Cement makers resumed production in a phased manner on Monday while steelmakers began to prepare for a gradual increase in production. Automakers haven’t resumed and neither have smartphone makers. Critically, most construction sites are still silent. Some are awaiting greater clarity and, in some instances, approvals from state governments before restarting operations. Others are located in hot spots and can’t restart.

The global pandemic had brought economic activity to a standstill in India and abroad, with governments enforcing a lockdown restricting people from stepping out of their homes, except for workers employed in essential services.

PM Narendra Modi extended a countrywide lockdown through May 3 . The Centre allowed some sectors to open up from April 20, but left it to states to approve resumption on a case-by-case basis.

India’s largest cement company UltraTech Cement told stock exchanges that it had restarted a few production facilities. Steelmakers such as JSW Steel, Tata Steel and JSPL also resumed operations in a phased manner.

Focus on Exports

This was mainly to cater to overseas buyers initially, before Indian customers return to place orders in the market.

UltraTech confirmed that operations at some of the company’s locations are being “partially resumed”. Holcimheld Ambuja Cements said it’s seeking “necessary approvals” from the relevant authorities for “resumption of operations at various locations in a phased manner”.

CONSUMER GOODS

With 170 districts declared as red zones or hotspots due to the spread of infections, large consumer goods companies making essentials said manufacturing operations are at a standstill in these locations. They called on the government to allow at least the making of essentials to resume.

Dabur India, maker of Real juice and Vatika shampoo, said while recent guidelines issued by the ministry of home affairs will definitely help ease the situation, the forced closure of some factories of suppliers have halted manufacturing of essentials. “The forced closure of some factories of suppliers — who are mainly MSMEs — for key products like hand sanitisers, as they fall within the hotspot radius, is affecting smooth functioning of the supply chain,” said Dabur India director, operations, Shahrukh Khan. “It is our request that companies that do not have any instances of Covid cases may be permitted to operate even if they fall within the radius of a hotspot, provided they adopt and implement all safety and social distancing norms.”

In West Bengal, snack manufacturing plants of companies such as PepsiCo, Britannia and ITC are not operating, leading to a shortage of such items not only in the state but also in the Northeast, an industry executive said. “Our Baddi plant is still closed and not being allowed to operate. This is impacting supplies of packaging material across the supply chain for all our partners,” said Vimal Kedia, chairman of packaging company Manjushree Technopack, which caters to multiple consumer goods companies such as Reckitt Benckiser, Coca-Cola and Dabur.

CARMAKERS

Auto companies haven’t resumed production. Maruti Suzuki is assessing the readiness of its supply chain partners to restart operations. Maruti Suzuki chairman RC Bhargava said no decision had been taken on this yet. Steady access to supplies from all its vendors is crucial, he said, to reopen factories. “There is no point opening up unless you can continue production in a sustainable manner,” Bhargava said.

“The issue is if supply stands disrupted for a single component, vehicle production would get held up. Also, if vehicle makers resume production, stocks would pile up because dealerships cannot open before May 3,” said an industry executive, who didn’t want to be identified. Passenger vehicle makers already have inventory of over a month in their networks.

Hyundai Motor India Ltd (HMIL) has readied standard operating procedures and the company will take a decision on the basis of the guidelines issued by state governments. “We are also looking into the supply situation and at our distribution network,” said GS Mani, director, production, HMIL.

About 70% of Hyundai’s supply chain partners operate out of the Sriperumbudur industrial belt near Chennai, while the rest are spread across the country. Hero MotoCorp, meanwhile, has decided not to reopen until May 3. Bajaj Auto is still awaiting approvals to resume production in Maharashtra and Uttarakhand.

In Tamil Nadu, authorities had a meeting with auto companies on Monday. It was decided to extend the lockdown for the sector till May 3.

CONSTRUCTION

In Maharashtra, the state government has said work shouldn’t resume until further instructions. In Haryana, construction has started in green zones. In the rest, construction is expected to restart by next week.

In Telangana, construction remains halted. The state hasn’t announced a date for resumption. Uttar Pradesh hasn’t allowed construction in its major urban centres, where most projects are located. Government projects outside municipal limits have started construction work.

In Tamil Nadu, all activities have been stopped until May 3. Karnataka is expecting work to commence in three-four days. Most pockets of key markets such as Mumbai, Delhi, Thane and Pune are in red or containment zones where construction work cannot be started. Work in Bengaluru has also not started.

SMARTPHONE

Top smartphone brands such as Xiaomi, Samsung, Oppo, Vivo, Apple, Realme and OnePlus didn’t commence production on Monday. Several are planning to postpone their manufacturing plans until the lockdown ends.

The plants of Vivo and Oppo in Gautam Buddha Nagar are in red zones and decided not to restart manufacturing late on Sunday night. Oppo also manufactures for OnePlus and Realme and hence the production plans of those brands are also affected. Apple’s contract manufacturers didn’t restart production on Monday.

“While observing the new directives, our production unit will remain closed until we hear further from the government, considering our employees’ welfare to be the top priority,” a Realme India spokesperson said.

A Vivo India spokesperson said the company is in conversation with all stakeholders and evaluating the situation continuously, keeping the wellbeing of employees and partners in mind. Oppo, OnePlus, LG, Apple and Samsung didn’t respond to queries. Xiaomi declined to comment.

Pankaj Mohindroo, chairman of the India Cellular and Electronics Association said companies are still engaging with local authorities to look at options to restart production. “Mobile phones are essential goods and there would be demand while several companies also export out of India, which can also restart,” he said.

CONSUMER ELECTRONICS

LG, Samsung, Panasonic and Godrej Appliances are planning to postpone their manufacturing plans once the lockdown ends since both the offline and online markets are closed with inventory piled up in warehouses and several plants located in red zones where no activity is allowed.

Until the market opens up, there’s no point in restarting manufacturing since warehouses and that of the retailers are fully stocked up, said Kamal Nandi, business head of Godrej Appliances and president of the Consumer Electronics and Appliances Manufacturers Association.

The plants of LG India, the country’s largest home appliances manufacturer, in Greater Noida and Pune, are in red zones and hence not allowed to operate. Samsung India too is unlikely to restart production in its plants in Noida and near Chennai. While Panasonic India’s plant in Jhajjar in Haryana is in a green zone, the company has postponed a restart.

“We are not starting production now as the inventories in the pipeline and also in our warehouse are adequate to meet the demand as it starts to pick up,” said Panasonic India CEO Manish Sharma. “We are ready with our safety procedures and will be in a position to start as needed.”

The companies also cited problems in bringing workers to plants by passing through areas that are sealed. They said component suppliers are also facing similar problems, with some plants being located in red zones.

(Ratna Bhushan, Sharmistha Mukherjee, Writankar Mukherjee and Kailash Babar contributed to this story)

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