Production to resume slowly due to lockdown impact: Dixon Technologies

Dixon Technologies, a contract manufacturer in electronic goods, expects slow resumption of production due to the lockdown, a top company official on Tuesday.

The company, which has two manufacturing units in Noida and Tirupati, is yet to commence production as both the facilities fall into the red zone, where the government has prohibited manufacturing till the lockdown is over.

The company also expects an impact on its financial performance as manufacturing activities have been stalled in April and the sector is is expected to come back on its feet only by the second quarter (July-September).

Definitely, there would be an impact because the entire April is gone and in May, by the time, we will start and get ready, it is going to be slow, Dixon Technologies Chairman Sunil Vachani told PTI.

According to him, revival of the demand in the appliance and consumer electronics sector would only be possible at the end of the second quarter, when the festive season sale would start.

To come back to the normal position (for the sector), it would be only by the second quarter. It will be slow to start definitely, he added.

He, however, pointed out that some clients and customers have said there might be a pick-up in demand for low value ticket items, so in such items "we are hoping to recover much sooner than others.

When asked whether the company has started its manufacturing operations, he said approvals are awaited as the units in Noida and Tirupati fall under the red zone.

Once we start manufacturing, the supply chain also has to be smooth. So we are working on it, said Vachani.

Besides, he has asked the government to extend the production-linked incentive (PLI) scheme for the electronics sector to other sectors as well.

We are requesting that the scheme be extended to some other sectors, so that we could look at the global markets in the time to come, said Vachani.

Last month, the government had announced PLI worth Rs 40,995 crore for electronics manufacturing companies.

Under the scheme, electronic manufacturing firms will get an incentive of 4-6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies over a period of next 5 years.

Dixon Technologies, a home grown electronic manufacturing company, is a third party OEM manufacturer for consumer durables, home appliances, lighting, mobile phones and security devices.

It had a revenue of Rs 2,525.77 crore for the 2017-18.