FMCG majors across the country have managed to reach 50-60 per cent operating capacity levels. While supply chains operate at 50 per cent levels, availability of labour continues to be an issue.

Market sources said despite the restrictions and coronavirus-induced lockdown, there has been a steady improvement in conditions across manufacturing and distributor segments. Companies have roped in local communities, too, for work.

Things have moved far better with utilisation being at 50 - 60 per cent levels; while supply chain is back closer to 50 per cent levels, said sources adding that demand for essentials was never an issue. Stock-outs at retail stores continue to be the worry.

FMCG majors are also in talks with State governments and local authorities to start operations of some non-essential product lines that may find daily use. For instance, coconut oils fall under essential category, but not the value-added hair oils.

“Currently, utilisation is around 50 per cent levels. It should improve given the relaxations. If the list of essentials includes more categories, then utilisation could move up further over the next two weeks. But, all these depend on the number of Covid positive cases,” Abneesh Roy, Executive VP, Institutional Equities Research, Edelweiss Securities, told BusinessLine.

Edelweiss in a report maintained, stringent norms under which manufacturing should happen “does not seem onerous” for large FMCG companies since internal manufacturing guidelines remain robust. Thus, “with limited cap-ex and op-ex, these large FMCG companies are able to adhere to Government’s regulation”. This will help such companies reach out faster to market places.

Ramping up

Eveready, the country's largest dry cell battery-maker, said it has already received permission for operations at its manufacturing facilities in Lucknow, Hardwar and Matia, subject to certain guidelines inclusive of maintaining a minimum number of people.

While the Lucknow and Hardwar facilities are “partially operational” in a gradual and phased manner, “the manufacturing facility at Matia (Assam) would be partially operational in a few days,” it said in a notice to the bourses.

ITC has ramped up production across 100 factories. “We have ramped up production across 100 factories which are now operational with the highest protocols of hygiene and safety. With the help of State authorities and local communities around our factories, we have been manufacturing essential items and progressively endeavouring to service growing demand,” an ITC spokesperson said.

Dabur India said all its factories were operational. According to Shahrukh Khan, Executive Director –Operations, the company is now trying to maximise production given the supply chain constraints, and material and manpower availability.

“Almost all of Dabur’s factories are operational today, producing a range of Ayurvedic medicines, hygiene products such as hand sanitisers, hand wash and daily essentials, with strict implementation of SOPs for social distancing at offices, workplace, factories, proper sanitisation of buildings, factories, etc,” he said.

Supply issues

Khan pointed out that the forced closure of some factories of “suppliers and their suppliers” (referring to the supply chain) – mainly the MSMEs – for key products like hand sanitisers, as they fall within the hot spot radius, is affecting smooth functioning.

“It is our request that companies that do not have any instances of Covid cases may be permitted to operate even if they fall within the radius of a hot spot, provided they adopt and implement all safety protocols and screening measures, and follow social distancing norms. This would ease the pressure on the supply chain,” he added.

Similarly, easing of restrictions, particularly in the agricultural sector and transportation, should help in streamlining the supply chain. It will “progressively prepare for a recovery stage,” the ITC spokesperson said.