Indian manufacturing, sourcing in Bangladesh hampered by turmoil
Despite claims that most retail sales forces and distributors having resumed operations, FMCG company Marico has not resumed manufacturing operations
The student protest and the fall of Sheikh Hasina has impacted Indian companies operating in Bangladesh, says Times of India.
Despite claims that most retail sales forces and distributors having resumed operations, FMCG company Marico has not resumed manufacturing operations. Marico, which gets 44% of its international business and about 12% of its consolidated revenues from the country, runs three factories in Bangladesh's Gazipur and Chattogram regions.
"The operating conditions in the market are gradually improving, however we remain watchful of the evolving situation....we expect our manufacturing operations to resume soon while we continue to maintain an adequate assurance_ of supply of our products to meet market demand in the interim," Marico said in a stock exchange filing on Wednesday, adding that the medium term prospects of its business in Bangladesh remains intact.
Keep updated, follow The Business Standard's Google news channel
The company sells a range of products including shampoos, edible oil, baby care and skin care products in the market. VIP Industries, which sources soft luggage, backpacks and duffle bags from Bangladesh, said that if situation in the country continues to remain tense and the political crisis has negative ramifications for India in the long-term, it will devise a new sourcing strategy, possibly moving it to India that accounts for 70% of the company's total sourcing.
"With the demand for soft luggage coming down, we have already been scaling down our operations in Bangladesh," MD Neetu Kashiramka told TOI. VIP Industries said all its seven plants in the country's Mongla region are currently working; it however, moved 20 Indian staff to Kolkata on 4 August. Of the company's revenues, 20-25% are dependent on sourcing from Bangladesh.
Fevicol maker Pidilite Industries said that it is actively assessing the potential impact of the crisis on its business operations in Bangladesh. MD Bharat Puri said that the company is hopeful of a swift resolution to the current situation. It has manufacturing facilities in a few international locations including Bangladesh and also sells locally in the country, reports Times of India.
Dabur said that it is closely monitoring the developments in the country. Analysts expect sales of companies operating in the country to remain under pressure until the crisis is resolved.
