India Inc gears up to restart operations on cautious note, Retail News, ET Retail

India Inc gears up to restart operations on cautious noteBusinesses are treading cautiously on resumption of operations at plants, despite the government on Friday signalling a graded opening up and allowing offices in even red zones to work at a third of their capacity.

While companies such as Hyundai and TVS Motor are planning to restart operations with a single shift, other auto companies are expected to take more time to finalise plans. With uncertainty looming large over supply of parts and availability of labour, there is not much scope if the entire business ecosystem is not in place, company executives said.

“Even if we are able to produce, what will we do with the manufactured goods if the dealerships are not open in large numbers. We are not even sure about whether trucks will be allowed to pass through red zones into green zones to transport parts or finished products,” a senior executive at a leading two-wheeler company in the Delhi-NCR region told TOI.

With restrictions on opening shops, businesses are worried. “This will not be of significant help. Why can’t markets be allowed to open in green zones or even open periodically in orange zones?” said Sandeep Somany, vice-chairman at Hindware.

Other problem is how the norms are implemented. “Guidelines are complex and it remains to be seen how the risk profiling into green, yellow and red zones and required protocols for these different zones will actually work in practice. With so many major cities classified as red zones, the overall resumption of economic activity will be relatively limited in the near term,” said Godrej Consumer Products MD and CEO Vivek Gambhir.

“We will wait and see what happens on the demand side. Basis on this assessment, we will take a call on whether production should start immediately, or in some more time. We need to map supplier conditions, as around 60% of them were estimated to be in the red zone when we last checked,” said Naveen Soni, senior VP at Toyota Kirloskar Motors.

Hyundai Motor India vice-resident B C Datta said the company will seek permission from the Tamil Nadu government to restart a plant, which is in the red zone.

“We are awaiting the formal notification from respective state governments. Once we start, it will take a couple of weeks or a little more to get the entire supply chain going and get to normal production levels,” said TVS Motor Co joint MD Sudarshan Venu.

Major cities being in red zone is also proving to be difficult for the corporate sector as bulk of the sales come from metros. Companies are also finding it tough to find manpower for loading goods and trucks to transport consignments. “A clear interpretation of the Centre’s guidelines to permit manufacturing of relevant FMCG products is missing at the ground level,” said Dabur India ED Shahrukh Khan.

Britannia MD Varun Berry said barring West Bengal, most of its factories were operating. “In West Bengal, three-to-four factories are not operating and if we get the clearances, it will help us reach better capacity.”

“We hope that state governments would allow sale of non-essential products in standalone stores as people in red zones need them as much as people in green and orange zones,” said Arvind Mediratta, MD & CEO, Metro Cash & Carry India

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