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Consumer durable makers stock up components amid supply chain worries

With the recent surge in Covid cases in China, consumer durable and electronics firms have stepped up focus on stocking up raw materials.

With rising concerns on supply chain disruption, the companies are also working on bringing forward the dates of shipments of critical components as they closely monitor the situation.

Bigger impact
“Some impact on supply chains is already visible with shipment delays of about 15-35 days. Less workforce due to Covid impact at factories in China is expected to further increase the pressure on shipments in the coming weeks. I believe higher selling products and stock keeping units (SKUs) may see a more severe impact such as bigger-sized TVs and premium models of appliances,” said Avneet Singh Marwah, CEO, Super Plastronics Pvt Ltd (SSPL).

He added that the company has been focusing on stocking up components especially for TV and appliance products. Companies that make air-conditioners and refrigerators typically begin stocking up on components December onwards ahead of the Chinese New Year holiday period. This is done to prepare for the summer season that starts from April.

Preponing shipments
Kamal Nandi, Business Head and Executive Vice-President, Godrej Appliances, said, “Most of the raw materials and components required for production for the March quarter have either reached or are in transit. But one will need to see how the situation pans out post the Chinese festival season which ends in early February. If there is not much improvement in the Covid situation, then the industry may see an impact on AC production in the June quarter.”

“We do expect some disruption happening in supply chains in view of the China situation. Therefore we are sharply focusing on stocking up on components and are preponing some shipments,” said Satish NS, President, Haier Appliances India.

Companies are also highly reliant on China for components such as compressors for air-conditioners, among others. Stating that the situation is a bit uncertain due to the rise in Covid cases, Eric Braganza, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA), said the March production of durables could get impacted if raw material or component supplies are not shipped before the Chinese holidays which kickstart from January 22. The Hindu Business Line

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