Lockdown: Industry finding it tough to resume operations despite relaxations

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Published: April 24, 2020 1:50 AM

The country’s largest FMCG major Hindustan Unilever said that most of its factories, distribution centres and suppliers are operating at less than their full capacities.

The industry, which is still limping back to normalcy, is less than satisfied.

Three days after the lockdown was partially lifted, companies across sectors — automobile, steel, FMCG, textiles, consumer electronics and durables — are finding it hard to get their operations back on track. However, business at non-banking finance companies (NBFCs) and construction work in infrastructure projects is slowly coming back on track.

Auto clusters in the NCR region (Gurgaon and Greater Noida), Tamil Nadu (Sriperumbudur), and Maharashtra (Chakan-Talegaon-Ranjangaon) are yet to resume operations as the lockdown continues in the regions. Consumer goods and steel companies are functioning with scaled down capacities, while supply chain disruptions continue.

The country’s largest FMCG major Hindustan Unilever said that most of its factories, distribution centres and suppliers are operating at less than their full capacities.

The company continues to face local or state restrictions in the movement of its people working in the essential goods supply chain. “We have moved to larger order sizes and direct shipping from factories to compensate, but this is far from efficient,” a spokesperson at HUL said.

The government has clarified that penal action against the companies will be taken only if negligence is proven in terms of safety precautions to prevent spread of Covid-19 at workplaces. However, the industry, which is still limping back to normalcy, is less than satisfied.

Sunil Kataria, CEO (India & SAARC), Godrej Consumer Products said that the scale up of operations is gradual considering strict adherence to safety and social distancing norms. “We are also in the process of seeking permissions to run more factories in line with the new guidelines and are hopeful that this will help in the production ramp up and improve the supply of essential items over the next few weeks,” Kataria said.

Textile major Arvind said that it is awaiting permissions to resume work in Gujarat plants, while its factory in Bengaluru is currently making personal protective equipments (PPE) for the healthcare workers. According to Punit Lalbhai, executive director, Arvind Ltd, the company has had to re-develop supply chain from domestic sources as majority of supply chain for raw materials for PPEs is based in China and there was difficulty in importing from there due to shortage of materials.

Mobile phone manufacturing units are also yet to start operations as they are awaiting permission from local authorities, while consumer durables will wait till full supply chain is resumed. According to Indian Cellular & Electronics Association (ICEA) chairman Pankaj Mohindroo, it will take time to gear up, but the mobile phone companies will restart manufacturing once necessary permissions come in.

Consumer Electronics and Appliances Manufacturers Association (CEAMA) president Kamal Nandi said most brands had enough stocks in their warehouses as well as with trade partners, so and he does not think manufacturing activity will start in a big way.

Meanwhile, Ashok Leyland has got permission to run its plants in Rajasthan, Uttarakhand and Maharashtra. NV Balachandar, president (HR, communication and CSR), Ashok Leyland, said, “The Ashok Leyland plants at Alwar, Bhandara and Pantnagar have received permission from the relevant government authorities to resume operations. We are currently working out the supply chain readiness post which we will resume operations and commence production in line with demand.”

However, in sectors like NBFCs there has been slight uptick in business activity. Umesh Revankar, managing director and CEO, Shriram Transport Finance, said that customers’ visits to branches for services had slowly increased. “Our customers feedback has been positive and we hope to get back to normalcy very soon,” Revankar said.

Similarly, construction work has begun in a limited manner on some metro and power transmission projects. KEC International managing director & CEO Vimal Kejriwal said transmission and distribution projects have started at various places in India, while railway electrification work has also started in Maharashtra between Tuesday and Wednesday. “We are doing four metro projects, the one in Kochi has got approval for starting the construction activity, but the three projects in Delhi are stuck due to complete lockdown,” Kejriwal said.

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