Coronavirus lockdown 2.0: Lock-in to be firms’ smart re-start plan

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Updated: Apr 14, 2020 12:41 PM

Most manufacturing firms plan to either transport a small batch of workers or make them reside in the premises

The company has made all preparations to start operations and has made arrangements for housing workers at the production premises. (Representative image)The company has made all preparations to start operations and has made arrangements for housing workers at the production premises. (Representative image)

India Inc is preparing for a life after lockdown in the form of a lock-in. Depending upon what the prime minister spells out in his address on Tuesday morning, various manufacturing companies where production got stopped between March 22-25, have drawn up measures to re-start production on a low-scale from April 15.

The options before them are two-fold – either keep the workers in their premises or transport them to work and back home. Most companies FE spoke to said that it would be a combination of the two but transportation will be a preferred option as housing on premises has its limitations and cannot be continued for long.

RC Bhargava, chairman Maruti Suzuki said, “It depends what the government decides but transportation is a much better option for us. At Maruti, we have some 25,000 workers spread over Gurgaon and Manesar belt and all of them cannot be housed in the premises. But since production won’t be at full capacity, and we need to maintain social distancing, we don’t need all the workers back at one go. In the beginning production would be minimal, at 50% or less. At least, something is better than nothing.”

Industry sources said that companies like Hyundai Motor India, Hero MotoCorp, Mahindra and Mahindra, and Tata Motors have similar strategies in place. Industry sources said that in the initial stages focus will be on finishing the production chains which got stuck in the middle. Large-scale production of passenger vehicles, for instance, does not make sense because for that to happen even retail showrooms need to function, which is unlikely to happen soon.

In a company like Tata Motors which manufactures both, passenger vehicle and commercial vehicle, the focus will be on the latter because of its essential nature.

Steel manufacturing firms are better placed than auto manufacturers as steel has been categorised in the essential services category. Though firms like JSW Steel had stopped production since March 25, they have drawn up plans to re-start operations from April 15. The company has made all preparations to start operations and has made arrangements for housing workers at the production premises. “Almost 50-70% of the workers have been arranged for production to start from April 15 and trucks and passes for transportation etc have been arranged,” sources said.

“JSW Steel is making all preparations to recommence operations at all locations,” a company spokesperson said. JSW Steel has four blast furnaces and two corex in Karnataka Ballari; one furnace in Dolvi plant, Maharashtra, and one under construction.

For FMCG companies like Dabur or HUL total stoppage in production had never taken place and depending upon fresh guidelines from the government, they will scale up their production and beef up their supply chain, which is a bigger problem for them.

“We appreciate the efforts of the government which have helped is easing the movement of trucks, enabling us to commence production of essential goods and hygiene products. But the situation is far from normal as companies are still facing difficulties in smooth functioning of the entire supply chain, both in servicing domestic demand and meeting export commitments. Limited availability of manpower is still hurting the industry significantly,” Dabur India, executive director – operations, Shahrukh Khan said.

“Over the last few days, we have been ramping up production of essential items, but this ramp up is at a reduced capacity so that we adhere to the safety and social distancing norms. Our factories are at 20-25% production levels and that too for essential items; 60-70% of our depots are open and about 25-30% distributors have the permission to operate. The big challenge is labour shortage,” Vivek Gambhir, managing director and CEO of Godrej Consumer Products, told FE recently in an interview.

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