Metal giants scale down operations amid Covid-19 lockdown
Two metal giants —JSW Steel and Hindalco — have decided to scale down operations in some of their plants and suspend altogether in certain others following the 21-day lockdown announced by the Centre on Tuesday.
In a late filing to the bourses, JSW Steel, India’s top private sector steel producer, said capacity utilisation of the company would ‘go down significantly’ during the period of lockdown. Hindalco has temporarily shut down some of its aluminium and copper manufacturing facilities. In the US, Hindalco subsidiary Novelis has also partially shut down some of its plants.
JSW Steel, part of OP Jindal Group and promoted by billionaire industrialist Sajjan Jindal, is capable of producing annually 18 million tonnes of the alloy which finds use in construction, consumer durables and auto industry.
“The company has taken the decision to scale down/suspend production to support the cause of containment of the pandemic Covid-19, notwithstanding the exception to manufacturing units with continuous operations and the units producing essential commodities (steel is classified as an essential commodity under the Essential Services Maintenance Act, 1981),” the notice to the bourses read.
JSW operates two integrated steel plants, one at Vijaynagar, Karnataka, and the other at Dolvi, Maharashtra. It also operates a smaller unit at Salem in Karnataka. The company has several downstream facilities across the country.
Sources said movement of trucks taking out the finished products had nearly stopped at the plants, leading to building of stockpile.
Truck operators have gone back to their village while movement by rail has come to standstill.
‘There is no reason to continue to produce when all major buyers have suspended operations,” a source pointed out.
The Telegraph had reported that construction across the country has come to a standstill as every state announced its own lockdown.
JSW joins the league of several other small and medium companies that suspended operations. Notable among them are Calcutta-based FMCG major Emami and wire and wire rope maker Usha Martin. Japanese auto maker Nissan Motor is also closing its factory in India.
The closure by one of India’s top core manufacturing sector players indicates that the economy is set for a serious beating in the coming days, underscoring the urgency to announce a stimulus package by the Centre to combat the economic fallout of Covid-19.