Coronavirus: Despite lockdown relaxations, some manufacturers await better market conditions to resume production

Many appliances and consumer durables manufacturers have decided not to resume manufacturing despite the government relaxing certain guidelines for industries to operate during coronavirus lockdown 2.0, preferring to wait till the curbs are fully lifted.

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Companies like Panasonic India, Godrej Appliances, Dixon Technologies and Super Plastronics Pvt Ltd said with retail outlets shut there is no point to start production as there is existing unsold inventory of March at warehouses and dealers.

Moreover, in certain states like Karnataka, Telangana, Tamil Nadu and some districts like Noida of Uttar Pradesh, local authorities and governments decided not to allow any manufacturing activities.

Also Read: Coronavirus India update: State-wise total number of confirmed cases

According to Panasonic India, the company would wait to start production until a favourable market condition returns.

“As our factory in Jhajhar, Haryana is in the green zone, we are engaging with the local authorities for permission to start manufacturing in the near future. The issue today is more on the demand side than supply, we have enough inventory with our distributors of our ACs and refrigerators to meet consumer demands," Panasonic India and South Asia President and CEO Manish Sharma told PTI.

The objective behind starting operations will be ensuring sustainability over longer term once markets are allowed to operate, he added.

"We are prepared for staggered operations with workers coming in batches ensuring social distancing, frequent sanitizing, usage of masks among other initiatives to protect our workforce,” Sharma explained.

Expressing similar views, Godrej Appliances Business Head and EVP Kamal Nandi said, “Where will I ship my products? There are no retail activities on the ground and moreover, there is enough stocks available with the dealers. There is no point in production at this stage.”

Nandi said Godrej Appliances would like to wait till May 3, when the lockdown ends, to plan resumption of production as under the current guidelines it has to consider many factors, including accommodating staff at the plant.

Companies like LG, Samsung, Dixon and smart phone makers Oppo and Vivo -- which have manufacturing units in industrial zones at Noida and Greater Noida -- have not resumed production as the district administration of Gautam Buddha Nagar has banned all commercial and industrial activities inside the districts.

Dixon Technologies, India's largest contract manufacture in the appliance and consumer electronic, has also not started manufacturing at its units as it is still awaiting approvals.

When asked whether the company has started its manufacturing operation, Dixon Technologies CMD Sunil Vachani said, "Not yet. We are waiting for the approvals from the Noida Authority.”

He further said, "Both of our units at Noida and Tirupati fall under red zone. So we are waiting for the approval. We are hoping it to be sooner than later."

While, Super Plastronics Pvt Ltd (SPPL), which manufactures TV under the brand name of Thomson and Kodak, said that the new guidelines should be realistic and helpful for the industry.

“Currently, we are looking forward to the new notification by the Centre and the state governments and whatever norms the government has decided we will be happy to implement," SPPL CEO Avneet Singh Marwah said.

He, however, said all "those notifications and norms should be realistic and the intention of the government should be to give permission to start the manufacturing sites".

Meanwhile, Crompton Greaves Consumer Electricals said it has partially resumed its manufacturing at its plants.

“… pursuant to the receipt of confirmation/ permission received from the concerned administrative authorities, the company has partially resumed the operations at its plants located at Goa and Vadodara in a phased manner,” the company said in a regulatory filing.

Earlier, in February and March, the Indian appliances and consumer electronics industry was battling for components as it is largely dependent on China for the sourcing of components and some of the finished goods.

According to a study by the industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) and Frost & Sullivan, the industry had a total market size of Rs 76,400 crore in 2018-19.