Thursday, September 03, 2020

Disruption of production likely in the short term due to Covid-19: HAL

Bengaluru: State-run aerospace behemoth Hindustan Aeronautics Ltd (HAL) on Thursday said there could be likely disruption of production in the short term, with established supply chains getting affected, because of Covid-19 pandemic.
 Though HAL also expressed fears that downsizing of the defence budget and risk of economic recession can lead to difficulty in working capital availability, it hoped that strong push from the government through the 'Atmanirbhar Bharat Abhiyan' is expected to favourably impact operations of the company.
 "The company's business is mainly concentrated in Defence services, major negative impact on the demand side of the business due to the pandemic in the long term is not anticipated currently, as the defence contracts reflect long term requirements of national interest," HAL CMD R Madhavan said. He, however, said the company is highly technology-intensive with the product spectrum including both Transfer of Technology (ToT) as well as indigenous platforms that contain systems/ subsystems/ raw materials of foreign origin. "Since the pandemic has caused world-wide lockdown, suppliers, in general, are financially stressed due to cash flow and liquidity problems, possible production holds up in suppliers' facilities and restriction on movement of goods through international freights can lead to disruption of established supply chains and hence there could be likely disruption of production in the short term at HAL," he said.
 However, through all-out efforts the company is confident of tiding over such aberrations with resilience, Madhavan further said, in the company's annual report. Noting that the past one decade has seen consistent growth of the military and commercial sectors of the A&D industry, both in the international as well as the domestic market, the HAL CMD said, during the past decade HAL has reported an impressive growth with an increase in sales of the order of 62 percent and efforts are in place to maintain the growth momentum. However, the last quarter of the financial year saw the Covid-19 pandemic engulfing countries world over, disrupting normal operations of industries due to the lockdown.
 03/09/20 PTI/Deccan Herald
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