Manufacturing firms want partial lift on Covid-19 lockdown to reduce losses

Rajiv Bajaj, managing director, said: “We have requested to at least permit export production to start, so that there is no credibility loss for Indian industry and its supply chain.”
They are companies that operate from two leading industrial hubs but in completely different sectors — Tirupur in textiles, while Chakan, near Pune, in autos, with big names like Bajaj, Volkswagen group, Daimler and Mahindra & Mahindra operating there. Despite the difference in businesses they have a common demand to the state government — permit them to open their factories even if in phases so that they don’t lose huge money.

In the country’s textile hub of Tirupur, garment exporters are worried they might loose over Rs 25,000 crore worth of orders, putting them in serious trouble. They are required to send sample products to their customers in Europe and US in April and May. On the basis of samples, they get firm orders for next summer and winter. If they don’t, these orders will be grabbed by China and Bangladesh, which have their factories rolling.

Raja M Shanmugam, president of Tirupur Exporters’ Association, said: “Companies have said they will be able to manufacture the samples even with 10 per cent of the workforce. If they don’t ship this month, next month orders will go to China, which has already started manufacturing, and Bangladesh, which partially started production last Sunday.”

Most of the exporters have the required manpower and had sourced the raw material before the lockdown. All they need now is permission to produce the samples after putting in place all health and safety measures in place.

Aware of the challenge faced by exporters in Tirupur, the ministry of textiles has asked the Apparel Export Promotion Council (AEPC) to ascertain details of companies having residential, hostel, or dormitory facilities, where workers can stay on campus 24x7 and do their work while maintaining social distancing. They have been assured that a decision on permission to partially open will be dependent on this exercise.

In Chakan, it is the big boys who are pushing for a partial lift of lockdown. Bajaj Auto, which exports half its two-wheelers, for instance, has requested the state government to allow them to produce only for exports.

Rajiv Bajaj, managing director, said: “We have requested to at least permit export production to start, so that there is no credibility loss for Indian industry and its supply chain.”

Bajaj said his factory has only 1,300 workers who produce a million vehicles a year. Their average age is only 26, so it is a young and healthy population. Many of them live in rented accommodation within a few kilometres of the factory and away from their families. A large chunk of the vendors, who supply to the plant, are also located in a cluster around the plant.

“In my view, plants like this should be permitted to start, with the employer taking responsibility for screening, masks, and social distancing,” he said.

Sources say some of the carmakers in Chakan are pushing for some relaxation. For instance, they have asked for allowing them to dispatch vehicles that are lying in the factory premises to dealers. Some of the companies want to go even further.

“We are also looking at the government permitting us to produce up to 10-20 per cent of the capacity to begin with, with all the precautions,” a carmaker said.

Yet in Uttar Pradesh’s Noida, a cluster that houses global manufacturers like Samsung and LG, no one seems to be ready to take risk. According to the Noida Entrepreneurs Association, which represents over 10,000 units in Noida and Greater Noida region, allowing labour to work for basic maintenance work would lead to thousands of workers amongst the 1 million that work in the region to get out of homes, and that would be difficult to handle.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel