The demand for consumer goods, especially essential items, has skyrocketed in the past 2-3 weeks, as people in the country self-quarantined to prevent the spread of the coronavirus. For companies that manufacture these essential goods, it has meant a high surge in demand, even as manufacturing facilities run on thin resources.
However, adding to existing challenges, companies such as ITC, Hindustan Unilever, Britannia and Parle have been facing issues with authorities in some places closing down factories and disrupting the supply chain by stopping trucks and curbing interstate movements.
While the government has said that essential goods, which includes food, grocery and dairy, among others, can be transported, local authorities seem to be unclear on what constitutes essential items.
Mayank Shah, senior category head at Parle Products, which makes Parle G biscuits, snacks and even pulses under ‘Fresh Harvest’ brand says that the government and local authorities are interpreting the term essentials differently. “While in most places we are able to run factories, we are facing disruption in many more. We are currently talking to authorities to get them started,” Mayank adds.
Britannia too, says that while the Central government has issued all necessary permissions, the immediate need of the hour is that it be percolated right down to the district authorities. “This will help us kick start production and ensure an uninterrupted supply of essential packaged foods throughout the country,” Varun MD of Britannia Industries says.
The larger issue, however, is the disruption in the supply chain as procurement of raw materials is key to production.
Mayank says that there are issues across the supply chain that make production also an issue. “For example, they may view packing material as non-essential, but you cannot sell things if you can’t pack it,” he adds.
In the food industry, Varun says, the supply chain is disaggregated and dependent on inter-state movement of goods. “If even one link in the supply chain is broken, the country could run out of stocks of packaged food in the next 7-10 days. Thus, it is imperative that the supply chain for food products be restored in entirety and allowed to function with adequate safety measures and police protection,” he adds.
The supply chain includes suppliers of raw materials and packaging materials, food manufacturing factories, factory workers, transporters carrying materials and finished goods, depots, wholesalers, distributors and their salesmen.
ITC, too, has said that it is critical during these challenging times to ensure that the production and supply chain for essential items is not disrupted so that items like food and hygiene products can reach consumers across the country. The company has said that truck movement both for interstate and local movement has been currently impacted. It will take a few days for the entire ecosystem and processes to fall in place for the movement of essential goods.
ITC makes food items such as Ashirwad Atta, Yippee noodles, biscuits, and other packaged foods and personal care products such as soaps, handwashes under brands such as Savlon.
“While we have obtained necessary permissions in some states, we are in discussions with other state government authorities to seek clearances from local authorities for the transportation of essential products from the factories, warehouses as well as for distribution of products to the retail outlets,” a company spokesperson added.
Hindustan Unilever, too, said in a statement to PTI on Wednesday that there has been a significant amount of difficulty in running factories and transporting goods, adding that clear instruction should be given so that the supply of essential items run smoothly.
HUL manufactures and supplies essential day-to-day products such as soaps, hand sanitizers, laundry detergents, floor cleaners, disinfectants, foods, etc.
“We are making every effort to produce and bring to the market these products in an uninterrupted manner. We acknowledge the efforts being made by the authorities to reduce the impact of the disruption caused by COVID-19. We are working closely with government authorities to enable the distribution of essential goods throughout the whole of our nation,” a company spokesperson told TNM.
Mayank too, says that finished goods have to be transported for which a depot owner or a distributor should be allowed to operate otherwise stocks will not reach the market.
He adds that clarification is slowly coming and hopes that issues will smoothen out in a day or two.