“It was a pleasant surprise and I never expected that type of call,” says Managing Director of Schwing Stetter India (SSI), VG Sakthikumar while discussing the improving business prospects for the company in the post-lockdown period.

A couple of weeks ago, on a weekday morning, Sakthikumar received a call enquiring about the resumption of activities at the company’s factories and the business environment. The person also asked whether Schwing Stetter India would require any help for its business continuity.

Sakthikumar was elated. The call came from Invest India, investment promotion and facilitation agency of the Government.

“I was surprised over the call and Invest India official said the agency was willing to pitch in to help the industries in co-operation with the State government. For the first time, I was getting a call from the Centre and I gave my feedback to them about the help extended by the Tamil Nadu government during the lockdown,” said Sakthikumar.

Tamil Nadu government officials permitted SSI to move export-related consignments to the ports from the factory, located near Chennai, and also undertake maintenance work during April when all units were closed.

Over the past couple of months, the company has been actively working on improving sales with a renewed business plan amid lower revenue guidance for 2020.

The company sees improved enquiries in most of the places barring three cities – Mumbai, New Delhi and Chennai.

“Our monthly average invoicing was about ₹150 crore during 2019. But in this calendar year, it was about 20 per cent of the last year’s monthly average in April and it reached about 55 per cent in June. Post-August, we expect to reach normal level gradually,” he said.

While customers who bought batching plants before March are coming back to buy other equipment now, Schwing Stetter sees equipment orders from contractors of NHAI, which has now started awarding big-ticket projects.

Automation drive

Also, the movement of migrant labours to their native places are expected to drive automation at the construction sites and, consequently, the company expects demand for equipment that will carry out work of 15-20 people.

Sakthikumar points out that there is always demand for low-value equipment during the slowdown phase and the company sees improving demand for such equipment for small construction activities in rural areas etc.

Challenges

Meanwhile, the company faces some challenges on account of poor sales of trucks. Absence of trucks that could be used to mount SSI equipment impacts its equipment sales. “But, we hope truck sales will improve in the coming weeks,” he said.

On the production side, the company has adopted a flexible business plan, under which it is moving staff to the factories where production needs to be ramped up as per demand situation, while housing some essential staff near the factories.

Also, it has taken up in-sourcing activity under which some of the outsourced activities are executed by their staff themselves now due to lockdown-related challenges. Absence of migrant workers has also hit some of their vendors. “We hire contract workers during some months and we have now directed them to the vendors’ units to complete their orders,” he said.

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