Ramesh Gehaney, COO of , in an interview with ET Now, talks about the effects of the COVID-19 pandemic, subsequent lockdowns and the resurgence of the virus a year later on their business.
ET Now: How do you think a second coronavirus wave will impact an auto ancillary company like yours?
Ramesh Gehaney: The thing with a second wave is that impact won’t be immediate but in ripples, if cases keep increasing and restrictions get tighter there will be an impact on the industry but as of now, with everyone working towards precautionary measures, we should be okay. There hasn’t been any change in supply patterns, scheduling patterns or consumption patterns, as of now.
ET Now: Are OEMs asking for supply to be boosted? Or to increase your inventory? Have there been panic calls?
Ramesh Gehaney: Right now, there hasn’t been much panic. But, OEMs are definitely on their toes, especially ones that get their supplies in Maharashtra. They are operating cautiously, ensuring that tier twos and threes are sufficiently stocked. We’re sure that our stocks are good enough right now to hold on, as I said, there’s no impact currently. If restrictions get tighter, there may be some effect in the coming days.
ET Now: … and what about your own requirement?
Ramesh Gehaney: So, the auto industry works on a hub pattern – Aurangabad, Pune, Mangalore and Chennai are a few – where auto ancillaries are based. The supply chain functions on having stock godowns – and having them close to customers – that are kept stocked on the basis of demand to supply components. Now, if a customer in tier twos and tier threes have also got local godowns within Aurangabad and Pune, from where material is supplied on a daily basis, there won’t be issues. Right now, we have sufficient stocks, I don’t see any disruptions happening immediately.
We know the numbers are increasing and there is the possibility of stringent guidelines from the MHA, but right now industries are allowed to operate so there isn’t any panic.
ET Now: Do you think India will struggle with the second coronavirus wave?
Ramesh Gehaney: The thing is, it has been a year of the COVID-19 pandemic and this time last year we have no idea what had hit us. But now, we’re prepared, we know what to do. We’ve been through a lockdown, we’re home quarantining patients, we have a vaccination programme underway. In 2020, the system halted abruptly, that won’t happen now.
The pressure on our healthcare system has reduced considerably. I has tested positive for the virus, myself, two weeks ago. I quarantined in my house and there are multiple others who have gone through the same. We now know how to cope.
Even though cases are increasing, there is no panic amongst people, unless symptoms are serious enough to warrant being in the ICU.
ET Now: How much have imports been affected? Especially with new variants of the coronavirus in UK and Africa variant?
Ramesh Gehaney: The imports have mostly been held up in docks and shipping containers, which is an effect of the first wave of the coronavirus. The first country to reopen since the start of the pandemic was China, and once they did they started clearing all the orders that had been backlogged during that time. But, the countries that had receive shipments were still locked down which meant all the shipments got stuck.
Now, if I don’t have an outlet to supply, the next decision is to stop incoming material. All that has cascaded into an import shortage – especially with semiconductors – and increased freight. That’s something all of us are struggling with, because we’re now paying almost three times more than what we used to pay pre-pandemic.
While we do need to solve all these problems, and figure out how to get the supply chain back to normalcy, at least nothing is at a standstill currently.
ET Now: Are the lockdowns/restrictions impacting your current order book?
Ramesh Gehaney: See, in the auto industry, especially for components and assemblies we supply, the order book isn’t instant. I don’t get it today, manufacture material and send it out tomorrow. Products take a year, year and half to develop and build. So, there isn’t much of a challenge on the order book because we have booked orders close to Rs 700 crores this year. The sales and revenue we report currently are from orders placed over two years ago. That’s just how the industry works.
