Looking back to the end of 2019, no one could predict such a turn, which happened during the first half of 2020. After optimistic 2018 and more realistic 2019, business environment was expected to continue in 2020 the same general trend as 2019. End 2019 the signals coming from China were not understood as a foretaste of an economical earthquake.
Standing now at the end of the second quarter, we can say it was a very unusual period. Entering year 2020, Fortaco felt some optimism as regards to the market growth. Our experiences from 2019, and customers’ forecasts for 2020 built a perception of stabilization. However, a quickly spreading Corona virus changed the business environment and rapidly introduced a new reality.
During the first quarter, Fortaco factories continued with the normal production output, deliveries were not interrupted. Shortage of components from China did not impact our operations. However, the rapidly rising number of infection cases as from end Q1, and quickly spreading virus through Europe, forced most of the economies in the old continent to implement various tools for temporary lockdown, which did not left Fortaco intact.
The overall slow-down on the market influenced us mainly through the situation at end-customers. Due to the governmental regulations, issues in supply chain, and protecting of employees’ health, the most customers implemented security measures and temporary closed their operations. All this had a strong correlation with Fortaco’s operations and our production and delivery plans. Luckily, from a supply chain perspective, Fortaco did not suffer from any major shortages which could have seriously impacted our customer supplies. Thanks to common understanding, good collaboration with suppliers and partnership approach, Fortaco has managed to secure the flow of parts and modules to our customers as well as for aftermarket.
The second half of the year remains to be a big question mark. Our customers’ forecasts follow the general trend in the industry. At Fortaco, we are preparing ourselves already now for the quick reaction once volumes return. We believe, the market situation caused by the pandemic will give new opportunities for those, who are ready in proper time to support customers quickly and agile way. We Trust in Tomorrow.
I am wishing all of you safe and healthy holidays. Enjoy the summer with your families and friends, getting ready for challenges in the second half of 2020.
With best regards,
Krzysztof Michel
Senior Vice President,
Fortaco Sourcing & IT
