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COVID-19 Impact Update #2

Published: 10 March 2020

 

In our first communication dated 3 February 2020, we advised the marketplace that we would restrict supply to our existing customers only and limit orders to pre-Coronavirus forecasted demand quantities. We put this measure in place to prevent panic buying and ensure we had a policy in place that promoted a fair and equitable distribution of our stock between our customers in the event that the outbreak did not resolve itself quickly and we ended up in a position of stock shortages.

While it is positive to see the number of new cases of infection in China has significantly decreased in recent weeks, unfortunately this is not the case for other parts of the world, with countries like South Korea, Italy, Iran and Japan reporting a large increase in the number of confirmed cases. This indicates to us that world-wide demand for medical products is likely to continue to be high for some time to come, which will place additional pressures on already strained supply lines. As a result, our supply restriction will remain in place.

Multigate is committed to securing as much stock as possible for our customers during these challenging times.

Our strong relationships with manufacturers in China have enabled us to have frequent, open and honest communications with our partners, granting us as much transparency and supply priority as possible given the nature of the situation.

For the most part, our suppliers are reporting to us that the situation in China is improving, rather than getting worse. Our expectation is that if the current trend of declining new cases and increasing recovery rates in China continues, as per the current reported trend, we should see a relaxing of the quarantine measures currently in place, which will allow for a return to more normal working conditions and more predictable flow of materials and finished goods. It will also result in a switch in focus from producing product for immediate domestic use to producing stock to satisfy export demand. We are of the opinion that this may still be a few weeks away, however we believe that Multigate is in a good position to secure initial shipments of stock for our customers from our suppliers when this happens.

We would like to reassure our customers that we are constantly reviewing the situation and considering all options available to us to ensure continued supply. We have already started receiving deliveries of certain product lines from China and we expect this to improve in the near future. If you are experiencing specific pain points or you have concerns around certain product lines, please do not hesitate to discuss these with us. We have the ability, flexibility and willingness to work with our customers to put in place necessary solutions where possible, in order to help to lessen the impact of this global issue.