FMCG companies stepping up production under eased norms but labour, supply chain issues impede

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Published: April 20, 2020 6:55:47 PM

“Factories of Patanjali and Ruchi Soya were operational even during the lockdown because we operate in food and essentials. However, there were issues regarding transportation and supply chain etc during lockdown, which I expect to ease out slowly,” Yoga Guru Ramdev told PTI.

FMCG, Patanjali, Ruchi Soya, dabur, MSME, parle products, lockdown, Dabur India, FMCG industry, Dabur factories,COVID cases , ITCThe recent guidelines issued by the Ministry of Home Affairs have definitely helped ease the situation as we go forward.

Major FMCG players are trying to maximise production with the easing of regulations on opening of factories outside municipal limits by the government from Monday in the extended phase of lockdown despite continued constraints of manpower availability and supply chain issues.

Companies like Patanjali, Ruchi Soya, Dabur and Parle Products that have been operating their plants in a scaled down manner during the first phase of lockdown with limited workforce suggested giving manufacturing permission to their several suppliers, which are mostly MSMEs and fall within the city radius, as it is affecting smooth functioning of the supply chain.

“Factories of Patanjali and Ruchi Soya were operational even during the lockdown because we operate in food and essentials. However, there were issues regarding transportation and supply chain etc during lockdown, which I expect to ease out slowly,” Yoga Guru Ramdev told PTI.

According to him, Patanjali witnessed almost two to three fold jump in the demand of its several products and expected that supply of such products would be increased in the market going forward. Similarly, Dabur India Executive Director-Operations Shahrukh Khan said, “Almost all of Dabur’s factories are operational today, producing a range of ayurvedic medicines, hygiene products like hand sanitisers, hand wash and daily essentials, with strict implementation of SOPs for social distancing at offices, workplace, factories, proper sanitization of buildings, factories.”

He further said, “We are now trying to maximise production, given the supply chain constraints, and material and manpower availability. The recent guidelines issued by the Ministry of Home Affairs have definitely helped ease the situation as we go forward.” Khan also suggested manufacturing permission to its several suppliers, which are mostly MSMEs and fall within the city radius, as it is affecting smooth functioning of the supply chain.

“It is our request that companies that do not have any instances of COVID cases may be permitted to operate even if they fall within the radius of a hot spot, provided they adopt and implement all safety protocols and screening measures, and follow social distancing norms. This would ease the pressure on the supply chain and ensure timely production and delivery of essential goods and hygiene products to consumers,” he said.

“It is also encouraging that the government has recognised the importance of ensuring that key manufacturing and distribution activities ume given its impact on the economy and livelihoods,” an ITC Spokesperson said. It will continue to focus on manufacturing its essential items like food products, hygiene essentials as well as paperboards and packaging solutions in select factories.

“As a company which is currently manufacturing essential items like food and hygiene products, we have ramped up production across 100 factories which are now operational with the highest protocols of hygiene and safety. With the help of state authorities and local communities around our factories, we have been manufacturing such essential items and progressively endeavouring to service the growing demand,” the spokesperson said.

Parle Products Category Head Mayank Shah said that food was exempted and factories were open but at a reduced capacity of around 40-45 per cent following the restraint imposed by the government on the number of workforce. “There would not be much change on the production part but in the supply side and availability of workforce would improve further,” said Shah, adding that “even in the market as my distributor, whose labour was not coming, this would change because of this.

” He further said, “Now more people would go out to work and it would infuse certain confidence in those who were not willing to work. It would increase further availability of the workforce.” Capital Foods , the parent company of Ching’s Secret and Smith & Jones brands, said it has received permission to operate its plants.

“We have received the nod to operate all our plants and barring one, all are operational too. Our swift understanding of the challenges elaborated above made us move quickly. Within 48 hours of receiving nod, our first plant was operational and we are currently operating at around 60-70 per cent capacity across all our products,” said Capital Foods CEO Navin Tewari. However, he also raised concerns over availability of labour force, which has migrated after lockdown.

“Migration of workers and restrictions on the movement of people across cities or towns have created a dent on the availability of human resources,” he said, adding “to overcome labour availability challenges, we are housing some of them inside the plants taking care of their lodging, food, hygiene, and entertainment. That has eased some of our challenges yet a lot of ground needs to be covered.” CG Corp, which sells Wai Wai noodles, is also trying to resume production in all of its manufacturing plants across India.

“However we are running at reduced capacity currently as we are still trying to ensure better attendance at the plants. Truck availability will improve and distribution within cities will smoothen out, which will in turn help our teams replenish stocks and bridge the gap between demand and supply,” said CG Corp Executive Director Varun Chaudhary.

Comments from other major FMCG players such as HUL, Nestle and Emami could not be obtained as most of them are maintaining a silence period ahead of their quarterly results. The FMCG industry has also assured adhering to the Standard Operating Procedure (SOP) issued by the government during the extended lockdown and abide by the restrictions such as number of workforce and take all safety measures.

“A series of safety measures have been reinforced at our units, which include thermal screening of employees during entry and exit at the Security Gate; ensuring that employees follow a queue, adhering to the social distance norms; fumigation of all areas with disinfectant on a weekly basis; and restricting the number of employees travelling together in elevators, to name a few,” said Khan of Dabur.

In fresh guidelines issued on last Wednesday for enforcing the second phase of the coronavirus lockdown, the government barred all kinds of public transport and prohibited opening of public places till May 3. However, it allowed functioning of industrial units located in rural areas from April 20 while observing strict social distancing norms.

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