Realme CEO Madhav Sheth hopes to resume smartphone production soon

While the new government guidelines have allowed IT manufacturing units including mobile phones to resume operations from May 4, there has been no official confirmation yet and Realme India is awaiting the nod to open its factory at Greater Noida and begin streamlining overall processes, its CEO Madhav Sheth said on Sunday.

Due to the extended lockdown, there are many challenges faced by businesses with huge impact from sales, manufacturing and cost.

"With the recent extension of the lockdown period for two more weeks, we haven't received any official confirmation on when can the production will resume," Madhav Sheth, Vice President, Realme and CEO, Realme India, told IANS.

"We have reached out to the government for approval on opening of factory and now await their decision. We will abide by the government's order strictly, while prioritising people's health," he added.

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The India Cellular And Electronics Association (ICEA) on Friday welcomed the decision to let the IT manufacturing units including mobile phones resume operations, saying it thanks the MHA for accepting the industry's recommendations to restart manufacturing of IT Hardware products which include mobile phones and mobile devices.

The extended lockdown in India has resulted in zero shipments for the smartphone players in India in the month of April as factories are shut.

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According to Sheth, from manufacturing point of view, even if the government allows factories to reopen, it will take at least two-four weeks for the factory to resume its normal capacity.

"We don't want to rush and open our factory as the situation is still not normal and we value our employees and their safety. We would wait for the government's further notice to understand that till what extent the factories can start working and would decide further on that,' he elaborated.

The month of March saw a steep annual decline in smartphone shipments, at -19 per cent, due to COVID-19 nationwide lockdown that settled in from March 24.

On cost factors, the outbreak of COVID-19 has also influenced countries like China, Korea, the US and Japan, where most of the upstream component suppliers of smartphones are located.

"However, the demand on the sales side also got reduced due to the lock-down as most brands couldn't operate their business and had to delay product plans," said Sheth.

In the future, he added, the disturbance of manufacturing along with the new surge of demand post lock-down might have further impacts on the price of components, which eventually influences smartphone selling price.

"The GST hike and fluctuating rupee exchange rates are other two cost factors," he said.

Other problem smartphone manufacturers are facing is lack of manpower.

"The migrant workers, truckers and helpers have gone back to their hometown. It will take more time to revamp the entire production cycle even after the lock-down period is over," Sheth told IANS.

The bigger uncertainty comes on the demand side.

"If the nation's economy and people's income got hampered, then the smartphone demand in 2020 may not be optimistic. We will need to evaluate further how the economy recovers post the market reopen," he emphasized.

"Bringing the factory back to work can help us sustain our business and employee welfare. Even during lock-down, we have been paying the same amount of salaries to workers on a monthly basis instead of daily wage," informed Realme CEO, adding that while sustaining business and considering employees welfare are top priorities, "we would hope to revamp the production to normal as fast as possible".