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Last Updated : Mar 24, 2020 11:29 AM IST | Source: Moneycontrol.com

Coronavirus pandemic| Appliance makers shut production temporarily, stare at Rs 3,000 crore loss

White goods firms were already facing production delays since January 2020 because of a shutdown in China following COVID-19. Appliance makers in India import several components from markets like China, South Korea and Indonesia.

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Appliance makers in India may have to take a Rs 3,000 crore hit due to a shutdown in production operations due to the coronavirus outbreak.

Companies like Samsung, Panasonic, Godrej Appliances, Havells, Voltas, Thomson (Super Plastronics) have halted manufacturing activities in the wake of a lockdown across the country.

India has 433 reported positive COVID-19 cases so far and there have seven deaths. Maharashtra is the worst hit with 89 positive cases of the virus being reported till Mach 23 afternoon.

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Industry estimates suggest that there will be a financial impact of almost Rs 3,000 crore due to this production halt across India. Avneet Singh Marwah, CEO of Super Plastronics said that the losses could widen if the situation does not improve by April 15.

To prevent the spread of the COVID-19 infection, companies are halting production till further notice.

A Panasonic India spokesperson said that in line with the current scenario, the company has taken a call to close production at our factories in Haryana temporarily.

"We will keep reviewing the situation for any further actions," he said.

Though some companies are announcing a temporary shutdown, it is likely that this decision could get extended depending on how the situation pans out.

Kamal Nandi, Business Head & EVP Godrej Appliances, said that that the company has decided to suspend its manufacturing operations at both factory locations in Mohali and Shirwal factories, and all operations from its offices, branches and warehouses with effect from mid night of March 22 until midnight of March 31.

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During this period, he said that all employees, trainees, contract personnel will not be required to report for work at the respective establishment of the company and stay at home to safeguard themselves, their families and the community at large.

Both the central and individual state governments like Delhi, Maharashtra, Kerala, Karnataka among others have advised companies to pay heed to the lockdown advise.

Among large listed players, Voltas said that it is following the government's mandate and has shut its factories temporarily.

Prime Minister Narendra Modi has advised all companies to not cut salaries of workers during this lockdown period. However, it is unlikely that all manufacturers will pay heed to this advice.

A production shutdown will mean that delivery of goods ordered through sales on e-commerce platforms may also get delayed.

“Thomson TV has decided to shutdown operations across the country as per govt instructions. As of now we have closed down our manufacturing units, all the other teams are working from home including CXO team,” said Marwah.

Super Plastronics is also a brand licensee for Kodak TVs in India. Marwah added that the company has closed down its manufacturing units in all 3 locations Noida, Jammu and Una until March 31.

For their corporate offices, all these companies are also providing work-from-home facilities so that the business continuity plan does not get hampered.

A Havells India official spokesperson said that abiding with the Government orders of lock-down in certain states, the company has temporarily shut down its respective offices and plant locations.

"We have instructed our plant heads to continuously access the on-ground situation and follow advisories issued by Central/State authorities," said the spokesperson.

Similarly, Crompton Greaves Consumer has informed the exchanges that the corporate office and other offices have been closed till March 31 in all locations where instructions or advisories to that effect have been issued by the state government or local authorities.

Further the manufacturing operations at the company's plants located at Anmednagar, Baroda, Baddi and Goa will stand closed till March 25. The company said that in case the government extend the date of closure, Crompton Greaves Consumer will comply.

Ever since the COVID-19 was detected in Wuhan, China in December 2019, appliance manufacturers in India have been impacted. This is because several components of white goods like air conditioners, refrigerators and televisions are imported from China.

A price hike was also implemented across product categories to deal with the shortfall of components as well as rise in customs duty.

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First Published on Mar 23, 2020 07:59 pm
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