“The COVID will impact by continuing to reduce demand for aluminium which might still put more pressure on AL price,” Eloise Harvey, President of Mecfor

Mecfor supplies and manufactures specialized equipment for heavy industry for primary aluminium smelters and secondary plants, mining, rail and nuclear.  Its customer-centric approach as well as its production capacity allow for a great flexibility of adaptation. They operate from Quebec Canada and supplies to many plants in North America and other parts of the world. Eloise Harvey, President of Mecfor, has shared how COVID-19 pandemic has impacted its business and the global aluminium value chain.

Here is an excerpt from the interview:

AlCircle:  What are your initial thoughts about the impact of Covid-19 on the global aluminium value chain? 

Eloise Harvey: Due to the pandemic, some smelters have curtailed their production, some others have shutdown facilities (e.g.: Alcoa Intalco Works). Despite these measures, market will be off balanced by plants increasing their capacity and other that are restarting their operations (e.g.: ABI) in North America but also worldwide causing an oversupply.

The LME price is low and the COVID will impact by continuing to reduce demand for aluminium which might still put more pressure on AL price. Since the fixed costs of the primary smelters, such as energy, remain the same and the LME price is low, there is a lot of pressure on the cash flow of the various smelters. We are seeing a lot of halted CAPEX for the remaining of 2020 and our clients (the primary smelters) are saying that they might be hit harder in 3 to 6 months.

AlCircle: How much has this pandemic impacted your business?

Eloise Harvey: In Quebec, dictated by the government, there has been a one-month shutdown of most equipment manufacturers’ operations. Many of them have maintained essential services (parts and emergency service) to smelters that remained active. Most will reopen their activities within the next month. As for us, we had some on-going projects with Alcoa USA. Thanks to its client’s supportive letter requesting that we continue working on their projects to quicken delivery, Mecfor has resumed its activities on May 4th following the authorisation of the government. On the other hand, our parts business has been affected for the past month. We anticipate a drop in our sales volume associated with the aluminium sector over the next year.

AlCircle: What’s your current assessment of the Covid-19 impact on “Country” aluminium industry?

Eloise Harvey: The three big companies (Alcoa, Rio Tinto and Alouette) are reducing/halting investments. Most of the Canadian aluminium is exported to the USA and we do not have a clear view of the COVID situation in the USA for the moment. We are unsure about how hard it will impact the economy over there and therefore the Canadian producers.

AlCircle: How different do you think the world would be in a post-covid scenario?

Eloise Harvey: The economy will be in turmoil for quite some time. There will also be a trend to buy locally and we will see the countries closing onto themselves and trying to become more self-sufficient.

AlCircle: Do you foresee any changes in the way you reach out to your customers now?

Eloise Harvey: With the emerging trend of buying local and becoming more self-sufficient nation wise, I foresee a challenge for multinationals such as aluminium producers’ that over the last years have centralized their procurement. International travels and tradeshows will embrace new constraints. We may have more local salespeople instead of staff from our head office travelling the world. Digital campaign that optimizes social networks and putting upfront more and more web-based applications and videoconferencing will become new standards. Maybe selling solutions through 3D animation, videos, and virtual tours of facilities; bringing virtual experience to the next level in an industry like ours.

AlCircle: Have you developed/implemented any mitigation plans and strategies to minimize the impact of COVID-19 on operations?

Eloise Harvey: We are ready to start our operations on May 4th with the approval of the Quebec government. All our measures are in place. HR department is managing a compliant sanitary plan that will apply not only to employees, but also to stakeholders involved in our chain of supply. We have three fabrication floors at Mecfor, and this enables us to keep social distancing at all time for our fabrication team. All employees that can work from home will be encouraged to do so.

AlCircle: How COVID-19 changes the outlook for 2020 for the aluminium industry?

Eloise Harvey: Honestly, it was supposed to be our best year ever and we should maintain a satisfactory year in 2020. We are more concerned about 2021…One thing is sure, Mecfor will remain close to its clients and will continue to offer proven equipment solutions. Our team will continue doing what we know best: designing and manufacturing equipment to help our customers in their day-to-day operations.