Manufacturing sector is feeling the heat, already

Falling attendance in factories due to a surge in cases and mandatory Covid testing requirement, coupled with the fear of a hard lockdown has hit production the automotive and manufacturing sectors in Maharashtra by atleast 10%.Manufacturing at some auto component facilities has dropped to as much as 50-60% of normal levels. But executives at FMCG companies said they have not experienced manpower shortages as of now and are functioning at full capacity, even as some feel production might get impacted in a week or so.Sudhir Mehta, lead and coordinator, Pune Platform for Covid-19 Response and president of Mahratta Chamber of Commerce Industries and Agriculture, attributed the fall in attendance to the ‘irrational circular’ of the state health department in Maharashtra stipulating compulsory testing. Pune has an inadequate testing infrastructure that can manage between 30,000 to 50,000 testings daily, and regular testing of all employees is difficult. The mandate for compulsory testing for employees will put further pressure on the already stressed diagnostics network in the city. 82058948Maharashtra (Pune, Aurangabad and Nashik) accounts for 10-13% of the total passenger vehicle, two-wheelers and commercial vehicles sold in India. But it accounts for a higher share of India’s manufacturing GDP. The uncertainty regarding a complete lockdown has scared migrant workers. About 10% of the migrant workforce from SMEs has left the western India hub and it may affect major automakers if the government were to enforce a complete lockdown.OEMs have told suppliers to maintain 5-15 days of inventory at the plant level, but weak links could disrupt supply chain if local lockdown is imposed for more than five days.Arvind Goel, CEO, Tata Autocomp, said if the industry is shut in Maharashtra, it will have national ramifications. Even a week to 10 days long shut down can potentially take three months to recover.“There are many circulars that have come out in the last two weeks and RT-PCR test every 15 days is not practical. There has to be clarity and people should be made aware in advance. If they (state government) decide to shut down and the manufacturing sector is also part of it, the economic consequences are going to be bad,” warned Goel.A lockdown will bad especially for the MSME sector. “A shutdown may put them out of business unless the state government supports them financially,” an executive requesting anonymity said.The rising number of cases is a source of concern. “ Pretty soon we will be having similar situations in hospitals across the city — not just for testing but for beds as well. The situation is not good,” claimed another executive, highlighting the alarming situation on ground zero.Executives at manufacturing companies such as Parle Products, Amul, ITC, Bisleri, Dabur and Emami are monitoring the situation in Maharashtra especially to deal with the shortage of the workforce in plants, though they are not facing labour shortages so far.“We have stepped up vigilance in terms of testing and other protocols such as increased sanitising in trucks for transportation, though so far, we have not faced outages in terms of workforce. We have also reduced the workforce reporting to work by half, by rotation, in Maharashtra in select functions in a way that doesn’t hamper manufacturing,” said Angelo George, chief executive, Bisleri International.

from Economic Times https://ift.tt/3th0xzT
via IFTTT