Consumer electronics and appliances makers are staring at an obvious financial slowdown as companies are forced to suspend manufacturing operations to contain the spread of the infectious coronavirus (Covid-19). Companies such as LG, Samsung, Panasonic, Havells and Godrej Appliances have temporarily shut operations till March 31 amidst a nationwide lockdown in India and will review resumption only later this month.
Japanese firm Panasonic is also closing down its production units in India, including its largest facility at Jhajjar, Haryana, where it manufactures washing machines, ACs, refrigerators and audio products. “At Panasonic, we aim to comply with all government orders, and safety of our employees and citizens at large is of paramount importance to us. In line with the current scenario, Panasonic India has taken a call to close production at our factory unit temporarily. We will keep reviewing the situation for any further actions,” said a spokesperson.
South Korean major Samsung, which manufactures a range of products such as mobile phones, refrigerators and washing machines, has suspended operations at its Noida and Chennai plants.
“As a measure to safeguard our employees and their families against Covid-19 and in compliance with directives from the government, we have decided to currently suspend our manufacturing operations and have asked employees at our sales, marketing and R&D offices to work from home,” Samsung India head corporate communications Partha Ghosh said.
Similarly, LG Electronics India said it is monitoring the situation. For now, it has suspended production at its manufacturing units at Greater Noida in Uttar Pradesh and Pune.
“We have decided to suspend production in our manufacturing facilities in Greater Noida till March 25 and at Pune till March 31,” LG said.Avneet Singh Marwah, CEO, Super Plastronics, estimated a total industry loss of `300 crore in the long run due to the crisis. However, he agreed that “it’s better to cure this right now” than to continue operations.
He said he looks at 2020 as a 11-month financial year now and will try and achieve his targets in that time. Analysts say the consumer durables sector was already grappling with supply constraints since the last two months and now will be impacted more due to a shutdown of manufacturing units in China.
According to Kotak Securities, companies that may get impacted are: Havells (Lloyd), Voltas, Whirlpool and Crompton Greaves Consumer as they import lighting and switchgear products from China.Havells India said it has suspended operations at nine plants in Haryana, Uttarakhand and Rajasthan till March 31. “Our plant heads are continuously accessing the situation on ground,” a Havells spokesperson said.
Godrej Appliances too announced closure of its factories at Mohali in Punjab and Shirwal in Maharashtra. “We at Godrej Appliances have decided to suspend manufacturing operations in Mohali and Shirwal factories, and all operations from its offices, branches and warehouses from March 22 until March 31,” said Kamal Nandi, business head and executive VP, Godrej Appliances.
Coca-Cola, nestle suspend ops
Beverage maker Coca-Cola said it has temporarily suspended production following the lockdown. But it will continue to produce essential beverages like water, juices, tea and coffee in a limited manner as per government guidelines. Nestle India said all operations in some locations are scaled down or suspended. It was in discussion with authorities to continue operations in factories and distribution centres where operations have been suspended, the firm said.