The company, which follows the calendar year for accounting, said the prolonged lockdown with no infrastructure activity in April-June quarter has negatively impacted the business in India as there was no demand for its equipment.
"January and February 2020 were the best months for our business this fiscal as all actions taken by the government for awarding contracts and making payments had brought back customer confidence.
"However since the beginning of March, we started feeling that the situation would be difficult due to the outbreak of COVID. But no one thought that India would also be affected to this extent that the entire economy would come to a standstill," Schwing Stetter India managing director VG Sakthikumar told .
Incorporated in 1998, Schwing Stetter India, a 100 per cent subsidiary of Schwing GmBH, manufactures concrete batching plants, concrete mixers & pumps, tower cranes, self-loading mixers and concrete recycling plants, among others.
"2019 was sluggish as compared to 2018 mainly because of the global economic slowdown. Therefore, we were confident about the growth in 2020. However, since we lost almost three crucial months due to the COVID crisis, we are expecting a 15 per cent decline in revenues this year as against Rs 1,730 crore reported in 2019," he said.
Sakthikumar further said that the company had managed to restart production at its facilities in Tamil Nadu, but since the demand had gone down, it was running at lower capacity utilisation.
"Despite the relaxation of lockdown norms, infra project activities have not picked up due to the shortage of labourers. As a result, many contractors who had committed to buy the equipment earlier are either postponing their decisions or hiring them from vendors as they want to keep their costs low," he said.
According to Sakthikumar, the revenues from the Indian subsidiary are nearly 5-6 per cent higher than the share of the parent company in Germany.
He further said that the company had to postpone the launch of its new manufacturing facility in Tamil Nadu as the work had stopped due to the lockdown and shortage of labourers.
"We were going to commence the operations some time in March but due to the lockdown and decline in demand, we had to postpone it. We are expecting to launch the facility by August," he added.
The new unit, entailing an investment of Rs 350 crore spread over two phases, is a step towards strengthening Schwing Stetter's commitment to the Indian market and focus on meeting the emerging infrastructure boom in India and export potential in Asia and African markets, he said.
"Over the years, Schwing Shetter India has emerged as a manufacturing and export hub of the German firm as we manufacture twice the number of products in India as compared to the German unit. While the Indian market was down, we managed to pick up decent orders in the international markets," Sakthikumar added.
The company serves many countries across the markets such as ASEAN, South Asia, West Africa, East Africa, South Africa, few countries in the Middle East and Eastern Europe.
He, however, noted that the demand scenario in India will improve by September as the government is committed to increase its spends on the infrastructure segment. PSK BAL BAL