As consumer goods companies grapple with supply chain challenges and shortage of labour at their manufacturing plants amid the ongoing coronavirus lockdown, there is yet another mounting concern. The short supply of packaging material could pose a big challenge for the FMCG companies.
Although the government has allowed factories supplying essentials and packaging materials to be operational, some clarity is still needed on the units supplying raw material to these packaging facilities.
“We are facing a hand-to-mouth situation for packaging material. There is uncertainty on whether the next batch of packaging material will reach us. Packaging units need plastic films for wrappers etc. and those smaller units are shut,” said an industry official.
Biscuit, chips, noodles and other packaged goods manufacturers typically order such packaging materials, including labels, wrappers, cartons, shrink packs etc., twice a week. The short supply of such materials can stall production further.
Owing to the coronavirus outbreak, several manufacturing units for essential food items are operating at about 30-40 percent capacity at present. Plastic manufacturers associations from almost every state are putting together a list of units of raw material suppliers to send to both central and state governments to ensure that manufacturing doesn’t come to a standstill.
Consumer goods manufacturers usually source this material from several hundred vendors all across the country.
“This could be a serious issue if not addressed at the earliest. We have been supplying packaged drinking water to hospitals and for other emergency services. Hotels and the travel industry have completely stopped sourcing packaged drinking water from us. Although our production is down by only 20-30 percent, we are facing big challenges in procuring prefroms for bottles,” said a manufacturer of packaged drinking water.
Last week, flour manufacturers had also raised this issue pertaining to a shortage of packaging material for bulk packing the commodity.
India is currently under a 21-day lockdown in a bid to contain the spread of the coronavirus pandemic. The lockdown will be in effect until April 14. All services deemed non-essential have been prohibited for the duration of the lockdown.