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The Impact of COVID-19 on the Chemicals Industry

Coronavirus has taken over the world and its impact on the chemical sector has been noxious. Apart from human toll, coronavirus has shattered and shaken many beliefs, value chains, and customer behaviors. It has affected the world physically, socially, and economically. The industrial activities have been halted, supply chains have been disrupted, laborers facing the risk of getting infected, government restricting the movement are all enough to understand that the chemical sector is one of the biggest victims of coronavirus. All the sectors are facing the impact of coronavirus but the manufacturing sectors like the chemical industry are more deeply affected due to the disrupted supply chain.  

The chemical industry is the backbone of industrialization and development. It contributes about 7% of the total GDP employing around 2 million people. And Chemical production has seen a decline of 3% globally as an effect of coronavirus. 

Challenges faced by chemical industries due to COVID-19

Crisis Management

  • The companies are facing low demand, less productivity, supply chain disruption leading to an uneven supply of products. The workers risking their health and restrictions on the credit market is another issue. 
  • Many activities that can not be done remotely require on-site labor participation. Taking into consideration the nature of the industry it is very difficult to follow social distancing in places that are densely populated with workers.
  • Some products like household and personal health are in heavy demand whereas manufacturers of products like automotive and industrial products are under heavy losses. 


  • The workforce has a constant threat of getting infected by the virus and is risking their health just to fulfill the demand of the industries.
  • This industry has a bulk of workers and hence faces the problem of social distancing. The plants were ordered to work with 50% of the employee capacity.
  • Due to reduced workers, the productivity of the plant was reduced because of which the production was not enough to satisfy the needs of the market.

Supply Chain and Operations

  • The supply chain of the chemical sector has been strongly dependent on China for many decades which is majorly affected due to the pandemic.  
  • Along with the problem of obtaining raw materials, constantly disrupting the supply chain is also causing a hurdle in supplying the finished products to customers on time.


  • Disruption may lead to many financial disclosure implications to the companies in the region which are hit hard by the pandemic 
  • The productivity is very low due to the health condition of the workers which is even more challenging during quarterly filings.
  • The industry was asked to pay full wages to employees working at half capacity. It was tough for them to bear the loss as they knew no business should be expected for a few more months.

Steps to Consider

  • Analyzing how profitability, cash flow, loans, credit can help us with the ongoing low-revenue operations 
  • Keep a check on your employees health and spread awareness of the current scenario. Check upon the sanitation facility, make some obligatory rules like always wearing a mask when at work, taking off if not in good health, and also mobility policies to encourage working remotely. Make flexible work arrangements.
  • Keep assessing your supply chains and identify the weak ones – which are most affected by the pandemic. 
  • Going for automation solutions and reducing the number of workers in plants. Companies should start exploring the piloted solutions. 
  • Take efforts in improving the supply chain like diversifying the supply base, keeping conversation with key suppliers, keeping alternative transportation and supply routes so that it’s easier to tackle problems. Go for a digital supply chain to have transparency. The digital supply chain is replacing the manual pen and paperwork with digital data and process support using electronic technologies to every aspect of the end-to-end Supply Chain.
  • Analyzing current scenarios like how ongoing situations may affect your recent and future estimates of financial reporting. 
  • Building strong communication with stakeholders and lenders to avoid any last-hour hustle. 
  • List and prepare some plans that the government would support- from emergency funding to tax incentives.

A new reality for the global chemical sector

Some of the Covid-19 induced customer behaviours have become the new reality due to which the demand patterns have also become quite dynamic. The pandemic has enkindled a change in how people used to live, think and buy. 


The chemical industry is lagging far behind compared to many other industries when it comes to digitalization. Nevertheless, this pandemic has shown us all the power that digitalization holds. It makes working remotely and remote operations of plant control systems possible. Companies are expecting new strategies to increase efficiency and adoption of technologies like artificial intelligence (AI), machine learning (ML), robotic process automation (RPA).

Suman Chemical is one of the very few chemical companies that are taking efforts and making its place in the race of digitalization.

De-globalisation and Supply Chain Localization

The United States and China are not on good terms; aggravated by the pandemic situation, this has raised the question of globalization. 

It is said that the industry must go where its customers go. Some companies are shifting their manufacturing sites to serve the customers of Japan, Korea, Asia, etc. In coming years the supply chain strategy will have a major impact on the success of the company because the health concern will lead to risk mitigation, delay in delivery, etc.


The chemical sector has been working towards sustainability for many years. However, during the pandemic, 79% of the customers mentioned they will be using products that are eco-friendly and healthier. Also, they are ready to pay a high price for these goods. 

There is also a better awareness regarding health and a great desire for comfort which can be exemplified by increasing online shopping. Due to these changes in consumer behavior, the manufacturers of sanitation products or certain plastics used in packaging and PPE, personal care, lubricants, nutritious products, etc are heavily benefited.

COVID 19 precautions

How did Suman Chemical Industries Combat COVID-19?

To come to terms with the COVID-19 pandemic, Suman Chemical Industries  took immediate actions to grab the unique opportunities from the challenges faced and oriented the company towards the new trends that would persist in a post-covid-19 world. 

  • At Suman Chemical Industries, we believe it is our responsibility to ensure maximum safety for our people and adopt safe, healthy, and environmentally responsible business practices. We took care of all our employees and provided them with all the medical facilities during these tough times. 
  • We tried to clinch the benefits from the government stimulus package to ensure a stable economy, circular social impact, and security of supply of essential goods.    
  • Suman chemical is accelerating at a much higher pace into the world of digitalization to ensure convenience to our workers and customers. Adopting the new trend of contactless technologies, driven by social distancing.
  • Strengthening the local network with suppliers, consumers, and the public for a better understanding of the current scenario. 
  • Virtualization of workers by following the trend of workers working remotely adapting to the new business model.

The world is yet to recover from the coronavirus and the challenges will continue, we need to take into consideration how the chemical industry will recover and what steps are to be taken to adapt to this new normal world of living with COVID-19 and working towards a better post covid-19 world. Now is the time to show how the planet and people are the only drivers of business by improved services and technology. 

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