Covid-19, part 2 | Looking to the future

In the second of his blog series, WINFRIED SCHALLER, Group CEO of Lincotek, looks at the position of the market in relation to the recent coronavirus shock and talks about the investments his company has been making in the US market specifically.

October 1, 2020 | Part 2

After a period in which hospitals stopped non-urgent interventions to face the Covid crisis, elective surgeries are re-started, although the situation is so fast-moving and quite different depending on region.

Across the board, our customers tell us about the unprecedented halt in their business that they saw in early Q2. At almost no other time in the modern era have they experienced demand drop essentially to zero.  The challenges that this created on both cash flows and product management have been equally difficult to predict and control, especially as local government in different areas continually changes the regulations around elective procedures.  Cashflow is obviously a key issue in this crisis, and governments need to keep the companies afloat.

While some larger OEMs have sizeable cash balances to help them manage through situations like these, other mid-tier and startup OEMs have been challenged to keep things moving and are seeing products stack up on the shelf.

To the biggest extent, we are looking at a demand recovery by Q4-2020 or latest Q1-2021. Unemployment will certainly play a role in demand. But from China, we can see demand is picking up rapidly. Yes, there are some hiccups, but I guess what we see there will be similar to what is going to happen in Europe and North America.

The focus of all our customers is obviously on maintaining the supply chains and our resources are being diverted in that direction. We are looking at creative ways to support our customers, especially in the development of new devices and instruments, to be ready to confront the needs of the markets in the future.

I want to focus a little on the major strides we’ve been making in the US market, following the former CoorsTek Medical acquisition.

The past year has been about creating an ever-more seamless service for our customers. We have integrated our offer with a true ‘concept to launch’ business model. And we are more than satisfied with our progress. We have made significant investments in technology in our US plants with a capital program aimed at a complete capability upgrade over the next few years.

We have been busy maximizing efficiencies and have completed the installation of a state-of-the-art finishing line to be coupled with our casting operations, while also adding some of the latest technologies at our machining facilities.  Our challenge over the next six months will be balancing the investments we have made with the resources required to validate the processes quickly to best meet the needs of our customers.

In addition to our expanded service offerings, we have also set the stage for a future as a valued global partner to our customers. To make this goal a reality, we need to invest not only in the US, but also in Europe and Asia.

 

To be continued…