Brussels, Belgium – Europe's flexible foamers are starting to get back into production, but can face payment challenges, according to EuroPUR in its latest assessment of the situation.
Restrictions could become much lighter between now and the second half of May, said the association, but it is not clear how the restrictions will be eased in individual countries. This is encouraging owners of closed plants to examine how they could be re-opened. Production is likely to be low, at least initially, as companies de-stock from warehouses.
Some car-makers in Belgium, Sweden and Slovakia have restarted production, and many others set 4 May as the restart date. This has prompted a number of foam plants that serve the industry to begin preparations or restart. EuroPUR said it expects all the plant supplying automotive customers will have restarted around 4 May, albeit at much reduced capacity.
Car makers will be producing much lower levels than before, and LMC Automotive suggests that automotive production in Europe in May could be down by 75% on last year.
Companies supplying furniture and mattress sectors believe that their ramp up to full production could take some time. It will be tied to how quickly retail re-opens and people feel confident enough to buy furniture or bedding.
'We confirm our estimate that from early April that production was down this month [April] about 60-70% year on year. For May, we anticipate… production in Europe down 50-60%, with important geographical variations,' said EuroPUR.
Looking at the whole of the year, companies operating in the sector currently expect mattress and furniture production to be down 15-20% compared with 2019. But, again, EuroPUR warns there will be significant regional and national variations.
While most European countries have programmes to support temporary unemployment, defer taxes, or state-backed business loans, the picture is not consistent. There could be cashflow problems if customers delay payments, especially in countries where government support is limited.
EuroPUR surveyed more than 30 companies across the continent. This is a snapshot of its findings: