B Thiagarajan, Managing Director, Blue Star Ltd, talks about the impact of coronavirus (COVID-19) on supplies and growth expectations in summers during a candid talk with Swati Khandelwal, Zee Business. 

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Edited Excerpts: 

Q: Had coronavirus has had any impact on your supplies and what is your outlook for the summer season?

A: I firmly believe that the world hasn’t come to an end. The summer season is on and from the supply side things have approved and China supply is getting to normal. As of now, we are getting around 50% of the material and we expect to touch almost 80% by the end of March. The season is picking up, secondary sales should be picking up from next week onwards. Originally, we estimated that summer 2020 will be at least witnessing 20% growth over summer 2019. But as of now, I am not very sure how the demand is going to pan out. 

 

Q: Name the components whose import has been impacted due to this coronavirus till date and what impact it will have on manufacturing? 

A: When it comes to components than you have to depend on global sources. India is a very small market and we don’t have a scale to manufacture components here. We can manufacture finished goods. We are largely a manufacturer but certain components indeed have to come from the global market whether it is Unites States, Europe, China, Vietnam or Thailand. These sources components are some or another way is connected with China. To overcome this completely, whether India can become a manufacturer of components for which the domestic market size will have to grow. For that, the government has to provide measures in which they can grow the market for domestic consumption. One of the requests that we have placed is that look if the GST on the air conditions can be brought to 18% from 28%. Perhaps two things will happen (i) energy-efficient products will be manufactured and (ii) the volume will go up. Therefore we can consider making investments for even manufacturing components. The China dependency on finished goods has done with and all of us ‘Make In India’ and all the manufacturers have made substantial investments. But to get at the component level you need a manufacturing scale and Indian markets will take a few more years to reach that scale and there we are.