Heatwaves to result in production loss in heat-intensive industries

The projected loss in the manufacturing sector is likely to affect the export of goods, with production delays and disruptions resulting in reduced inventory.
The projected loss in the manufacturing sector is likely to affect the export of goods, with production delays and disruptions resulting in reduced inventory.

Summary

Severe heatwave in India may cause up to 15% production loss in May for heat-intensive industries like engineering goods, steel products, and plastics, impacting exports and workforce efficiency.

New Delhi: The month of May is likely to see the manufacturing sector take a big hit from the ongoing heatwave in the country. Experts estimate production loss to the tune of 15% this month, primarily due to reduced workforce efficiency in heat-intensive industries such as engineering goods, steel products, and plastics. The projected loss could even affect the export of goods, with production delays and disruptions resulting in reduced inventory, the experts said.

“The increase in temperatures is likely to have an impact on manufacturing sectors, especially on units that rely on heat-intensive processes like furnaces and boilers," said Arun Kumar Garodia, chairman of Engineering Export Promotion Council (EEPC), a body under the ministry of commerce and industry. “These sectors may experience challenges related to maintaining operational efficiency and worker safety."

“As of now, we have not yet projected the expected loss in value terms. However, given the size of the manufacturing industry, we expect about 15% loss," Garodia said, adding it usually takes some time for such losses to be recovered.

According to the India Meteorological Department's (IMD) forecast, heavy heatwaves are expected over the next 4-5 days in Telangana, Karnataka, coastal Andhra Pradesh, Yanam (Puducherry), Kerala, Konkan, Maharashtra, and Gujarat.

In addition, Gangetic West Bengal, East Jharkhand, North Odisha, and Rayalaseema are expected to experience severe heatwaves, with the maximum temperature predicted to rise to 47 degrees Celsius.

Impact on manufacturing

Usually, major losses are experienced in products being manufactured through furnaces, boilers, and machine operations in uncontrolled environments, as the heat from the processes adds to the already severe warm conditions and reduces the efficiency of factory employees.

For instance, steel manufacturing involves melting raw materials in furnaces at very high temperatures, often exceeding 1,500°C. The molten metal is then refined and cast into various shapes such as ingots, billets, or slabs.

Also read | Input costs, election, Chinese imports to weigh on steelmakers' Q4

Similarly, the manufacturing process of engineering goods involves heat-intensive processes. Casting, forging, and welding are common processes used to shape and assemble metal components—all of which require high temperatures.

Plastic materials, too, are melted at high temperatures and then moulded into desired shapes.

Arun Shukla, managing partner of Vishwakarma Engineering & CMD of SterVac Technologies, pointed out that heat dissipation occurs during processes such as operating furnaces, which adds to the already warm environment.

“When there's a sudden change in the environment, such as increased heat, the first thing that often happens is that workers get sick," said Shukla. “This leads to a decrease in the attendance of the workforce, resulting in a loss of work hours and disrupting production."

Mitigation essential

“About 90% of production areas lack a protected environment, which affects the overall performance of the workforce. The heatwave will have a severe impact on production of goods," Shukla said, adding the loss is expected up to 15%.

It is crucial for manufacturers to implement proactive measures to mitigate these effects and ensure the continuity of their export operations.

India’s goods trade deficit narrowed by nearly 17% in March compared with the previous month, as imports fell steeply, while exports rose only marginally.

Also read | Raw materials, minerals push India’s exports to China but trade deficit a worry

The deficit fell to $15.6 billion in March, down from $18.71 billion in February, and $16.02 billion in January. This is the lowest it's been in 11 months—the last time the deficit was narrower was in April 2023 when it came in at $14.44 billion.

Significant disruption

“Industries heavily reliant on manual labour, such as textiles and apparel, shoemaking, and food and beverage processing, are more vulnerable to the operational challenges posed by heatwaves," said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI). "These sectors often face significant disruptions due to increased energy demands, leading to power outages that can hinder production processes."

However, the pharmaceutical manufacturing sector is unlikely to be significantly impacted, as it typically maintains a controlled working environment.

“The heatwave is for a shorter span in the country and the strong demand trajectory will easily sustain its impact," Sanjeev Agrawal, the president of PHD Chamber of Commerce and Industry.

Moreover, in the heatwave, demand for FMCG (fast-moving consumer goods) products increases and compensates for some losses in the other manufacturing activities, Agrawal added.

The IMD predicted that eastern India will experience a heatwave for the next three days and sounded a red alert in Gangetic West Bengal for three days and in Odisha for two days. The IMD attributed the severe heatwave conditions to less frequent thunderstorms in East and Northeast India.

Also read | Heatwave alert in India till May 5! IMD predicts rainfall in THESE states. Check full weather forecast here

 

 

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