The manufacturing sector is coming back to life after the brutal blow the COVID-19 pandemic dealt it.
Across sectors demand is picking up and the hope is that the upcoming festive season will being more cheer.
The big growth driver for the sector has been export demand which continues to look strong. While the recovery is gaining ground, there are many headwinds as well. High raw material prices, semi-conductor shortages, container constraints are some of the key worries.
In an interview to Shereen Bhan, Vikram Kirloskar, Chairman of CII National Manufacturing Council and VC of Toyota Kirloskar Motor, said, "At present especially after the second wave demand seems to be back with a vengeance. I am even surprised on forklifts that we have such a higher order booking than we anticipated. Automotive after the second wave, orders are fantastic, at Kirloskar we are lucky that we don't have so much of chip issue. But unfortunately some of the industry is facing trouble with getting electronics and chips. However I see a bright future. A lot of the money that was spent over the last few months or last 18 months with COVID money coming in by the government has gone into the system and there are people who are out buying things. So I hope we can recover the two months we lost in the second wave and come out okay at the end of the year."
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R Mukundan, Chairman of CII National Committee on Environment & Industrial Relations and MD & CEO of Tata Chemicals said, "Demand is back, in fact demand on export side actually held many of us up when domestic demand did fall. Right now both export and domestic demand are very robust. The key issues that we are facing are all on the input side, especially on the cost side. However luckily the demand is so robust that many of the companies, many of our customers were able to pass the increases on to their consumers. Hopefully this period of adjustment where we are seeing some supply chain dislocation, probably we will overcome that and cost should sort of start to temper down. The big concern we have is on the energy cost, that has really spiralled up and many of us are working on how to improve energy efficiency, how do we take the cushion so that we don't pass on bulk of these issues to our customers and consumers."
Seshagiri Rao, Chairman of CII National Committee on Steel and Jt MD & Group CFO of JSW Steel said, "As far as steel is concerned, it is a globally traded commodity so we have to look at what is happening to the overall demand supply globally. Steel demand not only in China but even in rest of the world is very strong. So demand has picked up following COVID phase 1 and recovery is very steep and robust. As far as India is concerned, we have seen a peak in steel demand going up above 10 million tonne in the month of March 2021. After second COVID wave, even though some recovery is there in the demand, it is at 8-8.5 million tonne. Generally during this quarter which is monsoon, infrastructure and construction activity is low, so we are very hopeful that demand will increase to the normal levels and further grow in the following months of the financial year."
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Watch video for entire discussion.