Endurance Technologies Ramesh Gehaney discusses the COVID-19 pandemic, the resulting embargo, and the business impact of the virus making a comeback a year later with The Economic Times Today.

ET Now: How do you think the second wave of the pandemic will affect teaming companies like yours?

Ramesh Gehaney: The impact of the second wave of the epidemic won’t be immediate, but if cases continue to rise and restrictions are tightened, there will be a ripple effect with economic consequences. But so far, everyone is trying to take precautions, so we should be fine. For now, there are no changes to the supply model, the dispatch model, or the consumption model.

ET Now: Do OEMs need to increase supply? Or increase inventory? Any panic calls?

Ramesh Gehaney: I am not embarrassed yet. However, the OEMs, especially those sourcing from Maharashtra, are obviously keeping a vigil. They are operating carefully to ensure adequate secondary and tertiary stocks. We are confident that our stocks are sufficiently robust at the moment and as I said, there is no impact at the moment. There could be some impact in the coming days as the restrictions become tighter.

ET Now: …. What about your requirements? /pRamesh Gehaney: Thus, the automobile industry follows the hub model where automobile ancillary facilities are centralized (Aurangabad, Pune, Menghalore, Chennai, etc.). The supply chain operates on the model of having inventory warehouses close to the customers and maintaining inventory as per the need of supplying the components. Now, if our Tier 2 and Tier 3 customers have local warehouses in Aurangabad and Pune as well, the material is supplied on a daily basis, so there is no problem. There is sufficient inventory and no immediate disruption is expected.

We are aware that the numbers are on the rise and the Home Ministry may have laid down strict guidelines, but the industry can function at the moment so we are not panicking.

ET Now: Do you think India will suffer a second wave of the epidemic?

Ramesh Gehaney: Actually, this is the year of the COVID-19 pandemic. I don’t know what happened this time last year. But now we’re prepared and we know what to do. We’ve imposed a lockdown, isolated patients at home, and are starting a vaccination program. By 2020 2000, this will no longer happen because the system suddenly collapsed.

The burden on the health care system is significantly reduced. Two weeks ago, I also tested positive for the virus. I was isolating myself at home and others were going through the same thing. Now we know how to deal with it.

People don’t panic unless the symptoms are severe enough to warrant a trip to the ICU.

ET Now: How have imports been affected? Particularly new coronavirus variants in the UK and Africa?

Ramesh Gehaney: During the first wave of coronavirus outbreaks, most imports were stored in docks and containers. China was the first country to reopen after the outbreak. Once it opens, all backlogged orders will be cleared. However, the countries receiving the goods are still blocked, which means all deliveries have stopped.

Now, if you don’t have access to supply, your next decision is to stop buying inventory. All of this leads to import shortages (especially for semiconductors) and increased transportation costs. This is something we are all struggling with as we are paying almost three times what we were paying before the epidemic.

We need to find a way to solve all these problems and get the supply chain back to normal, but at least nothing is standing still.

ET Now: Will lockouts/restrictions affect my current order book?

Ramesh Gehaney: Look. For the automotive and industrial sector, especially for the parts we offer, orders are not instant. If I don’t receive it today, I will send you the production material tomorrow. It takes a year or a year and a half to develop and produce a product. So it is not difficult to take orders this year which is close to Rs. 700 crores. The sales and profits we are reporting today come from orders placed more than two years ago. That is how this industry works.