IT hardware company expect to resume partial production this week, 100% next month

By: |
May 3, 2020 9:38 PM

The central and some state governments have issued notification to allow manufacturing of IT hardware, including mobile phones, and even allowing movement of staff with some restriction from May 4.

Uttar Pradesh accounts for more than 60 per cent of total mobile phones produced in the country.Uttar Pradesh accounts for more than 60 per cent of total mobile phones produced in the country.

Electronics manufacturers expect to resume partial production this week and full capacity by end of next month if there is no change in guidelines from the government, according to senior company officials.

The central and some state governments have issued notification to allow manufacturing of IT hardware, including mobile phones, and even allowing movement of staff with some restriction from May 4.

Most of the companies, who did not wish to be named, were waiting for order from local authorities in Uttar Pradesh before making announcement on starting manufacturing.

Uttar Pradesh accounts for more than 60 per cent of total mobile phones produced in the country.

According to industry sources, if companies located in Greater Noida, which falls in red zone, get permission to resume manufacturing then most of the mobile phone companies, including Vivo, Oppo and others, will be able to start operations at 30-40 per cent of their capacity by the end of next week.

“Home Ministry order has been very clear on movement of goods. It brings big relief for the manufacturers. Karnataka has come out with very clear instructions along with standard operating procedures. Andhra Pradesh has also issued permission for manufacturing activities. Production is expected to resume in these states. We are waiting for more clarity from other states,” India Cellular and Electronics Association Chairman Pankaj Mohindroo told PTI.

MAIT CEO George Paul said most of the companies like iPhone maker Wistron, Flex, Sahasra Electronics and others are ready to resume production.

“All of our members expect to resume production this week. First two weeks in most of the companies will go in housekeeping, inventory cleaning and production planning and then get in to full production. Permission is of operating with 50 per cent staff which means 50 per cent production capacity can be resumed,” Paul said.

He said that companies will have to pay salaries of 50 per cent who are on standby, therefore everyone would like to resume 100 per cent production as quickly as they can.

“The restoration of production is result of extensive consultation between government and industry bodies like us. Companies have applied for ESI scheme which provides for compensation of salaries. If it is approved then it will save industry from heavy losses,” Paul said.

Electronic contract manufacturer Dixon Technologies chairman and managing director Sunil Vachani said about 10 days back it started operations at Dehradun plant and it has received permission to start production at plant located in Tirupati.

“We expect to reach 30 per cent of manufacturing activity this month and 100 per cent by end of next month if there is no change in guidelines from the government,” Vachani said.

Members of two industry associations that are ready for resuming production activity but are apprehensive about execution of order at ground level.

“We have been facing problem in movement employees. The local authorities keep changing rules which is not uniformly communicated to police at check post and to the industry. This needs to be addressed across all the states. Otherwise, we see no issue in resuming production,” said an Electronic Manufacturing Services (EMS) company official located in a southern state.

The EMS official said that big companies are expected to recover soon once they start operations, however, medium and small enterprises supplying components in the sector have been hit hard and will need handholding for coming back to the normal.

Sahasra Electronics managing director Amrit Manwani said the company will resume production from Monday with less then 50 staff because there is provision to ensure test of employees for COVID-19 which may take some time.

The company will start focusing on production of electronics required for essential medical equipments like ventilators etc initially for export purpose.

“We will gradually ramp up once all the arrangements as per the guidelines are made,” Manwani said.

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