Availability of workers still a challenge, say FMCG cos

Several FMCG players on Wednesday flagged the issue of manpower shortage and transportation curbs, even as they welcomed the government's decision to allow manufacturing operations in rural areas from April 20.

With the exodus of migrant workers back to their villages following the imposition of the nationwide lockdown, most food companies are operating at only 15-20 per cent of their capacity, they said.

Companies such as Marico, ITC and Parle hailed the government's move to ease restrictions on agriculture, transportation and other segments.

"Although the government has allowed factories to function at 50 per cent of manpower, we are able to function only at 15-20 per cent capacity. Manpower is still a huge challenge.

 

"With the new guidelines there is a possibility that few (workers) would actually come back to work. If that happens, then we can ramp up our capacity to at least 30-40 per cent. That could ease out the situation in the market,"Krishnarao Buddha, Senior Category Head at Parle Products told PTI.

Currently, there is shortage of supplies of food products, he added.

The government is encouraging manpower to go back to work, under strict hygiene and safety guidelines, and companies can make facilities for workers to stay at factory premises to avoid daily transits, Buddha said.

Capital Foods, maker of Ching's Secret brand of packaged foods and condiments, said though the supply chain is improving every day, availability of labour is a problem.

"I have heard that manufacturing activity is allowed outside the municipal limit but the thing is people are not allowed to move. How will the workers who have left come back? It should be looked in also," Capital Foods CEO Navin Tewari said.

Marico MD and CEO Saugata Gupta said: "Given that production facilities are away from city centres and the identified hotspots, we are optimistic that the availability of manpower and supply chain operations will progressively improve over the course of time, with the Central Government also taking facilitative steps in that direction."

CG Corp Global, which manufactures instant noodles Wai Wai, said it is also facing the issue of under-utilisation of capacity due to shortage of workforce.

"We are under continuous pressure due to several factors such as under-utilisation of capacity due to shortage of workforce in factories, along with incurring extra transpiration cost due to hindrance in movement. However, we will continue to look for ways and means to sustain a minimum operation level to ensure continual supply of Wai Wai to the people," CG Corp Global Executive Director Varun Chaudhary said.

ITC said that easing of restrictions, particularly in the agricultural sector as well as transportation, should help in streamlining the supply chain and progressively prepare for a recovery.

"ITC will continue to focus on manufacturing its essential items like food products, hygiene essentials as well as paperboards and packaging solutions in select factories whilst adhering to the highest protocols of safety, hygiene as well as social distancing as recommended by the government," a company spokesperson said.

Several FMCG firms like Marico and ITC are taking the help of alternative last-mile logistical options, including direct-to-home delivery portal for consumers in select cities and partnering with food aggregators to ensure uninterrupted supplies of essential products.

In fresh guidelines on 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.

Prime Minister Narendra Modi on Tuesday announced the extension of lockdown till May 3 to contain the spread of Covid-19 infections.