Coronavirus – Recovery through Regional Trade – Business-to-Business Webinar

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International Economics Consulting Ltd, in collaboration with the Regional Multidisciplinary Centre for Excellence (RMCE), organised a B2B webinar on 30 June 2020, aimed at logistics and transport operators, and suppliers and buyers of critical medical supplies, as a forum to share their experience in light of the coronavirus pandemic. The presentations and discussions covered specifically regional trade in critical medical supplies (PPE and other) for South Eastern African countries. Several challenges related to the coronavirus pandemic were highlighted by businesses during the webinar, such as the switching of production lines, impacts of logistics and transportation uncertainties on the access to inputs in their supply chains, spikes and downturns in demand, significant freight price increases, and imperfect information on market opportunities and conditions of exports. Despite these challenges, many suppliers from the region continue to engage in trade.

There was a general consensus on the need for improved marketing, consortia building for scale economies, strengthening quality standards, and addressing the logistics challenges for rapid COVID-19 recovery in the region.

The coronavirus has caused a severe economic impact on businesses. To assess the effect of the pandemic and to promote regional cooperation, a Business to Business (B2B) webinar was organised on 30 June 2020, by the Regional Multidisciplinary Centre of Excellence (RMCE), with support from the World Bank, and facilitated by International Economics Consulting Ltd. Logistics and transport operators, and suppliers and buyers of critical medical supplies, joined the online interactive event to share their experience in light of the coronavirus pandemic. The presentations and discussions covered specifically regional trade in critical medical supplies (Personal Protective Equipment (PPE) and other) for South Eastern African countries.[1]

The webinar was an opportunity for suppliers and distributors to share their experience on the impact of the coronavirus, and learn about new business opportunities. Through the session, we learnt that there are large gaps between demand and supply, where suppliers are not in contact with the buyers in the region. Participants were of the opinion that these types of forums will enable them to connect more easily to new markets. The World Bank, in this case, acts as a facilitator by offering framework contracts, allowing registered companies to become preferred suppliers to major procurement requests from countries.

Opening

The webinar was launched by Mr Prakash Hurry, Officer in Charge at RMCE, who welcomed all participants. He mentioned that this project was part of a regional programme developed by the RMCE, in order to promote trade in the region, and find solutions for countries to recover from the impact of the COVID-19 pandemic.

Unpredictable demand side conditions, information asymmetries and transport challenges

Mr Sudhir Misri, Managing Director of FTM (Mauritius) Ltd., a dealer in pharmaceutical and medical equipment in Mauritius, imports from India and other European countries. Mr Misri mentioned that the most important challenge was to get the supplies to Mauritius, in order to prevent a shortage of medicines. Another situation that he had to deal with, was enabling his employees to get to work, taking the distancing measures into consideration. He also faced various administrative and logistics issues to continue the company’s operations. He also raised some concerns regarding the reopening of the Mauritian borders to tourists, and mentioned that appropriate measures would have to be implemented to prevent a second wave in the country, which will cause a negative effect on the economy

Mr Jason Hau, from Nabridas Ltd., a Mauritian swimming pool manufacturing company, mentioned that Nabridas is a large consumer of PPE products, faced challenges in obtaining information on suppliers of PPE at competitive prices. He mentioned that it would be helpful to have a platform to share product information.

Mr Paul Baker, Chief Executive of International Economics Consulting Ltd. and Lead Programme Coordinator for the World Bank funded project on coronavirus and regional trade, talked about the demand for medical supplies and PPE in the world and in Africa which shows the demand for PPE and medical supplies in the region (figure 1). Mr Baker talked about the spike in demand for PPE during the pandemic. However, the high demand has decreased since. He mentioned that the World Bank has partnered with many countries to develop framework agreements to facilitate the procurement of PPE from registered suppliers. Registered suppliers are treated as preferred partners by the World Bank.

Figure 1 Global Demand for PPE – June 2020

Source: IEC calculations based on World Bank data

Supply responsiveness in the face of coronavirus

Mrs Maryvonne Pigeot, Sales Manager of Elite Indian Ocean Ltd., which manufactures tissue, cosmetics and boots explained that since the start of the pandemic, they have shifted towards the production of hand sanitisers. Elite Indian Ocean is the distributing arm of the group and they import a range of protective equipment, including latex gloves, goggles and gowns. They import their products from Malaysia and China. Elite Indian Ocean is prioritising local suppliers, to promote small enterprises in the region, and was keen to work with more local suppliers. She mentioned difficulties in identifying demand, particularly in other African countries.

“I hope that this platform will help us expose our products to emerging markets.”

Maryvonne Pigeot, Elite Indian Ocean Ltd.

Mr Joshua Desjardins, is Process and Environment Engineer of Omnicane Ltd., a major Mauritian firm operating in the sugar cane industry, amongst others. They started with the production of sanitisers from ethanol, a by-product of the sugar cane that they use in the production of processed sugar. The sanitisers come in different packages destined for the local market. However, the demand has decreased after an initial peak, and they are seeking new opportunities in the region.

Archemics is a local manufacturer and supplier of consumer and industrial products in Mauritius. In the wake of the COVID-19 pandemic, they started the production of hand hygiene products, including anti-bacterial hand soap, alcohol based sanitisers and surface disinfectants. They adhere to international health standards within their production facilities. They were represented by Mr Yannick de Speville, Business Development Manager, who stated that Archemics’ production capacity is approximately 100,000 litres a week. Although the demand for their products was very high at the beginning of the pandemic, it has also drastically increased after some time. They hope to explore export opportunities in the region through the programme.

Mr Jean-Noel Joly, Business Development Executive from Axelle Ltd., mentioned that his company supplies high-end garments to its clients. They switched their production from garments to masks, due to the high demand. They started production with local supplies available in Madagascar. They are now looking for export opportunities, as they have a huge production capacity. He mentioned that although the demand for protective equipment is high, he finds it difficult to be able to reach potential clients. He expects this B2B Coronavirus platform to be an excellent forum to facilitate connecting them to clients in the region.

Esquel (Mauritius) Ltd. was represented by their Assistant General Manager, Mr Joo Tey. They are a global company, with operations in Mauritius since 1978 as a manufacturer of shirts and apparels. Since the start of the pandemic, they started production of masks, which they have named DET30, since they are washable and can be used for 30 days. Since February 2020, they have supplied over 40 million masks worldwide, including to Singapore, Thailand, the United Arab Emirates and the United States of America. The DET30 is AFNOR certified. Mr Tey specified that they have a huge production capacity, and can provide their masks worldwide, if they have the necessary visibility in the markets.

Mrs Sharda Lutchmun, Office Administrator at DACOM Ltd., spoke on how the company switched from solely manufacturing cosmetics for the local tourist industry to producing hand sanitisers. However, the pandemic caused the demand to increase, pushing them to manufacture more to be able to provide to their clients. They comply with the World Health Organisation’s standards. They are looking for new markets, as the Mauritian market is saturated for the time being, although the right logistics will have to be put in place to enable export.

Managing logistics and transport challenges during COVID-19 outbreaks

COVID-19 has a serious impact on trade, logistics and transport. They are considered to be a major component in recovery efforts. The webinar included logistics providers, to provide their experience in moving goods during the lockdown and border closures.

Velogic, a Mauritian freight company was represented by Mr Neerish Chooramun, their Corporate Manager, who gave an overview on how they carried out their operations in the unique pandemic situation. Mr Chooramun specified that Velogic freed up storage space in the port area to be able to accommodate large consignments of medical supplies. Despite the flight disturbances, Velogic assisted importers by channeling supplies via Réunion island, to be delivered to Mauritius using the Dornier aircraft. Another challenge was the import of petroleum products, which was facilitated by Velogic. They ensured that deliveries of the basic and essential commodities were not hindered due to the lockdown situation.

Mr Chooramun discussed the impact of the coronavirus pandemic on logistics capacity. Figure 2 shows the different issues faced.

Figure 2 Impact on logistics capacity

Impact on logistic Capacity

Velogic also assisted companies in local deliveries, since deliveries were not straightforward due to the lockdown situation. They resorted to digital solutions, to enable communication with all stakeholders. Looking forward, Velogic foresees an e-Commerce boom linked to COVID-19, with supply chains being revamped to ensure resilience and reduce the effect on economy.

“A slowdown in economic activities is expected in the near future, where movement of goods will be restricted to specific regions.”

Neerish Chooramun, Velogic

The webinar closed with a presentation by Mr Alain Job, Managing Director at GSSA Ethiopian Airlines, who discussed the switch from passenger aircrafts into cargo planes, to be able to dispatch medical supplies within Africa. They participated in the United Nations Food Programme and helped disseminate medical supplies to countries within the region, including Mauritius and Madagascar. Ethiopian Airlines streamlined their distribution service, to allow for effective distribution of supplies.

Conclusion

The webinar favoured collaborative opportunities among participants, with a keen interest to tap into regional markets to foster COVID-19 recovery. These markets should be explored with the right logistics and B2B linkages, to foster both economic recovery and increase access to essential medical suppliers during the pandemic.

[1] Comoros, Madagascar, Malawi, Mauritius, Mozambique, Reunion, Seychelles and Zambia