Companies

Lockdown impact: Packaging-material makers face challenges on the ground

Meenakshi Verma Ambwani New Delhi | Updated on April 03, 2020 Published on April 03, 2020

Difficulty in getting local approval, shortage of trucks and manpower, among challenges

While the Centre has urged State governments to allow manufacturing and transportation of essential products during the lockdown, the packaging materials industry that caters to such companies is facing key challenges on the ground. The industry, which caters to packaged food and pharmaceutical companies, said that not being able to get timely approvals for operations as well as shortage of trucks and manpower have emerged as key bottlenecks.

A senior executive said that local authorities in many States are not understanding that production and transportation of packaging materials and other raw materials are important to maintain the supply chain of essential goods, despite the Centre’s guidelines.

Pankaj Poddar, CEO, Cosmo Films, said: “The government has allowed food processing companies and pharma companies to operate, though they, in turn, are dependent on their raw material and packaging material suppliers. Their suppliers too are, in turn, dependent on their supply chain. This entire supply chain is broken currently due to shortage of labour, packing material, trucks etc and the government must react quickly to this situation or else we may have serious supply shortages by the third or fourth week of April.”

“At our Gujarat factory, for instance, we are manufacturing about 10 per cent of the overall capacity in line with the government directives, but we are barely able to dispatch one per cent of the production to our customers,” Poddar added.

Vendors too hit

Executives also said even if packaging material companies get approvals to operate their plants, their raw material vendors are finding it difficult to get local level approvals to operate. In addition, the process of issuing e-passes manually for workers by various local level officials has become time-consuming.

Deepak Ganjoo, Regional Vice-President-Africa, Middle East and South Asia, Essel Propack, said, “Giving approvals is not enough to maintain the supply chain of essential products, ensuring availability of resources, in terms of availability and movement of raw materials and manpower, is equally important. There is a lot of ambiguity in the way State and their various local departments are interpreting the Central government advisories.”

Industry players also said reverse migration of workers as well as fear of health and safety among workers are other key challenges.

Rajesh Bhatia, CFO, UFlex Ltd, said the government needs to disseminate information to local level authorities on maintaining the supply chain ecosystem for essential goods, with the same intensity, as it is communicating other measures related to the lockdown.

Senior executives also said that the government should let companies decide on the number of workers that need to be allowed to work in a manufacturing unit for effective operations.. 

Published on April 03, 2020

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