EBM News
EBM News

Exodus of migrant labourers throws FMCG supply chain into disarray

NEW DELHI: Adding to the woes of the fast-moving consumer goods (FMCG) industry, who are grappling with panic buying and dwindling supplies of fresh stocks, the exodus of migrant labourers across various states has led to a tardy production of essentials. Companies said they are working at a critical 20-25 per cent workforce with their third-party manufacturing units taking the worst hit. “Even as the movement of trucks has improved, the shortage of manpower is making it difficult to run operations.

The shortage in our 125 third-party plants is even more severe since they are mostly located in smaller towns and labourers have migrated from there first. Unless there is clear statement from the government that the disease is under control, labourers are unlikely to come back,” said Mayank Shah, category head at Parle Products. Britannia Industries is also facing a similar labour crisis. “We are evaluating how we can operate with fewer number of people as most of our workmen have got back to their villages. We are operating at only about 25 per cent of strength,” said Britannia managing director Varun Berry.

The company has set a target of 50 per cent for this week although it might be a “lofty target” given the workers are not willing to return for the fear of the virus spread.Shahrukh Khan, executive director, operations at Dabur India said availability of raw material and packing material continues to be a challenge with the restricted movement of trucks and this is hampering quick start-up of production of essential products. “The key issue, however, is the availability of workers to run these operations,” he added. R S Sodhi, managing director and chairman, Amul concurred.

“While our products are getting delivered to distributors, the latter are unable to deliver due to an acute manpower shortage. Labour is a huge problem. Due to the COVID-19 scare, a lot of them have gone home. This problem will persist for a few more days.” Meanwhile, distributors are now telling retailers, including kirana stores to arrange their own logistics as they are either running on skeleton staff or are still awaiting clarity on distribution operations from local administration. “We were not prepared for a 21-day lockdown. Currently, I have stocks of cooking oil, atta, Maggi, pulses and besan in my go-down but no labourers to load products or any people to deliver them. If they (retailers) have their own transport and delivery personnel, they can come down and pick up the goods,” said a Delhi-based distributor requesting anonymity.