How FMCG major Marico is dealing with Covid-19

The Covid-19 pandemic followed by the nation-wide lockdown announced by the government resulted in significant disruptions in the business and operations of the company said FMCG major Marico Limited on Friday.

The last week of March and the first fortnight of April this year witnessed significant disruptions in the business and operations of the company, it said in a regulatory filing.

The company resumed operations in its edible oils and foods businesses in early April, as servicing of food and grocery items of daily use were permitted by the government. The hair oils and personal care operations resumed in late April to early May.

“With the situation gradually improving, the month of May saw a near-normal throughput in all the categories except the premium personal care business. The company continues to evaluate the impact of the pandemic as the situation evolves,” it said.

Although there have been intermittent challenges on labour availability caused by a mass exodus of migrant labour to their hometown in the past few weeks, the company is mitigating this risk through an alternate arrangement for sourcing labour as well as augmenting additional capacities, it said.

It has also adopted emerging technologies like video analytics, artificial intelligence along with the contactless automated screening of all its members to ensure adherence to the physical distancing and safety protocols in factories, it said.

Supply chain

“The early disruptions caused in the supply chain are being partially countered as the company has adopted newer and alternate models like directly supply to distributors and large modern trade stores thereby compressing the supply chain time,” it explained.

When it comes to distribution, to improve the reach of food and grocery items of daily use to the consumers, the company adopted several approaches which included tying up with food-service aggregators and other logistics partners, launching a direct to consumer portal, tele-caller facility for direct reach to the top retail outlets and introducing a retailer and consumer-ordering app, among others.

The company has also been focused on a digital transformation journey to enhance consumer engagement, drive sales through e-commerce and build data analytics capabilities for faster and efficient decision-making across the value chain.

The company’s overall business has experienced gradual improvement from the mid of April to till date and is currently clocking more than 90 per cent of the FY20 average monthly sales, it said.

As the company continues business and operations even during the lockdown period, albeit at a relatively reduced scale, there has been no significant impact on its liquidity position and hence is in a comfortable place to meet its commitments, it said. It continues to drive profitable operations and enjoys a comfortable net cash surplus situation, it added.

Marico is watchful about the future as it unfolds and much will depend on the extent of the spread of Covid-19 in India and overseas and how the on-ground environment develops in conjunction with the response of respective Governments, it noted.

“The company expects to witness changes both, in the business environment as well as consumer sentiments, but at the same time believes that it is well positioned to come out stronger from this crisis on the back of innovation, agile execution, prudent cost management and portfolio of trusted brands,” it said.

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