Demand boost awaited by manufacturing companies for operations pick up
The unprecedented conditions COVID-19 pandemic has brought is affecting all the industries across sectors alike. With restrictions being curbed slowly since lockdown 4.0, and now even further as Unlock 1.0 phase starts from June 1, the manufacturing units in various sectors are slowly coming back to operations, though still working at optimum capacity.
India Inc is hoping for demands to go up as the country transitions from lockdown 4.0 to unlock 1.0, which were otherwise heavily downsized during the lockdown. This is going to boost operations in companies and revive the economy.
Several manufactures have reported to be working below their 100% capacity. The sectors falling in essential services like pharmaceuticals and FMCG (fast-moving consumer goods) are still in a better position, though working at lower capacity as well. The companies in consumer durables, auto, auto parts, tyres, textiles are witnessing a stunted phase with bare minimum working capacity. The main issues being face dare that of reduced manpower and staggering demand.
The auto sector is among the worst-hit sector during the pandemic lockdown. Companies like Toyota Kirloskar and Maruti have started their manufacturing units, but are working at optimum capacity to match the demand dip, also reducing the shift hours. The industries dependent on the auto sector are also waiting for demand surge before ramping up their manufacturing capacities.
The prime reason for the under-utilization of manufacturing capacity in industries is the unavailability of skilled workers, apart from the lack of consumer demand. Voltas MD and CEO Pradeep Bakshi said, “The exodus of migrant workers from key industrial belts has posed a huge challenge to manufacturers. It’s also difficult to replace migrant workers with the local workforce owing to the lack of required skills.”
Parle Products, the leader in biscuits consumable industry, are manufacturing at 70% capacity. All 130 units of Parle are operational but are waiting for the government’s nod to increase the workforce before ramping up its capacity.
On the contrary, the pharmaceuticals industries are bouncing back to normalcy much faster than other sectors due to being in the essential spectrum, and also because they were still operational during the pandemic lockdown. The pharma industries are now operating at 65-70% capacity.
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