Cyril Giraud: “Crisis times can also open new opportunities“
5 questions to Cyril Giraud, our Senior Vice President of the Performance Minerals APAC Business Area and a member of Imerys Executive Committee.
Cyril joined Imerys in 1998, after a career in venture capital. At Imerys, he has held various positions in Strategy & Development, Finance & Control, and Project Management in several European and Asian markets. In 2014, Cyril was appointed General Manager of the Carbonates division in Europe, Middle East and Africa. He became SVP for the Business Area (BA) Performance Minerals APAC in November 2018 and has been based in Shanghai since January 2019.
1. How have you managed the Covid-19 crisis for your geographies?
In the first instance, we were quick to set up several crisis committees to manage the situation as it evolved. The first was held at a national level in China, bringing together all the Imerys BAs with Chinese exposure (Refractory Abrasives & Construction, Performance Minerals APAC, and High-Temperature Solutions). As the crisis began to spread beyond China, I decided to replicate this committee at the BA level to ensure business continuity and information monitoring and sharing.
Collecting proper information and feedback and considering various inputs such as production capacity, client needs and governmental measures was essential in order to make the right decisions fast.
Our priority has always been ensuring the safety of our teams and preventing infection in any of our 35 sites. That’s why we put in place various awareness and monitoring procedures to minimize the risk of illness. So far, we have had no cases of Covid-19 within our BA, which for us is a great victory!
Finally, since I am based in Shanghai, I was also able to share my on-the-ground experience with the other members of the Executive Committee.
2. What is the specificity of your BA and how is it managed in the exceptional Covid-19 situation?
Given our geographical footprint, we have felt the impacts of the crisis in waves. China represents about 20% of our business, so we were first affected in mid-January. The rest of the business felt the impact later – Malaysia, India and New Zealand in particular. Our activities in Graphite & Carbon in Europe (Switzerland notably) and Canada followed a little after. This wave-like pattern allowed us to anticipate to a certain extent what was going to happen, thanks to the feedback of our plant and hub managers and our Chinese colleagues, who quickly shared best practices.
3. What are the impacts on your markets?
All our major markets have been affected, in particular some of our end markets such as Ceramics or Automotive. The Automotive market in China decreased by 50% in the first quarter of 2020 compared to 2019. This negatively impacted our sales, for instance to the plastics for the automotive industry, or to the producers of Li-ion batteries, where we are the leader for the supply of Graphite and Carbon Black.
We have also felt a geographical impact, as in countries where the lockdown has been very strict, the local economy is severely affected. A good example is India, where our 10 plants have been closed for several weeks. Even as we speak, some of these plants remain idle, waiting for our customers to resume their own production.
However, some of our products have actually experienced strong demand, as they are necessary to produce essential items such as latex gloves or non-surgical gowns. In many cases, maintaining our operations has allowed us to serve our customers while helping to fight Covid-19. This critical production has to some extent compensated for the negative effects observed in other markets and is a good illustration of how Imerys’ exposure to multiple end markets allows us to be resilient even in difficult times.
4. What will the consequences of this unprecedented crisis be?
I see this crisis as opening up new ways of working. We have proven that it is possible to adapt so that we can continue to operate, either at the plant level with the appropriate protocols or at the office level through remote working. Most of our employees have been affected in some way, often both in their personal and professional lives and overall, they have adapted extremely well. Personally, I experienced a strict lockdown and complete isolation for 2 weeks, having been sent to a Chinese confinement centre because a person infected with the virus was on my flight back to China…
An important consequence is that we are having to work actively to preserve our profitability and cash as much as possible – which will be critical if we want to emerge quickly and effectively from the crisis. We are working with all our teams—in the plants and in the offices—to define and implement the necessary actions to achieve this goal.
This crisis is also forcing us to reconsider our range of options and the way we approach the future.
We now know that things can change dramatically in terms of business. Going forward, our criteria for investment decisions will consider new parameters - I am referring to the emerging debate about supply chains as a result of this crisis. The APAC region will be concerned primarily, as it is an important hub for manufacturing outsourcing. We are already seeing some clients consider a change of approach in Asia in order to smooth out their supply chain risks.
In addition, new opportunities will open up for us as certain markets become more attractive – in particular the Healthcare market, with the surge in demand I mentioned earlier regarding latex gloves and medical garments becoming a structural trend.
5. What are your BA’s future prospects?
There are signs indicating that we could be at the “beginning of the end” of the crisis. A few sites remain closed and some markets aren’t showing good prospects, as some customers are still facing difficulties. However, the situation is more stable, and the panic is fading away. Broadly speaking, I think we will emerge from the crisis region by region, with Asia and Oceania first, Europe second and then the US – the recovery will be gradual.
As you know, we are beginning to see some return to normality in China, which is promising for recovery; but there remain doubts regarding exports, which drive part of the Chinese activity. Currently one of our most impacted markets is Ceramics, in particular, because exports to Europe are decreasing. So, although there is indeed a partial rebound effect in China, it is far from compensating for the initial downturn, and other countries like India or Japan are not yet showing the same dynamics.
More generally speaking, I see the situation as a good opportunity to revisit our strategic priorities of reinforcing our growth in the coming years. We need to be prepared to identify and seize opportunities (both commercial and industrial) in this new context.
A few words to conclude
This crisis has allowed us to forge a stronger bond with some of our customers. We are facing these difficult times together, doing our best to provide them with solutions and avoiding supply disruptions. These ties will open new doors in the future, as customers remember how we supported them.
Despite the forced remote working conditions, we have maintained our internal cohesion and our teams are still working together successfully. I would like to thank all our colleagues who have once again demonstrated not only their incredible sense of responsibility but also their empathy for one another!