Labour unrest could spoil Noida's image as handset hub

Repeated labour unrest in the Noida-Greater Noida belt is worrying manufacturers. Companies operating in the manufacturing hub for mobile handsets are taking note of recent industrial disputes.

Companies that Business Standard spoke to said while minor disputes were part of any manufacturing activity, volatile conditions were not favourable for long-term growth of the region. During the week, two such instances rocked the region. A group of workers vandalised Vivo India’s facility on Tuesday after the firm sacked over 50 people without notice. The protesters forcibly entered the premises and caused damage to plant and machinery.

On Wednesday, employees of automobile ancillary company Majestic Auto went on an indefinite strike at its plant in Greater Noida. The firm has allegedly sacked eight employees. In July 2016, a protest broke out in the manufacturing unit of durables major LG India in Greater Noida. In March this year, Chinese handsets major Oppo faced labour unrest at its Noida plant.

“This is becoming a major issue. We are taking stock of the situation and are engaging with employees so that no such instance occurs at our facility,” said an executive with a mobile handset manufacturing company that has a unit in the region.

Differences between workers and managements have arisen over reasons ranging from pay increases to canteen food to working conditions. 

“We are planning to hold a meeting of all key manufacturers in the region and draw up strategies to handle such situations,” said the country head of another handset manufacturer.

The Noida-Greater Noida belt houses nearly 25 handset facilities with a cumulative production capacity of 180 million units a year, nearly two-thirds of the total demand in India. Market leader Samsung, which has its largest manufacturing unit in the region, has a capacity of 40 million units a year. Homegrown handset makers like Lava and Intex recently expanded their capacity in the region to 66 million units.

Vivo India, which has emerged as the third-largest smartphone player in 2017, set up its unit in Greater Noida in December 2015. The company  was planning to increase its capacity to one million units a month, Alex Feng, former chief executive of Vivo India, had said last year. Oppo India had to shut down its unit in March after workers turned violent over the tearing of the national flag by a Chinese executive. The matter was settled after the company sacked the executive.