Cost & Work Efficiency Are Crucial Post Covid
Realty+ in conversation with Aneel Parekh, Managing Director, Godavari Paints, finds out the way forward for the sector in the present times of pandemic.
Established in 1972, Godavari Paints Pvt Ltd has its manufacturing arm at Vadodra, Gujarat and boasts of a sophisticated setup of Research and Development department. The company is now ably led by Harddik Parekh, third generation and son of Mr Aneel Parekh. He manages operations, project execution and new market developments as the Vice President of Godavari Paints.
Speaking to Realty+ Aneel Parekh while, expressing his disappointment on the current handling of the economic situation of the industries, also articulated positivity for the times to come, given the strong demand for housing and infrastructure in the country.
What Has Been The Impact Of Covid19 On The Building Materials Sector?
Currently, world over all industries have come to a pause. Even post lockdown, we are all aware that there will continue to be a certain amount of negative impact on the raw material and labour availability.
However, it is a temporary phase. The government has taken multiple initiatives to pump liquidity into real estate and infrastructure. No doubt the challenges will remain and it will take a while to bring the industries back on their feet. Even demand will be sublime for a while. But it is only a pause for the industry not a full stop.
How Are You Gearing To Open Up Manufacturing Post Lockdown?
We have already received the necessary permissions to resume work. In addition, all the standard operating procedures have been modified taking into consideration the highest levels of hygiene and safety. We have adhered to all the protocols at our factories thus making them Covid compliant.
As of now we are focusing on R&D work until logistics is fully able to function. As each state is taking their own call on the reopening of the lockdown, we are waiting to see the outcome. A proper supply chain for the raw materials will be established once the lockdown is lifted. Because even in the absence of even one raw material the manufacturing and process gets affected.
Going Forward, Do You See Surge In Demand For Building Materials?
To be honest the pandemic has triggered a behavioural change in the thought processes of customers. As we are all social creatures, at some point this virus is bound to come in every ones house. We need to accept this and take the necessary safety measures.
We also need to get back to work. It’s not possible to be under lockdown for a lifetime. So, having a fear psychosis doesn’t make sense. The virus is in the system and all we can do is accept it and move forward.
In terms of demand, it will not disappear completely it is just a matter of unpausing demand. Everyone today is in a guesstimating phase. My guesstimate is that people will look at reserving cash flow for at least a year. So in that sense renovation or new construction becomes a luxury and I believe it is not going to pick up any time soon. Demand will only be there for necessities, as individuals and companies are in cash saving mode. So in short term the demand will contract and not Surge.
What Would Be Your Suggestion For The Real Estate Sector To Revive Growth Once Restrictions Are Eased?
The first step would be consolidation of the industry. The developers who can survive this period will continue to exist and grow. Secondly, developers will have to focus on completing the projects which are 70% done, other projects for now can be on the back burner. Thirdly and most importantly, the methodologies of construction will have to be revisited. Currently there is a gap in planning and sequencing of construction work that leads to inefficiencies. All the stakeholders including vendors will have to get equally involved to help save costs and fast track the implementation of the project.
I am a firm believer that there is manpower and time wastage at the execution level. Planning needs to be properly undertaken and efficiency should be increased. The solution lies in detailing. We need to undertake a holistic approach as an industry.
How Can The Government Help The Industries?
The Government is making a number of announcement but, how much is actually reaching to the industries, I am not sure. There have been mentions of bringing liquidity into the market, but how much has reached at the ground level needs to be analysed.
India is driven by MSMEs in terms of employment and GDP. It is high time the Government comes up with a concrete relief package for the MSMEs. The government need to introspect and help build up this sector.
For example: the 3 months moratorium to MSMEs on loans will create a debt trap for them. It is not a solution to the problem. We need a relief package such as one year interest waiver on working capital to MSME and a 20% additional capital on the existing limits without any additional collateral for a period of 3 years which will bring additional liquidity and thus help them work better. Ultimately the government will get revenue when MSMEs start functioning. Economic revival is a long drawn process and Government needs to walk the talk and expedite processes.
What Is The Future Road Map For Godavari Paints?
We have our own challenges, but we have been much focused and carved a niche for ourselves in this industry. With our planning we are confident that this year we will be able to achieve the same turnover as last year. We have a very good brand image and standing in the real estate sector. We also have a lot of orders in the pipeline which is local as well as Exports.
Looking beyond the year, we see a good road ahead 2021 onwards. The situation will get better and with the real estate projects getting back on track, the demand will regenerate. In the meantime we are working on automating processing, research & development and launching new products which will offer more efficient finishes. For the long term, we are working on technologies which will help us save on cost and increase our manufacturing capabilities as well as execute the projects more efficiently with less manpower.