‘MTR Foods is hopeful of achieving ~1,000-cr revenue target this year’

MTR Foods, a subsidiary of Norwegian conglomerate Orkla, had scaled up its production capacity much before the lockdown was announced. Because of that, the firm, which usually holds a 10-14 day stock, managed to double the inventory to address the crisis. The Bengaluru-headquartered firm’s Chief Executive Officer SANJAY SHARMA tells Samreen Ahmad that the consumer goods major will also focus significantly on leveraging e-commerce channels, going forward. Edited excerpts: How is MTR Foods running the show when most of the other branded packaged food products are not to be found in the market?

We started acting early, as the company is held by a Norwegian conglomerate and the Covid-19 crisis had hit Europe well before it reached India. A lot of prepreparedness plans were already communicated to us by our European counterparts. So we had started working on a plan by March 10. We started building up stocks. As compared to the average stock level of 10-14 days that we hold, we decided to hold an inventory for up to 30 days. The manufacturing cycle had already started working towards that. Currently, it has depleted to 10 days as the demand has increased.

What is the current capacity utilisation of MTR factories? How are you looking to scale up?

Currently our factories are working at 60 per cent capacity utilisation with just 50 per cent of our workforce. We have a unit in Pune which is in the Red zone, so for the past four weeks it has opened only for two days. We have seven contract manufacturers in places like Indore and Guntur which too are in Red zones so there have been major challenges to get these working.

There’s an on and off impact whenever there’s a new Covid-19 case detected in areas near our warehouses or factories which has disrupted the supply chain.

How is the company taking care of its employees’ health?

To a large extent, the factories have been quarantined. No outside person can enter the factories, including suppliers. We are following strict sanitisation measures, and have arranged transportation for workers.

They are picked up from their homes by buses that are sanitized after every trip. The buses are running at 50 per cent accupancy to avoid any contact. We are tracking everyone who is travelling by the buses and temperature checks are being done. We are operating in shifts, and those in first shift are not allowed to interact with those in the second shift. Also plants are sanitized after every shift.

What’s your plan for product launches this year?

On an average we do around 8-10 launches in a year. Even in the current year we have done two launches (hyperlocal spices) before the crisis hit us. Given the current situation, we have kept our innovations on hold at this point of time as we want to see what will be the new normal situation. The consumer life has significantly changed and demand for convenience goods is increasing as the workload at homes has increased. We have seen a lot of demand in basic spices and breakfast mixes. Interestingly, as sweets shops are shut, we are seeing a huge demand for gulab jamun mixes.

Will MTR Foods be able to cross the ~1,000-crore revenue mark this year given the current crisis?

We are currently over ~900 crore in terms of revenue, and it would be possible to touch the ~1,000crore milestone this year. If the situation stabilises fast and we are able to find an equilibrium between managing this crisis and managing the business supply chain, then I see no reason why we will not hit those numbers.

How will things change for MTR after the lockdown?

This is one of those events that will change the world substantially. Ecommerce is going to come out in a significant way, and it is going to be one of our top priorities that we will carry into the future. Our e-commerce sales almost doubled to 4 per cent in April as compared to last year as we tied up with companies such as Swiggy and Zomato to get our products delivered. Also, as eating out will reduce and consumption patterns will change, we will also have to align our business accordingly.