On 22 October 2020, the Institute for Foreign Affairs and Trade (IFAT) hosted an online roundtable discussion with the title Global and regional supply chains amid the COVID-19 pandemic. Mr. Barna Erdélyi, chief executive officer of Waberer’s International Plc., Mr. Prem Ojha, head of commercial at Apollo Tyres (Hungary) Ltd. and Mr. Csaba Moldicz, head of research at the Oriental Business and Innovation Center, University of Applied Sciences were participating as panellists.
Mr. Prem Ojha explained that the Hungarian production site purchased raw materials from Europe, therefore the collapse of the supply from China had not affected the plant. At the same time there were delays, however they managed to avoid putting the production at standstill. Mr. Barna Erdélyi pointed out that the pandemic and the spring lockdown affected sectors and markets to a different extent. In March and April 40-50% of the company’s market practically disappeared. According to his experience, the recovery was quite fast, with the exception of the automotive industry. In Europe roughly 20% of transportation capacity literally disappeared due to bankruptcy situations, so in certain regions there is a shortage of trucks to serve the clients’ needs. In his perspective, currently it’s time to wait and see what the normalised level of market demand will be. Mr. Csaba Moldicz highlighted that the shock caused by the pandemic was exacerbated by geopolitical tensions between the USA and China. It is hard to estimate the damage as we still do not see the whole picture in terms of the economic effects of the pandemic.
Panellists agreed on that Central and Eastern Europe may have a chance to attract investments relocated from Asia and China, however this will not happen quickly. The crisis does not modify the basics of supply chain operations at once, changes happen gradually. Mr. Csaba Moldicz emphasized that for a number of Western companies it is still reasonable to manufacture in China, partly because it is an attractive market, and partly because many foreign companies operate in cluster-like structures in China and cooperates closely with numerous Chinese small and medium-sized enterprises. The relocation of such a network would be very difficult. Regarding the future of supply chains, Mr. Barna Erdélyi underlined that for now companies have to survive current turbulences and will be able to see the basis of long-term operations only afterwards. Mr. Prem Ojha pointed out that Europe can benefit from the relocation of activities of high added value. and the adoption of advanced technologies.
Altogether panellists agreed on that for the time being it is not realistic to give general answers regarding the presence and the future of regional and global supply chains.
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