Consumer durable firms face fresh challenges in 2nd Covid wave

Meenakshi Verma Ambwani New Delhi | Updated on April 26, 2021

Consumer sentiment is also subdued. If the current conditions prevail, there could be shortages of cooling products in the coming weeks. We are hoping demand revives in May

Mounting Covid-19 cases, lack of enough manpower and ban on use of oxygen for industrial use besides local restrictions in certain States, has adversely impacted production of several consumer durable companies, especially in the cooling products segments.

Depending on the location, companies are either cutting back on production or temporarily suspending production at their manufacturing plants for a few days.

Industrial oxygen hit

Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA) said, “Without oxygen, companies making compressor products such as air-conditioners and refrigerators cannot run plants. So while some players have already closed down manufacturing facilities, many others are also likely to do so in the next few days. Due to reverse migration there is also a shortage of workers, apart from safety concerns. At the same time, the second wave of the pandemic has dampened consumer sentiment and there is already a drop in demand by 40-50 per cent compared to April 2019.”

Companies said depending on consumer buying sentiment there could be short supply of cooling products by next month.

Kanwal Jeet Jawa, MD & CEO, Daikin India said, “Since last week we had begun tapering down production at our plant in Neemrana in Rajasthan and now our plant is not operational. On one hand there are rising Covid cases, and on the other use of oxygen for industrial purposes is not allowed. Consumer sentiment is also subdued. We are hoping demand revives in May.”

Peak season hit

Haier India’s plant at Pune has not been operational due to lockdown restrictions imposed by Maharashtra. Eric Braganza, President, Haier India said,” We are in a state of flux at the moment and will need to wait for decisions by various authorities in the coming days to be able to restart production at our plant. April-June is the peak season for cooling products and given the rising Covid cases, sales momentum for these products has been impacted. More than 35 percent of the country is under some form of lockdown, while more than 60 per cent of the country shuts down during weekends.”

Panasonic India has also paused manufacturing at its plant at Jhajjar, Haryana for a week. “With a few States implementing partial lockdown, we anticipate some disruptions in the supply chain across regions. We may see a loss of 35-40 per cent against sales projections during the ongoing quarter. We are positive that the next quarter will witness revival,” said Manish Sharma, President and CEO, India and South Asia.

Published on April 26, 2021

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