The Hindu Business Line : India Inc at the receiving end

WITH the onset of the peak season for sales, corporate India has started feeling the heat of the ongoing truckers' strike. It's not just a select few business segments that are at the receiving end; the strike has hit industries across the board, from fast moving consumer goods (FMCG) to consumer electronics and durables sectors.

And the impact that the industry foresees, in case of a prolonged strike, includes delayed despatches, stocks moving off the shelves and even shutters down in some cases.

"If a solution is not found soon enough, it will have an adverse effect on the industry, especially the consumer electronics and durables sector," a Consumer Electronics and TV Manufacturers Association (CETMA) official said.

The impact will be felt more in the refrigerators and air-conditioners (ACs) category of the segment for which the season begins now, the official added.

Voicing his concern, Mr Kawaljeet Jawa, Vice-President, Cooling Appliances Division, Voltas Ltd, said: "The strike is having a paralysing effect on the industry as stocks at the channel partners and retailers are getting exhausted. For the refrigerators and the ACs, this is a peak season - about 15 lakh refrigerators are sold; more than half the total market size of 35 lakh refrigerators are sold during the summer alone. In the case of ACs, the total sales during the summer touch approximately 5 lakh."

Besides, in the manufacturing plants today, companies operate on thin inventory of raw materials and other necessary inputs, he added.

"If the truckers' strike continues for the next 3-4 days, the manufacturing units will be forced to shut down owing to a lack of raw material and inputs."

Concurring with the view, a senior Samsung India Electronics Ltd (SIEL) official said: "In products like ACs and direct cool refrigerators, where secondary movement is fast, we cannot replenish the stock at the dealer counters due to the strike. The demand varies from counter to counter. Currently, these are two categories which are affected, but if the strike continues, the heat will be felt across all the categories."

According to colour picture tube industry sources, dispatches to long distances are being held up and imports have also been adversely affected.

"The impact may not be severe right now but if the situation continues, it will spell bad news for the sector."

Meanwhile, FMCG major Dabur has taken a hit in Maharashtra and parts of South India, Mr Sunil Duggal, CEO of Dabur, said.

According to him, if the strike continues for a couple of more days, it would have an adverse impact on the FMCG industry. A Hindustan Lever Ltd spokesperson too echoed similar sentiments.

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