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Manufacturers fret as sudden lockdowns hit logistics of production

“Even if we want, we can’t start the plant as workers who left can’t return immediately. Our vendor's plant is facing a similar problem, so I won’t get supplies for production,” a senior official of a leading manufacturer in Karnataka said.

Written by Sandeep Singh , Aashish Aryan | New Delhi | Updated: July 18, 2020 7:27:02 am
automobile manufacturing sector, coronavirus lockdown, Lockdown impact on production, Karnataka govt, states lockdown, indian express news While Karnataka has announced a lockdown from July 14-22, Maharashtra has locked down the manufacturing hub of Pune. Bihar went into lockdown on Thursday until the end of the month. (Representational)

Around 8 pm on July 13, the Karnataka government ordered a complete lockdown from the following day, and told all industries to close. Companies including automobile manufacturers announced they were shutting; Toyota Kirloskar Motors told employees and vendors that its plant would be closed until July 22, and issued a media statement.

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But on July 14 evening, the government issued another circular — saying manufacturing industries were exempt from the lockdown. It was too late — employees of numerous manufacturing plants across the state had already left for their homes in other districts.

“Even if we want, we can’t start the plant as workers who left can’t return immediately. Our vendor’s plant is facing a similar problem, so I won’t get supplies for production,” a senior official of a leading manufacturer in Karnataka said.

“Because of the lack of clarity on the announcement of the lockdown, almost a week of production has suffered. We now plan to start production on Monday (July 20), and have informed employees and vendors,” the official said.

Sudden lockdowns, announced with very little notice by state governments, have begun to hurt industrial activity in plants located both within and outside containment zones. It is creating uncertainty for workers planning to return to work as the economy continues to reopen after multiple phases of lockdown and “unlock”.

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While Karnataka has announced a lockdown from July 14-22, Maharashtra has locked down the manufacturing hub of Pune. Bihar went into lockdown on Thursday until the end of the month.

West Bengal, Uttar Pradesh, Odisha and Assam have announced lockdowns in certain districts and cities that are seeing rising cases of novel coronavirus infection. Some of these states have industrial set-ups, others are suppliers of labour.

Naushad Forbes, co-chairman Forbes Marshall, said despite the disruptions on account of these new, localised lockdowns, the supply chain situation is better than what it was during the nationwide lockdown in March-April.

“I am told by friends in the FMCG sector that they have not been able to access their warehouses in containment zones, and so the supply chain is getting impacted. I would, however, say that since the lockdown is more localised and more temporary in nature, and manufacturing and logistics are largely permitted, things are much better,” he said.

A leading carmaker in the national capital region, which relies on suppliers across the country for the vehicles it produces, is facing difficulties due to the sudden lockdowns being ordered by state governments. Of India’s nine important auto-hub states, five are critical — Haryana, Gujarat, Maharashtra, Karnataka, and Tamil Nadu. The last three states have announced lockdowns in recent weeks.

“If any of these five states announces a lockdown, it starts hurting our production,” an official of the company said. “With states going into sudden lockdowns at different times and for different periods, our production plans are being pushed into uncertainty. Our plant is operational, but if a critical vendor is in a lockdown state, we won’t get parts for production. We are already facing that difficulty,” the official said.

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An official of a Gujarat-based automobile manufacturer said they are facing a major labour problem as migrant workers are unable to return due to new lockdowns in their states or areas. “Workers are also waiting for things to stabilise before venturing out of their villages again,” he said.

A senior official with a leading liquor manufacturer agreed. “There is a big issue of workers,” the official said. “They are reluctant to come back until there is certainty of work for the full month.”

In the case of the liquor industry, there is an additional problem, the official said. “We have to get excise permission for despatch, and if the official does not come to work on account of Covid-19 which is happening at various places, our finished product gets stuck in the plant,” he said.

A senior executive of an FMCG (fast-moving consumer goods) company in Uttar Pradesh pointed to supply chain problems arising out of the weekend restrictions ordered by the state government. “We anyway did not take orders on Sundays. Since we are now also closed on Saturdays, we take those orders on Mondays,” he said.

A manufacturer of electrical components that has factories in Bengaluru, Pune, and Kolkata, said the lockdowns announced by state governments were disrupting supplies.

“The supply disruption is coming from Pune, etc. in Maharashtra. Sometimes we do not know when the next lockdown will be announced, so you cannot be prepared either. There are problems now in Bengaluru and Kolkata, too. It’s definitely a challenge,” a top executive of the company said.

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