Packaging industry faces disruption in supply chain, labour shortage

Packaging material industry is operating much below its installed capacity as it faces issues in supply lines and shortage of manpower due to the lockdown, according to industry officials

Industry officials said that the packaging industry is operating below installed capacity due to restrictions and acute shortage of manpower besides disruption of supply lines. Source: Reuters

The packaging material industry is operating much below its installed capacity as it faces issues in supply lines and shortage of manpower due to the lockdown, according to industry officials.

According to leading packaging industry players such as Uflex and Cosmo Films, though the government has allowed the companies operating in the food and Pharma sector, these firms are dependent on packaging materials supplied by them, which is not being able to operate due to restrictions.

Some organised retailers have pointed out that the new batches of the FMCG products, manufactured after the lockdown, lack standard packing format and this is mainly because of disruption in the supply of packaging materials.

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"There could be a shortage of food packaging material with these companies. They would be facing problems in sourcing other raw material also because the whole ecosystem is disrupted. Yes but for the packaging, I can say that there is disruption. In our industry, we find that many people are not operating,"?UFlex CFO Rajesh Bhatia told PTI.

Meanwhile, industry officials said that like other industries, the packaging industry is also operating below installed capacity due to restrictions and acute shortage of manpower besides disruption of supply lines.

"I know a few competitors in our industry, who opened up but later because of labour shortage and transportation issues, they closed down, as they could not operate," said Bhatia.

Expressing similarly views Cosmo Films CEO Pankaj Poddar?said there has been a significant disruption and transportation of packaging materials and other raw materials and it is also important to maintain the supply chain of essential goods as they are dependent on it.

"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 dependent on their supply chain. This entire supply chain is broken currently with shortage of labour, packaging 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," said Poddar.

Speaking?about the industry, Bhatia said it is also facing the issue of passes issued by the local authorities for its workers.

"There are problems with passes as well. When you open a factory, you need passes also. Supposedly, a factory which is working with 2,000 people and only 30 to 40 passes are being given, obviously it can not operate.

"Today, we may be around 20 to 30 per cent of our capacity. However, if you can take the labour constraints and transportation issue, we can do a much better job. Hopefully things will settle in a few days," he added.

However, he also assured that despite all constraints, the company would continue to operate and do "whatever best it can do" in such circumstances.

"We are also trying to do our best, whatever we can do in the present circumstances and constraints. We have opened our factory in Jammu and there we have limited man power. We have to maintain social distancing also," added Bhatia.

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India is presently going through an unprecedented complete lockdown of three weeks, ending on April 14, to prevent the spread of the virus.

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