This article is a part of Silver Linings to the Corona Cloud feature
Operations and Workforce Management
Before Corona
Our manufacturing unit was under erection and commissioning. All project work was going on smoothly.
After Corona
All erection and commissioning work of our manufacturing plant was running smoothly till the third week of March 2020 when a sudden announcement of nationwide lockdown derailed the whole process. The plant which was expected to be commissioned at the end of April 2021 became operational only in July 2021 due to the sudden non-availability of labour at the construction site and skilled labour for erection and commissioning. It took another two months, till September 2020 to get the operations people in place.
Supply Chain Management
Before Corona
Not Applicable.
After Corona
Discussions with various prospective channel partners were in full swing till the third week of March 2020. However, it soon got completely derailed for four months due to lockdown, i.e. till 15th July 2020. The eager prospective channel partners showed extreme reluctance in starting the business in a scenario of lockdown. When our operations started in mid-July 2020, it took us six months to properly set up the distribution network.
Market Scenario
Before Corona
The market scenario in the segments of interest to us looked quite exciting and promising as we had planned to enter with our range of MG Papers for packaging and soft tissue products in hygiene segments.
After Corona
The market scenario still looked quite promising till the declaration of lockdown in the third week of March 2020, after which almost the entire business except for the packaging segment, seemed to stand still with no improvement foreseen in the near or middle-term future. When our plant started in mid-July 2020, we found it extremely tough to establish our market with virtually no customer establishments open and literally all business houses working from home. Though, packaging/manufacturing sector was working with a limited workforce, establishing a new product range (which obviously took some time in stabilizing the quality) in the lockdown scenario was a big challenge. The situation somewhat improved after October 2020 as a new export market for packaging products — China became suddenly available and promising to Indian companies. This coupled with improvement in market scenario after opening up of markets further gave impetus to our customer base. We were also introducing new products in new segments almost every month with a lot of R&D that improved our company’s health by January 2021.
Profit Margin
Before Corona
Operations of our new plant being erected had not started till then. It was only an outgo of company resources in a new project.
After Corona
We were able to reach the break-even stage by January 2021 and started generating marginal gross margins from February 2021 onwards. The last lockdown during April-July 2021 did not affect us at all as during the last six months, we had developed a substantial export market for our range of products, which were being appreciated for their quality and cost-effectiveness not only in India but also globally.
Expectations from the Government
Before Corona
The government was expected to give a boost to the indigenous businesses by way of policies that will boost the investment in the domestic manufacturing sector and create an investment climate. Its policies were conducive to the new investments by cutting down on bureaucratic red-tapism and fast track clearances to establish a new industry.
After Corona
The costs of raw materials and utilities have been rising for the past four months apart from a tremendous escalation in sea freight costs making exports to the US, Europe, and South America non-viable. We are able to export our products only to the Middle East and the Far East countries. The government can help us in four ways, reduction in import duty of raw materials and chemicals, reduction in the cost of utilities like power and water, providing better export incentives, and opening up hospitality business further so that depression in the business of hygiene products can be overcome.
Future Outlook
Before Corona
Not Applicable.
After Corona
Outlook has been uncertain so far and is expected to remain so till the world is free from the effect of the coronavirus pandemic. The two factors that would help in this direction are vaccination of the global population against coronavirus and control of further infections through booster shots of vaccination so that the economy can remain open and all commercial and entertainment institutions can remain functional. Also, industries are shifting from single-use plastic to paper-based solutions; a lot of e-commerce companies have already shifted their packaging solutions to paper. So, we definitely hope there would be good growth and demand for good quality papers.
