Lockdown impact: imported raw material scarcity hits FMCG goods production

While the Centre has stored the most important ports and the airports within the nation open to permit freight motion in instances of the continuing lockdown, restricted evacuation of imported raw material to factories is creating production hurdles for FMCG firms.

All FMCG corporations are already reeling below the strain of manpower curbs on the vegetation and absence of vehicles to ferry goods. On prime of it, they now need to take care of raw material scarcity.

ITC has been focussing solely on the production and provide of important gadgets like foodstuff and sanitisation merchandise after cutting down operations. Its factories have stopped making cigarettes in the intervening time.

HUL’s gross sales have dropped to 40 per cent of the same old day by day run price, after scaling up from low single digits within the final week of March. HUL’s factories are working at about 40 per cent of the required output.

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“Due to restricted capacity at the main ports in India, both for sea and air freight, we are facing a scarcity of import of material for which a locally-produced alternative is extremely difficult to find. We are working closely with the government and local bodies to try to ensure continued and uninterrupted supply of essential goods to the people of our nation in these difficult times,” an HUL spokesperson instructed Business Standard.

According to trade officers, the scarcity of raw supplies has not solely affected manufacturing of edibles however even of things like nozzle pumps, and different goods utilized in packaging.

“We are facing issues at ports, which is impeding the smooth movement of both imported raw material and exportable finished products. The clearing of import consignments and their movement is still sluggish,” Dabur India Ltd’s govt director–operations, Shahrukh Khan instructed this newspaper.

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According to officers at Shyama Prasad Mukherjee Port, higher often known as the (KoPT), the present cargo-handling capability stands at about 70 per cent and gadgets like prescribed drugs, edible oil, petroleum and LPG, coking coal and raw material for sanitisers are being prioritised for clearances.

Sources stated the state of affairs throughout the nation is almost the identical and due to the prioritisation and restricted workforce, some cargo clearances and unloading are getting delayed.

“The primary issue is that of manpower availability. The handling agents are trying to arrange for transporting the workers and maintain social distancing norms but at times, the availability of vehicles is limited,” an official at KoPT instructed Business Standard.

Around 90 per cent of India’s commerce by way of quantity and 70 per cent by way of worth is routed by way of maritime routes.

CARE Ratings stated that quantity within the ports declined to 63.17 million tonnes of cargo in March 2020 from 64.47 million tonnes throughout the corresponding month of earlier 12 months.

However, given the scarcity, whereas Dabur is taking a look at import substitution, firms depending on world sourcing like HUL are getting affected.

“We are aggressively looking at import substitution,” Khan added.

Queries despatched to Nestle, Marico and Godrej Consumer Products remained unanswered.

On the opposite hand, port officers are frightened that longer unloading instances could quickly result in congesting the port warehouses.

“However, with the revised guidelines in place, the situation is expected to improve as more plants become operational and more trucks can be loaded”, the KoPT official added.

Under the revised pointers from the union dwelling ministry, vegetation and factories in rural zones are allowed to operate with restricted workforce and below stringent working situations resembling capped manpower and correct sanitisation.

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