The COVID-19 pandemic brought unexpected challenge to the Group during 2020. The wellbeing of our employees and contractors was prioritised and the measures that were rapidly implemented across the Group to mitigate the threat to employees and contractors were successful.
Operations in Turkey, USA and UK were granted autonomy to take the appropriate actions to satisfy local regulations and government recommended guidelines. WE Soda continues to monitor and update all COVID-19 related health and safety measures in order to adhere to all applicable local, state, federal, and international regulations and guideline and to ensure the safety of WE Soda employees.
As anticipated, the COVID-19 pandemic adversely impacted WE Soda’s results from April 2020, with adverse impacts on soda ash demand, production volumes, price per tonne, global logistics costs and supply chain being most significant during Q2 and Q3. During Q3, global supply demand balances for soda ash improved, allowing an increase in production volume, though there was still a decline during Q3 2020 relative to Q3 2019. By Q4, all our production plants were operating at full capacity with strong demand and improved soda ash pricing returning to the market, albeit still below pre-COVID-19 levels.
The cost advantages which natural soda ash production and solution mining enjoy over synthetically produced soda ash have been critical for our relative financial performance during 2020. The residual impacts of COVID-19 from 2020 that will continue to impact our business in the future include:
(i) extended customer sales terms, impacting our working capital; and
(ii) depressed prices which are expected to continue into 2021 but recover during 2022.
Management remains confident that, in the medium and long term, global demand for soda ash will continue to grow, prices will strengthen and WE Soda will be able to profitably deliver its produced volumes into its targeted markets.
This statement is extracted from WE Soda Limited Annual Accounts 2020.
© 2021 WE Soda Ltd, 23 College Hill, London EC4R 2RP. All Rights Reserved. Company No: 10264457 Registered in England & Wales