The soaring COVID crisis in China has cast clouds of worry over the entire supply chain arena. With the Chinese New Year holidays kicking off in the third week of January and the COVID situation worsening, the fear of China not being able to resume full production potential in February hovers around. Due to this, consumer durables makers have now started stocking up their inventories with raw materials in order to tackle the foreseen supply chain disruption.
Atul Lall, Vice Chairman, and Managing Director, Dixon Technologies, said, “Till now, the supply chain (from China) is fine and not impacted. Our suppliers are assuring us about delivering on time, but we are keeping our fingers crossed and putting everything under the lens. But still, there are some categories, like air-conditioning, where the dependence on China is very high. Nearly 40 to 45 percent of an air conditioner’s components (by value) come from China, and compressors form a big part of that.”
On the other hand, Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances, commented on the same, saying, “If they dispatch after the new year holidays, we will not get it by March. The majority of the components are on their way… but if COVID’s post-New Year’s holiday challenges continue and operations (at factories there) do not resume in full swing, we will face challenges in the June quarter, particularly in categories such as air conditioners. We are very watchful as of now.”
Speaking about the present situation, Avneet Singh Marwah, CEO, SSPL said “This is impacting the industry as everyone has pressed the panic button, which can result in the excess purchase of raw materials, which can influence artificial price hikes that have been seen in the past. This can lead to a global sales crash as sentiments are low right now.”