Companies

Covid uncertainty: Consumers may stock essentials for 15 days, instead of 7, says Adani Wilmar

Rutam Vora | Updated on May 15, 2020

This could push up demand for bulk packs

The lockdown has impacted the demand pattern for Adani Group’s FMCG arm, Adani Wilmar Limited. Considering the uncertainty around Covid-19 spread and the government’s containment measures, consumers may increase stocking period of essentials and staples from seven days currently to 15 days.

“Sales had picked up from mid-March till April 1. By then the consumers had stocked up their monthly groceries. We saw demand picking up again from April 25 till May 3, after which sales have come down. But over the last two days, we are finding demand coming up and from May 15 onward, we see it picking up,” said Angshu Mallick, Deputy CEO, Adani Wilmar Limited, addressing a media video conference.

“As there is still uncertainty over the normalisation, the stock-up period for consumers may go up from the seven days currently to 15 days. So, demand for bulk packs will also be seen as a result,” said Mallick.

Uninterrupted supply

Adani Wilmar, which sells its food products under the Fortune brand, recently launched sulphur-less sugar in consumer packs of 5 kg in the Eastern markets of West Bengal, Jharkhand and Odisha, while it plans to cover North and West in the subsequent months. This completes the portfolio of staples for Fortune, which already has rice, wheat, dals and aata, besides range of edible oils.

The company stated that it was working hard to keep all its plants operational to ensure that there is no shortage of edible oil and food products in the market. It has managed to ensure uninterrupted supply of edible oil and food products in the market even though almost half of its plants, including those in Surat, Khargone in MP, East Godavari, Kurnool, Nellore and Dakshin Kannada districts, are in the Covid-19 hotspots, said Mallick.

“At this point of time, our responsibility is to keep our factories running and ensure there is no shortage of edible oil and food. We are handling enormous volumes of about 3 million tonnes of edible oil coming to our factories, we process it and pack it to transport for market,” said Mallick, adding that capacity utilisation across plants had declined to 50 per cent immediately after the lockdown was announced.

The impact on capacity utilisation was primarily because of logistical issues, unavailability of raw materials, and worker shortage. With several easing measures by the government, plant utilisation has improved to 70 per cent now.

However, currently, Adani Wilmar is facing some operational challenges in terms of availability of truck drivers, raw material and packaging material. This is a fallout of migrant workers returning to their home towns following the lockdown.

Transporting through train

“Our suppliers are also facing the same issues, i.e. shortage of workers, logistics, and raw material availability. However, we are working closely with them to sort out these issues at the earliest,” he informed.

In order to reduce its dependence on the road network, Adani Wilmar has increased transportation of products through trains. The company is using mini rakes with capacity of 1,000 tonnes, instead of the full rakes of 3,000 tonnes capacity to transport limited production and dispatch capacity.

Published on May 15, 2020

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