Factories firing on all cylinders as LPG supply eases
This follows the government’s decision on Friday to increase commercial LPG allocation by 20 percentage points to 70% of the level before the supply crunch due to the Gulf conflict and Iran’s near-blockade of the Strait of Hormuz.
The Center has identified steel, automobiles, textiles, paints, chemicals and plastics as priority sectors, citing their labour-intensive nature and linkages with other industries.
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Companies said LPG availability has increased.
Allocation of Priority Sectors increased
“Earlier, we had a meeting for a day or two; now it has been about a week,” said Kamal Nandi, head of Godrej Enterprises’ white goods business unit. “There are no problems with labor or raw materials, and production continues at full speed.” A senior auto industry executive said restrictions on small suppliers were starting to ease, while large manufacturers were shifting to alternative fuels and experiencing limited disruption.
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“Greater allocation to non-domestic LPG and inclusion of automobiles as a priority sector is a big contribution,” he said.
LPG is widely used in soldering and paint shop operations in industries such as automobile and electronics, and in sectors such as food processing.
Companies in these sectors report that they are gradually returning to normal operations.
Mayank Shah, vice president of Parle Products, India’s largest packaged food company, said improved supplies helped affected plants return to optimum production. Companies have asked the government to list packaged foods as one of the priority sectors.
Supplies have risen to around 60% of normal levels and are expected to reach 80% this week, said Ajay DD Singhania, managing director of leading electronic contract maker Epack Durable.
“The new normal is that we have to monitor daily to secure LPG supply, but availability has increased,” Singhania said. “Retaining the workforce is no longer a problem as we offer food or cooking support. But the production losses in the last three-four weeks cannot be compensated.”
Improvement in attendance
Many companies have started providing meals through factory canteens, reducing the dependence on LPG for cooking. Previously, supply disruptions had triggered the absenteeism of migrant workers and a temporary exodus as rising black market prices and the closure of small eateries and eateries made access to food difficult.
A senior automotive supply industry executive said firms are offering daily meals in shifts or incentives of up to Rs 5,000 to offset high LPG costs and retain workers. “Attendance has returned to normal,” he said.
Super Plastronics CEO Avneet Singh Marwah said: “Migrant labor has returned as LPG supply pressures ease.” The company produces televisions under the Kodak, Thomson and Blaupunkt brands.
