitive landscape
is going to look like on the other
side of this. Who will still be
standing?”
Bishops Printers managing
director Gareth Roberts says he
realised how serious the coronavirus
situation was becoming in
early March. “I was on a boys’ ski
trip to St Anton and on the second
day, the resort closed and we were
all ejected.”
Business levels are now about
70% down at the Portsmouth
printer, with a corresponding
number of staff furloughed.
“People know us for our football
programmes, but so much of
the other work we print is also
related to events or public gatherings,”
he says.
“I’ve been warning staff not to
expect things can be switched
back on and for business to return
to 100%.”
Roberts says he is now anticipating
a more gradual recovery
spanning “probably something
close to 12 months”.
“It would not surprise me if we
are heading towards Christmas
with 70% of the turnover we
might have otherwise expected,”
he adds.
“We are navigating scenarios
where all the normal ratios are
different and shifting at the same
time. All I want to do is make sure
the business is positioned to cope
with the gentler slope of recovery.”
The government was poised to
release a series of papers in the
week beginning 4 May that will
outline its approach on how to
safely and gradually restart the
economy, which will be crucial to
how the printing industry recovers
– also crucial will be how the
government manages to end
business support measures,
particularly the Coronavirus Job
Retention Scheme (JRS) without
a “hard stop”.
Some sort of tapering arrangement
is widely expected to be
announced during May.
BPIF chief executive Charles
Jarrold says the federation held a
roundtable with officials from the
Department for Business, Energy
& Industrial Strategy (BEIS)
toward the end of April, as part
of its regular discussions and
communications with the
department.
“Attendees highlighted their
experiences and concerns across a
number of topics: the Job
Retention Scheme need for flexibility,
this would make it more
useful to many companies. The
challenges in getting approvals for
CBILS loans. Credit insurance –
tightening coverage, which may
present a particular problem as
activity levels recover,” he says.
“What we especially wanted to
highlight is the need to ensure the
support schemes, especially the
Job Retention Scheme, aren’t
brought to a sudden halt. Activity
levels will take time to recover, so
the support schemes need to be
phased in lockstep with this.
Companies want to retain staff,
but if the support schemes end too
early, they will not be able to do
this,” Jarrold adds.
“The JRS has definitely avoided
mass job losses. But companies
are under really intense pressure
and using up their cash reserves. If
the scheme is ended too quickly,
firms may not be able to pay for
redundancies, so there would be
business failures.”
As this issue of Printweek went
to press, the BPIF had just finished
gathering responses to a
follow-up survey that will detail
the industry’s response to the
package of government measures
designed to help companies ride
out the crisis.
And, as the old adage goes,
never let a good crisis go to waste.
As our print CEO said at the
beginning of this piece, company
directors will now know the ins
and outs of their businesses in
minute detail.
All of those “what if” disaster
planning scenarios have become
an actuality for many companies.
How businesses are coping, and
how they plot a course out of the
other side of the crisis, when it
comes, is likely to be pivotal to the
future for many firms.
And the ability to actually
“pivot”, as seen at the many firms
that have switched operations
into manufacturing PPE materials
such as visors and aprons, has also
proved notable.
Decisions that would usually
take weeks or months have been
made in days or hours. And we’ve
all been forced into new ways of
working that will have implications
for how companies of all
shapes and sizes are run in the
future.
I’ve been warning staff not to
expect things can be switched
back on and for business to return
to 100%” Gareth Roberts Bishops Printers