4 questions for Javier Gimeno

05/04/2020

As the Covid-19 pandemic slowly releases its grip on that part of the world, Javier Gimeno, Senior Vice-President, CEO Asia-Pacific Region, talks to us about the post-Covid-19 feedback from China and the Group.

How is business for the Group in the Asia-Pacific region?

The region is vast and the situation varies from country to country.

Activity in China returned to 90% of its normal level in mid-April. At Saint-Gobain, all our plants have been active for several weeks, most business lines have already returned to their 2019 level and some have even exceeded expectations, including Gypsum and Life Sciences. The automotive sector is still suffering though…

In the rest of the region, our activity depends on the evolution of the epidemic and the measures taken by governments. There was no lockdown in Japan and South Korea for instance, so despite certain restrictions, life goes on almost as normal there and we have maintained our usual level of activity across both countries throughout the crisis.

The impact was also limited in Australia and New Zealand, where lockdown measures were relatively minor.

Conversely, Southeast Asian countries are now going through a difficult period, with a strict lockdown in Malaysia and Singapore and slightly less strict measures in Indonesia, Vietnam and Thailand. Fortunately, we expect a fairly strong rebound in Vietnam and Thailand in May and June.

What procedures have been put in place at the Group’s sites to enable activity to resume?

Our approach has been built around empathy and communication.

The first point to mention is that we need to prepare for the resumption of activity...which we did from the outbreak of the crisis in China, through abundant and realistic communications. It was imperative that our employees and customers fully understand what we wanted to do, how we were going to do it, and what their role would be in this project.

As in the rest of the Group, our main priority has always been the health of our employees and their families.

We implemented specific measures: stocks of masks, teleworking where possible, checking temperatures at the entrance to our sites and barrier measures around workstations and in communal areas.

The recovery was also made possible by proper maintenance of our industrial equipment, measures taken to guarantee the supply of our key raw materials and the availability of our employees, with whom we always stayed in touch.

Has this crisis so far had any impact on consumer habits?

Javier Gimeno: It is still early days, but I am already seeing several trends. Firstly, the acceleration of digital and e-commerce in countries where digital is already well established. But also the growing importance of environmental issues, and more broadly of social responsibility, in the purchasing decision…this is less determined by the brand's price and much more by its quality, performance and reputation in a broader sense.

Finally, we are seeing a return of customers to solid companies that showed empathy and social commitment during the crisis, both towards their customers and society in general. This is precisely the case with Saint-Gobain. We carried out a large number of solidarity initiatives (donation of masks and other equipment, free disinfection of sites, etc.) and responded to requests for support from the Chinese authorities.

As the pandemic subsides, what is the state of mind in Asia-Pacific?

Javier Gimeno: Here, as elsewhere, the pandemic was an unprecedented and often tragic event, which raised doubts about our social model. As business leaders, we obviously do not have answers to all these questions, but we have a duty to listen and to reassure our employees and our customers.

Of course, if the economic crisis in Europe and the rest of the world intensifies significantly and lastingly, that could have an indirect impact on our markets and our sales. But at present, 99% of what we sell in Asia-Pacific is made in Asia-Pacific and vice versa. We are therefore relatively protected.

The great lesson from this Covid-19 crisis is that anything is possible. Our company has been tested by a virus – who would have believed it?! We now need to prepare for all scenarios...while remembering that zero risk does not exist and that uncertainty is the new norm.?

But above all, I have realized what a great capacity for resilience we have. In this crisis, Saint-Gobain has proved its resilience thanks to three factors: the high quality of our teams, our values ??and an organization that favors rapid decision-making. And this should make us both proud and confident for the future.? ?