All FMCG firms hit as consumers continue to hold spending in a slowing Indian economy.
Mumbai: Manufacturers of consumer packaged goods like Hindustan Unilever Ltd, Proctor and Gamble, ITC Ltd and Marico Ltd are cutting back on production, extending the credit period to distributors and exploring ways to reduce costs and increase efficiencies as consumers continue to hold spending in a slowing Indian economy.
“Consumers are cutting back on consumption and non-essential purchases and the growth is nowhere near to what we were expecting,” said Vivek Gambhir, managing director, Godrej Consumer products Ltd, adding that he expects volume growth for the sector to be negligible or even contract in the just concluded December quarter.
Marico, the maker of Parachute and Saffola oil, has reduced the number of shifts at its Paonta Sahib plant near Dehradun from three to two. “We have reduced the number of shifts at Paonta Sahib as we are looking at increasing efficiencies,” said an official at Marico, who did not want to be named.
In the tax free zone of Baddi, manufacturing activity has fallen by about 30% in the past 6-8 months, according to Nikhil Nanda, managing director, JHS Svendgaard Laboratories Ltd, a manufacturer for multinationals like Proctor and Gamble India and Hindustan Unilever.