Lack of clarity on operations in the wake of lockdown measures coupled with manpower shortage has disrupted operations of FMCG majors like HUL, ITC and several others resulting in full-fledged factory closures to limited manufacturing of even essential items.
Both HUL and ITC, on Friday said that its operations have been hit owing to the lockdown imposed to contain the spread of Coid-19 and joined its peers like Marico, Nestle, Dabur, Emami and others.
In a regulatory filing with the BSE, HUL said that owing to the 21-day lockdown to stem the proliferation of Coronavirus, operations in many of its manufacturing, distribution centers, warehouses and extended supply chain partner locations have been disrupted.
“We have had to scale down and suspend operations in most of our operating locations,” HUL said.
Sources said in some locations, production of even essential items have been hit partially or wholly.
The same has been the case with Nestle and Marico as well which has either scaled down operations or suspended the same.
While putting a hold on cigarette manufacturing – its largest revenue earner, ITC has decided to keep production lines of essential items like atta, noodles, biscuits, snacks, soaps, sanitisers and other products running although at low capacity with limited workforce.
Apart from the factories manufacturing essential items, ITC has suspended operations at its factories and plant locations across the country.
“We have obtained necessary permissions in some states for manufacturing essential items and for the transportation of essential products from the factories, warehouses as well as for distribution of products to the retail outlets. Truck movement both for inter-state and local movement has been impacted and will take a few days for the entire eco-system and processes to fall in place for movement of essential goods,” an ITC spokesperson said.
Dabur too has suspended operations across its manufacturing units except for essential products like Ayurvedic medicines, Chyawanprash, hand sanitisers, hand wash and other items.
An industry official said that while companies are keen to keep manpower in the factories at the lowest level possible to maintain social distancing, it is faced with shortage of staff in every level of the manufacturing and distribution process.
“More clarity and support from various state governments and local administration is needed to ensure more smoothness in the system. While there is some clarity from some of the local administration and passes are being issued in some areas, it is not happening across the country coherently which is disrupting the supply and distribution chain,” the official said.
Marico has said that its distribution network has been significantly impacted.
Industry officials unanimously said that seamless truck movement both inter-state as well as within states is the major issue companies are faced with on the distribution side and last mile connectivity issues has to be ensured to avoid any scarcity on the retail front.
“While there is some collaboration from some of the local administration including issuing passes for movement of goods and workers, more attention is needed from the authorities,” a second industry official said.
Most of the FMCG firms, including HUL, ITC and others said that it is working with several government authorities to enable continuity of operations at manufacturing and distribution locations.
“We are working with state authorities and local administration to ensure that manufacturing and distribution activities continue uninterrupted with bare minimum people,” an ITC spokesperson said.
Various states in the country are issuing passes for factory workers and others engaged in the distribution network as well as for e-commerce players.
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