The year 2020 was truly unlike any other. The COVID-19 pandemic took shape in the United States during the spring and affected the pump industry in many ways. More people are working from home. There are as many safety precautions as possible. The 2020 presidential election saw a change in power at the White House, as (at press time) Democrat Joe Biden was declared the winner over Republican incumbent Donald Trump.
SEPCO CEO Chris Wilder said that in March 2020 his company shifted operations considerably to comply with the Centers for Disease Control and Prevention (CDC)’s guidelines for operating during the pandemic.
“We eliminated visitors into our headquarters, limited the number of allowable entrances to the building and added sanitizing stations throughout our facility and disinfectant spray and paper towels in break rooms,” Wilder said. “That’s in addition to modified workspaces with social distancing.”
Field experts were also limited in their visits to facilities, Wilder said. This approach was likely not unique to SEPCO. Many companies experienced a decline in sales. Motion Industries president Randy Breaux confirmed that.
“Like others, [we] have been doing everything within our powers to continue to take care of our customers and employees,” Breaux said.
Companies have had to cut back on travel. Trade shows and conferences were canceled or went virtual. Sales meetings also went virtual.
“For example, we had a big sales meeting in April where all of our salespeople in North America would normally have had to travel to our headquarters,” said Glenn Wieczorek, managing director of Tsurumi America. “That would be a three-day meeting, but because of COVID-19, we had the meeting online. It was tough, but very productive and efficient, and we were able to accomplish our goals in three hours.”
In addition to power management solutions, Eaton provided face shields for medical workers to aid in personal protection along with a 4-inch touchless tool to open doors and turn on sinks.
“The challenges, both economic and personal, that our industry and society have faced in 2020 have added stress, uncertainty and urgency to our businesses,” said Eaton’s Nicole George, a product manager in pumping variable frequency drives. “My hope is that the new year tames some of the uncertainty and financial stress our economy is facing, opening up bandwidth and the appetite to tackle the infrastructure updates and industry innovation we began early in 2020.”
More than likely, 2021 will start with similar coronavirus restrictions. Let’s take a look at how some industries are dealing with the impact.
Oil & Gas
Process engineer Heinz P. Bloch, a regular Pumps & Systems contributor, estimated job losses of roughly 8% in downstream and closer to 30% in upstream and exploration.
Going forward, Bloch believes renewable energy endeavors will be taken more seriously, especially under a Biden administration.
“Science and scientists will gain a bit more respect,” Bloch said. “[We will see] a rational and well-thought-out move toward a bit more entrepreneurial thinking. [There will be] measured (albeit small) steps toward more renewable energy.
Many jobs lost in traditional oil and gas endeavors will be redirected to renewable energy and retraining of the willing and motivated will accelerate.”
Some companies are diverting resources elsewhere from oil and gas.
“With oil and gas potentially down for the next few years, we are focusing on other industrial areas for water and wastewater opportunities,” ABB’s Jeff Bergman said. “Maintenance, repair and overhaul (MRO), new construction and upgrades/updates/renovations are our target channels, and in specific business areas, we see some increase in opportunities.”
Water & Wastewater
Ingersoll Rand’s director of global product management, Stuart Moffatt, expanded on this, mentioning how oil and gas companies are losing value and how his company is developing more hydrogen technology. But, this will be the water sector’s gain.
“The water and wastewater industry is looking at expansion, particularly in developing regions,” Moffatt said. “However, the solutions in these areas seem to be smaller and less integrated than in the USA or Europe. Investments in these regions will likely prioritize local suppliers, or suppliers with local bases.
“The water and wastewater treatment market remains an area of growth as developed and developing regions seek to increase access to clean water and effective water treatment to supply their populations. 2021 will see this continue.”
But projects have still been delayed. Consultants are working remotely and not seeing suppliers, Grundfos’ Robert Montenegro said.
“And there has been a shift from capital expenditures to operational budgets to manage the day-to-day activities, which will impact the financials of the municipalities,” Montenegro added.
Gregory Junot, Sundyne’s global compressor product line manager, said the industry needs to address the combination of network demand fluctuation and multimode power generation.
“Power grids that receive renewable megawatt[s] are dependent on climatic conditions (solar, wind, hydro),” Junot said. “So traditional power plants with almost steady state output (coal and nuclear) should be increasingly supported by flexible and nonclimatic dependent sources of power generation—such as combined-cycle power generation.”
Junot also said Sundyne is seeing increasing demand for centrifugal compression in fuel gas boosting applications at cogeneration power plants, like the ones found in refineries, petrochemical plants, universities, hospitals and large industrial companies.
“In order to boost incoming gas pressures to levels required by turbines, many plants are deploying centrifugal compressors as fuel gas boosters, and we’re seeing increasing opportunities for API (American Petroleum Institute)-compliant compressors as a result,” Junot said.
Building Services & More
Uncertainty in some sub-segments has been one of the biggest impacts of the coronavirus pandemic, said Grundfos’ Greg Bretz.
“Education, healthcare and commercial office space are all examples of industries that may see long-lasting impacts due to the pandemic,” Bretz said. “The market will be reluctant to move forward too quickly until some of these questions have clearer answers.”
Grundfos’ Kirk Vigil said that his company saw a dramatic impact when things were shut down in March or April. Since then, business has seen “huge swings month over month.” Limiting travel has helped the company focus more on market opportunities, and making virtual calls have proven more effective than in-person visits.
“The term I use is the flow of order has become ‘lumpy,’ wherein buyers are attempting to leverage buying opportunities and manage lower inventories, keeping inventory risk as low as possible,” Vigil said.
Ruben Alvarez, executive vice president of sales and aftermarket at John Crane, said that demand from China already appears to have returned to pre-COVID-19 levels, and other countries in Asia, the Middle East and Latin America are showing positive signs for recovery.
“In addition, industrial verticals such as pulp and paper and food and beverage have been relatively stable, and pharmaceutical is poised to benefit from increased investment,” Alvarez said. “The positive vaccine news over the last couple of weeks is of course a reason for optimism given its significance.”
Companies are making new plans to combat the fallout of the pandemic. A successful vaccine would obviously reduce cases, but it will be hard to make up for lost revenue.
“As a company that distributes pump industry equipment and repair services, we look at the fallout from 2020 as a chance to pivot our business in 2021,” said Chris Campo, vice president of sales for Seacoast Supply, a New England distributor. “I suspect establishing relationships with new plants and end users will be a challenge as a lot of people are still only seeing essential vendors and contractors.”
SEEPEX president Mark Jones said he needs his salespeople visiting with customers face to face for the company to grow. If states push out more lockdowns, that could be challenging during the winter months.
“We already had in place very good supply chain redundancy, and we put in place strong COVID mitigation activities, so our workforce has been largely unaffected by the pandemic,” Jones said. “Our sales operation on the other hand has been affected. The lockdowns and restriction have greatly limited our outside sales group’s ability to visit our customers and partners.”
But an effective vaccine could also turn things around quickly even as companies have adjusted to a new way of doing things.
“The internet, and tools therein, have actually shown that in the pandemic, under the biggest disruption imaginable, big business can continue,” said Moffatt, Ingersoll Rand. “Development and innovation continue and even accelerate.
“In the end, people give us hope—together, we can find alternatives and new ways of coping in the current environment.”
Asma Motlani, a product manager for Eaton in the NEMA power controls and industrial controls division, anticipates an industry-continued desire to improve machine learning and expand the internet of things (IoT).
“I expect that we will see a demand for shorter lead times and quicker turnaround as projects push to make up for the time lost,” Motlani said. “In general, I foresee a heavy need for agility/flexibility as the industry recovers.”
Grundfos’ Dan Story, in the groundwater and irrigation sector, said that with the presidential election behind us, there will not be as much uncertainty.
“The hope is that things will begin to normalize in 2021, and we can travel to collaborate and build relationships in person again,” Story said.