FMCG firms face logistics troubles
nNEW DELHI: Fast-moving consumer goods (FMCG) companies said they have received approvals for their facilities, and are in the process of resuming production, albeit at limited capacities, even as the government moved to ease the supply of personal hygiene products. However, the supply of packaged essential goods could take a few more days to stabilise as the availability of manpower, and goods transport to market, pose challenges.
On Sunday, the Union home ministry clarified that groceries, which are considered essential commodities, also include hygiene products such has hand wash, soap, disinfectants, body wash, shampoos, detergents, and tissue papers, toothpaste, sanitary pads, and diapers, chargers, and batteries. This allows for production of such items.
“The central government’s decision to include diapers and sanitary pads in essential goods has helped us open our manufacturing unit in Nasik. However, at present, we are working on 20-25% of our capacity,” said Kartik Johari, vice president, Nobel Hygiene, the maker of adult diapers Friends and baby diapers Teddyy.
However, getting approvals for manufacturing is only the first step, especially as the movement of products remains restricted because of the paucity of trucks and, the lack of manpower and misinterpretation of the Centre’s orders at the local level, companies said.
“While we have progressively obtained permissions in some states, the availability of trucks continues to be the biggest challenge at the moment,” said a spokesperson for ITC.
“Interstate and local truck movement has been very severely impacted. There is also a challenge of shortage of manpower in factories. We believe it will take a few more days for the entire ecosystem and processes to be streamlined for the movement of essential goods,” the spokesperson said.
Supplies of home and personal hygiene products will start improving over the next week, said analysts who track the sector.
“With the easing in the supply chain, we expect inventory movement to return to normal next week. However, the big challenge for FMCG companies is to resume production and deal with the shortage of manpower,” said Nitin Gupta, analyst, FMCG, SBI Caps.
Several FMCG companies said they have temporarily suspended or scaled back operations at plants and warehouses, following the three-week lockdown announced by the government that began on March 25. However, the production has resumed at some plants.
Last week, Godrej Consumer Products Ltd, which makes a range of goods including hair colours, soaps, and mosquito repellents, said operations in several of its locations such as manufacturing units, warehouses, and offices, were scaled down or shut down. However, the company said it is seeing some progress on the ground.