Covid-19 in Perú

How the industry is coping with the Covid-19 crisis in Peru

The challenges of the new pandemic

• The spread of Covid 19 has derailed the global economy and Peru is no exception where a state of emergency has been declared and several moving parts of the economy have been stalled.
• The measures to control Covid 19 and the subsequent shutdown of several industries would deeply impact the sectors of commerce, fishing, tourism, mining and hydrocarbons, according to the study of the Peruvian Institute of Economy (IPE - Instituto Peruano de Economía, 2020).
• The Peruvian government will facilitate a credit line of US$ 9.5 billion to the small, medium and small enterprises at an average rate of 10% and in addition will also provide about US$ 100 (380 soles) to people who earn less than $450 per month.

We at EMA Partners Peru spoke to several senior executives associated with the following sectors and have compiled their views on the current situation and how they would cope with the disruption.

Mining Sector

Aim for speed over elegance

• The mining sector does not expect a significant drop in overall income but the Covid situation has imposed additional costs on the business. The industry has a unique challenge of ‘change in guard’ and hence the need for quick infection testing due to rotation of personnel in mining sites.

• From a demand perspective, the industry does not foresee a dramatic shift at this moment but the overall situation will be evident in the third and fourth quarter of the year.

Healthcare & Pharma sector

Importance of companies owning their narrative

Narratives are powerful ways to acknowledge the fears that naturally surface in times of crisis but at the same time not losing sight of the opportunities that are in store if stakeholders come together and commit to rising above the challenges that come in the way.

“Their main challenge was the safety and well-being of their people while they continue to support the national cause and the government and continue to produce essential drugs and maintain supplies to reach the end customer through a variety of channels. This is essential to ensure that their customers feel safe and derive hope at the time of a grave crisis.”

The industry is adapting to new rules and operating conditions and are hopeful of anticipating and adapting quickly to the emerging situation.

Manufacturing, Chemicals & Agro Industries

Purpose cultivates engaged employees

Companies are quickly moving to maintain open and ongoing lines of communication with their customers on the impact of Covid-19 to business and the emergency actions implemented. When companies are centered on a legitimate purpose, employees feel that their work has meaning.

• Being essential sectors serving the economy, chemicals and fertilizers continue to work despite several challenges concerning availability and safety of personnel, supply chain & transportion limitations and cost escalations. Further, the companies continue to support at least 10% of the employees who are on the rolls but unable to attend work. The situation will be clear going forward since some of these businesses operate with a credit cycle of 120 days.

• The broader manufacturing sector which includes non-essential goods are deeply impacted due to emergency measures. Companies are challenged by reduced operating cashflows and productivity and have looked at reduction of headcount and salaries in the short term.

• Companies that are challenged in their core businesses are seeking alternate lines of businesses to augment their revenues.

Telecom Sector

Recommendations for “social distancing” have led organizations to expand their operations in the virtual, digital sphere and has been net positive for the sector.

The telecom sector has indeed benefitted due to increased usage of data across various platforms. However, some key concerns remain because of practical challenges in serving customers for their new installations.

State Agency of Recruitment and Training

The era for digital capabilities

Companies realize that digital capabilities needed to be implemented across the entire organization.

The state agency was well prepared for the work from home protocols which were rolled out quite seamlessly as they had already initiated a digital transformation exercise earlier in the year. They had their information secure in the cloud and their VPNs were in place. This helped the agency and its staff to transition to home office environment quite rapidly.