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FMCG production at 20-25%; not satisfactory, but better, says Nestle’s Suresh Narayanan

FMCG production at 20-25%; not satisfactory, but better, says Nestle’s Suresh Narayanan

FMCG production at 20-25%; not satisfactory, but better, says Nestle’s Suresh Narayanan
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By Priya Sheth  Apr 16, 2020 6:41:27 PM IST (Published)

The coronavirus outbreak and the supply disruption will take a toll on every business in the country, says Suresh Narayanan, Chairman and MD, Nestle India and Chairman of the CII National Committee on food processing industries. 

The coronavirus outbreak and the supply disruption will take a toll on every business in the country, says Suresh Narayanan, Chairman and MD, Nestle India and Chairman of the CII National Committee on food processing industries.

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"There was an enormous amount of chaos when the lockdown was initially announced. The situation on the ground is much better now," said Narayanan in an exclusive interview to CNBC-TV18.
Labour and transport have been the two major issues for the industry, but the recent clarifications by the government are helping, he said.
For most of the players in the FMCG industry, production capacity stands at about 20-25 percent. "E-commerce platforms have started operating now and retail spaces in metros are operational," said Narayanan. "We are not back to satisfactory levels, but we have come a long way," he added.
Most FMCG players including Nestle, are trying to keep costs to the minimum.
"Our hope is to keep every single job. MSME suppliers that we deal with need to be supported in the form of advance payments," he said, adding Nestle India is ensuring that the company's distributors get both salary and incentives for March.
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With businesses operating at limited capacity, companies have already flagged the impact on operations. Godrej Consumer Products is expecting quarter revenue decline “around high teens”
“We did see low double-digit sales decline in the performance of our distributors, implying that their stock levels are getting depleted. We are awaiting data on the stock levels on general trade shelves,” the company said.
Dabur too expects a “material impact” on production and sales will be material.
“This impact has been experienced in March and will continue till the lockdown stays during the current financial year," the company said.
Some measures that could help revive the smaller industries in the food processing space could be cheap working capital loans and loans for salaries.
For our entire COVID-19 coverage, click here
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