10% of the Indian label industry is operational during the lockdown

Labels in the time of Coronavirus

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Labels for essential goods can be produced during the lockdown
Labels for essential goods can be produced during the lockdown

The 21-day lockdown announced by the government which came into effect on 25 March has severely impacted economic activity across sectors. India’s label printing industry has also been impacted despite many companies having received permission to print label that would be used in essential goods such as medicines and hand washes, among others. As per major industry players, currently only about 10% of the Indian label industry is functioning.

“As of now what we have gathered is that only about 10% of the label printing industry is operational. Also, the companies which are working are operating with only 20% staff. Obviously, printers are supplying only those type of label which are used in essential goods,” says Ajay Mehta of SMI Coated Products.

According to Mehta, lot of companies have obtained permission from authorities to start operations but are unable to do so because of lack of transportation and also because workers are unwilling to venture out of their homes because of concerns about their health.

SMI Coated Products is one of India’s leading suppliers of label stock and has its manufacturing base in Ambernath.

Rahul Kapur of Mumbai-based label solutions provider, JK Labels, says label printers are facing some challenges when it comes to starting work. His company is not operational at the moment.

“As a company we are mindful of the gravity of the situation and will only resume once things begin to normalize. Even if one gets permission from local authorities to manufacture labels for essential items during this lockdown, one has to consider various aspects that would create hurdles in running operations at the moment,” Kapur adds.

Kapur says in addition to unavailability of public transport for workers, label printers are finding it difficult to source all the raw materials required for production of goods, as very few vendors are functioning at the moment.

Manish Desai of Mudrika Labels also estimates that about 10% of the industry is functioning at the moment. Vasai-based Mudrika Labels is not operating at present.

“Mudrika Labels is not functioning at present although we have obtained all the necessary clearances required. We will start only if there is some urgent requirement by our customers,” Desai says.

Things will take time to normalize

By all indications the 21-day lockdown is expected to be lifted on 14 April but things in the label printing industry may take some time to get back to normal.

“There will be a lot of issues to deal with once the lockdown is lifted. Quick return of workforce to factories will be a challenge as they may feel hesitant to get back to work so soon given the fear of infection. There will be other financial issues as well. Things will become clearer in the coming weeks,” argues Mehta.

Desai of Mudrika Labels feels cash flow and liquidity will be a big issue for companies after three weeks of shutdown. He feels the industry may take 8-12 months to get back to normal.

Kapur of JK Labels is of the view that sectors such as the pharmaceutical, food and beverage and personal care industry will continue to give steady business. However, sectors such as automobile, that were already going through a rough period prior to the lockdown, will take a long time to recover and give the kind of business it used to give during its prime.