Two weeks of the ongoing 21-day lockdown are over and there is a consensus that the sudden halt in economic activity has severely crippled industries across the board, including the packaging and label industry. As earlier reported by Packaging South Asia, only 10% of the Indian label printing industry is working at the moment, and according to Venugopal Menon of Bobst India, the Indian carton industry is also in a similar condition.
As per Menon, almost all the folding carton plants were shut post the announcement of the lockdown. However, a few days into the lockdown, there were requests by many end-users, especially in the food, pharmaceutical and personal hygiene segments for suppliers to keep the production and supply chain on. Some of Bobst India’s customers have also been trying to get permission from local authorities to start operations to cater to packaging for essential goods, Menon says,
“Some have been successful in partially starting up operations, mostly one shift with minimal labor. But the main challenge faced by the convertors is to contain and manage the safety of their employees which is a priority. Also, there are other challenges like inadequate logistics, lack of raw materials and maneuvering local authority guidelines. Because of all these factors, I would estimate not more than 10 to 15% of the carton industry has been able to function at present,” he says.
Operations at Bobst India plant near Pune has also come to a full stop. The company has followed the government guidelines and has kept the safety of its employees and their families, paramount. Bobst Pune plant has been shut since 23 March and, according to Menon, it is expected to open once the lockdown is eased post 14 April.
“Thus, our operations are shut except for some emergency service interventions which we try to cater at the local level on case to case basis, but we have been supporting our customer through telephonic support since lockdown,” says Menon.
Impact in short to medium term
Menon believes the lockdown will have an impact on the economy in the short to medium term, however, its impact will vary depending upon the industry segment one caters to.
“The carton industry will have an impact since almost one month of sales is lost. Making up this loss in the coming months will be a challenge,” Menon argues.
Post lockdown and opening of the market, he expects an influx of orders for the packaging industry from the FMCG, food and pharmaceutical industries due to backlog and depletion of stock at the end-user level.
“But it remains to be seen how the industry will fare once order backlog is cleared. Also, a lot will depend on how discretionary spend by consumers will affect the sales of various goods in the coming quarters. We strongly feel that pharmaceutical exports which had been curtailed by the government in some categories will open up and also a global shortage in generic pharma where India is a major contributor could witness a possible upsurge in the coming months,” Menon states.
In conclusion, Menon said everything will ultimately depend on the spread of coronavirus in India.
“If India can contain this spread of the virus in the coming months and we do not let it explode beyond control then we can expect the economy to bounce back quickly. We can only hope for the best and remain optimistic in these unprecedented and uncertain times.” he says.