Revenues of electronics components firm fall as lockdown restrains demand
By Jenina P. Ibañez, Reporter
ELECTRONICS components company RS Components Corp. saw its revenues halved during the lockdown, an effect of lower demand from manufacturing companies cutting production as they lose customers.
“It’s a snowball effect,” RS Components Philippines General Manager George R. Santiago said in an interview on Wednesday.
The company’s clients consist mostly of multinational and local manufacturers, where it provides industrial maintenance, operations, and repair products as well as electronics.
These manufacturers, Mr. Santiago said, have been struggling with decreased product demand that lowered their production rate.
They also limited their on-site work force and saw slower movement of goods due to checkpoints and restrictions.
“Shipment of finished products were hampered and also shipment movement of raw materials were also affected,” Mr. Santiago said.
But RS Components returned to 85% of its pre-lockdown performance in July after restrictions were eased.
The company expects 2021 revenues to grow from its 2019 performance. Mr. Santiago said the company had been growing in double digits in the five years to 2019.
The growth, he said, will be largely caused by manufacturing companies resuming their delayed projects.
“Some of our customers, because of the pandemic, (have) put off their projects — expansions, additional production lines — because they are now focusing on buying only the essentials. But come next year, we expect demand to also start to pick up so they would continue with their planned expansion.”
RS Components also anticipates higher demand in automation and digital solutions products in the coming years.
Mr. Santiago said that the company has been responding to more inquiries on automation tools that could help companies check customer temperatures and count the number of people in a space without human intervention.
He said that automation was previously not prioritized by companies because labor in the Philippines is cheaper than the cost of the technologies.
“Because of this pandemic, companies now have realized that even the manpower caused a disruption in the operations, and there’s more demand now for automating whatever process they could automate.”
The company has also been seeing more inquiries for its digital solutions automating the procurement process.
