Govt bans export of sanitisers, ventilators with immediate effect

Source: Business Standard, Mar 25, 2020

New Delhi: The government on Tuesday banned export of all sanitisers and ventilators with immediate effect in wake of the coronavirus outbreak.

“Export of all sanitisers…is prohibited, with immediate effect,” the Directorate General of Foreign Trade (DGFT) said in a notification.

It also banned exports of all types of ventilators, including any artificial respiratory apparatus or oxygen therapy apparatus or any other breathing appliance or device.

Last week, it had banned export of certain ventilators, surgical and disposable masks and textile raw material used for making masks. There is a shortage of hand sanitisers and face masks in the market amid the coronavirus outbreak as people resorted to panic buying.

Tamil Nadu to set up Pharmaceutical Ingredients Park with Rs 770 crore

Source: Business Standard, Mar 24, 2020

Chennai: Tamil Nadu government has announced setting up of an Active Pharmaceutical Ingredients (API) Park in the state, with an investment of around Rs 770 crore amidst coronavirus menace. The state government also announced Rs 3280 crore to support the people who are suffering from the virus outbreak.

The new API Park to manufacture bulk drugs that would be used for finished dosages, will be set up in around 650 acre land in Cheyyar, in Thiruvannamalai district with basic amenities such as warehouses, research and development and waste treatment facilities, with an investment of Rs 770 crore, said State Chief Minister Edappadi K Palaniswami today.

The move comes at a time when the coronavirus outbreak in China has raised concerns about availability of critical and essential bulk drugs to produce finished formulations of life saving medicines. The country is currently dependend on APIs from China for various such medicines, and disruption in availability of APIs was a concern for the industry and the public health experts.

The state government has also allocated around Rs 110 crore to set up coronavirus special facilities in various cities and upgrade the King Institute of Preventive Medicine & Research, Guindy, to a Bio Safety Level III centre.

It has also allocated Rs 3280 crore to support those who lost their livelihood due to restrictions over coronavirus in the state. It will be providing Rs 1000 to each ration cards which are eligible for rice and other food grains from the Public Distribution System. People who are working for daily wages, such as auto rikshaw drivers, construction workers etc will get Rs 1000 each along with 15 kg rice, one kg pulses and one kg of cooking oil. The state government has said that six more people were tested positive, taking the total number of positive cases to 15. A total of 2,09,163 passengers were screened at the Airports of Chennai, Trichy, Madurai and Combatore and 15,298 are under home quarantine, while 43 aymptomatic passengers from highly affected countries are being quarantined in facilities near airport and 116 are under hospital isolation.

Government likely to fall short of revised divestment target by Rs 13,000 crore

Source: The Economic Times, Mar 25, 2020

NEW DELHI: With a week to go for the financial year to end, the government is set to fall short of its revised divestment target of Rs 65,000 crore by a little over 20%, even as officials expect some deals to close this month.

Proceeds from divestment including offers for sale, equity traded funds and buybacks, stood at Rs 35,537.32 crore as of March 12, officials said, adding that an additional Rs 15,000 crore is expected from NTPC’s buyout of NeepCo and THDC and the sale of Kamarajar Port Ltd. to Chennai Port Trust.

“(Proceeds of) THDC and NeepCo will happen in the coming days. Kamarajar Port will also happen,” an official said, asking not to be identified. “But this year’s targets cannot be met.”

While a few share buybacks from public sector units are in the works, offers for sale will not be taken up owing to the volatile situation in the stock markets, a second official said.

Conceding that the coronavirus outbreak and the oil price crash have created a volatile situation in the markets, officials said that while March 2020 has been dry, the month otherwise typically sees average inflows of between Rs 15,000 crore and Rs 20,000 crore every year.

“Three weeks ago, we would have been more gung-ho because this is typically a bull month… but no company would have expected such a crash in demand… and the economic impact of these developments will be deep,” one of them said.
The government had revised its divestment target for FY20 to Rs 65,000 crore from Rs 1,05,000 crore. It set a goal of Rs 2,10,000 crore for FY21, including Rs 90,000 crore from the sale of government stake in banks and financial institutions.

Industry experts said the government’s plan to sell its marquee assets – Air India, Bharat Petroleum Corporation Ltd., Container Corporation of India and Shipping Corporation of India – in the next financial year could take a hit due to the worldwide coronavirus outbreak and oil prices, which crashed to less than $25 a barrel. Government officials are taking a cautious approach. “We’re not too optimistic but we’re neither being pessimistic. We have to see how coronavirus pans out. We’re carrying out the decisions on strategic sales that we’ve taken… it will take time, about six to eight months, but we’re constantly engaging with investors,” the second official said.

While the last date for submission of bids for Air India has been extended by more than a month to April 30 on the grounds that interested parties had sought more time due to the fallout of the coronavirus spread across several countries, the government will take a call on extending dates for BPCL if potential investors seek more time. Meanwhile, the request for bids for Concor are targeted for September as several issues, including that of land leased by the entity from the ministry of railways, are being resolved.

India's e-commerce sector comes to halt due to lockdowns

Source: Business Standard, Mar 23, 2020

Bengaluru: The Indian e-commerce sector has come to a halt across the country including the supply of essential commodities due to various lockdowns to prevent the spread of Covid-19, according to the e-commerce industry executives. They said there is a lot of police action on the ground and even the interstate movement has been stopped due to which lot of essential items on platforms such as Flipkart, Amazon, Grofers and Milkbasket are not reaching the people. Even food-delivery firms such as Swiggy and Zomato are facing similar challenges due to various lockdowns, according to the sources.

“There is a lot of ambiguity and uncertainty. The authorities keep coming up with circulars which are contradictory to the previous ones,” said an e-commerce industry executive. “It is more a miscommunication issue due to which there are many challenges that companies such as Flipkart, Amazon, Grofers and Swiggy and Zomato are facing on the ground.”

E-commerce companies are facing challenges in delivering essential items such as rice, wheat, pulses, baby food, dairy and fruits and vegetables. The other important items include hygiene products such as soaps, sanitary pads, sanitisers and masks. As most of the people are working from home, e-commerce industry insiders said that the firms are also finding it a challenge to deliver products such as power banks, laptops, routers, headsets and tables and chairs to the customers, despite a tremendous increase in demand.

The Government of Karnataka on Monday put out an order saying that e-commerce and home delivery come under essential services and shall be excluded from the restrictions imposed by the government to contain the spread of Covid-19. Government of Maharashtra on Monday also put out an order saying that e-commerce services providing essential goods including pharmaceutical and medical equipment, should be excluded from the restrictions.

According to the sources, other than essentials which are witnessing huge demand, the rest of the e-commerce categories are witnessing at least 60 per cent drop in sales. “But the issue the e-commerce companies are facing for essentials is replenishment and last mile-delivery,” said a person.

Milkbasket, a Gurugram-based daily grocery delivery service said the company’s staff, vendors and vehicles are being pushed back from the roads by local police, disrupting the operations. “Yesterday we had to cancel thousands of orders. We could only operate at 40 per cent capacity in Gurgaon. Even lower in Noida. We might have to cancel all the orders today, impacting over 150,000 families across 4 cities,” said the company on Monday. “We are being told to shut down our distribution centers.” The company urged the authorities to look into the matter and support the firm in ensuring smooth service.

Online grocery firm Grofers said as per the directive of the central government, the firm continued to provide essential goods to customers across the country on the day of Janta Curfew. However, due to some confusion regarding the services exempted, many of its delivery riders were stopped and arrested which led to a delay in the delivery of almost 60,000 orders countrywide.

“This does not only affect the morale of the delivery staff who are working selflessly to support people but is also causing inconvenience to many customers who are relying highly on our services,” said Albinder Dhindsa, co-founder and CEO of Grofers, which is backed by SoftBank. Furthermore, in a few states including Maharashtra, it is also facing forced shut down of warehouses in these difficult times. “Our teams are working relentlessly to support people and managing deliveries to avoid any kind of panic among consumers and we request authorities to take measures to ensure that the process of essential items delivery remains smooth,” said Dhindsa.

Saurabh Kumar, another co-founder of Grofers on Monday said on Twitter that despite assurances that grocery is an essential service and Grofers should continue to operate, police and local authorities keep shutting the warehouses. “All the proactive initiatives of (the) government and central authorities (are) going to waste because of overzealous enforcement agencies,” said Kumar. He said for every facility that gets shut the risk is that many households would venture out for grocery buying.

E-commerce firms are requesting State governments to resolve various issues. This includes movement of goods for e-commerce by trucks plying State and Inter-state. There are letters issued by the companies to the truckers, which need to be accepted by the authorities. These letters say that the products are for e-commerce service delivery ensuring families are getting what is essential for them to have at home “during isolation so they don’t have to leave their homes,” said a person who did not wish to be quoted. The firms are also requesting for the opening of multi-products warehouses, distribution and sort centres. Also safe movement of personnel for e-commerce activities after showing the letters given by the online retailers and govt-issued identification documents. “We request for a strong coordinating mechanism between Central and State governments to ensure that these guidances are percolated down to the ground level,” said an e-commerce industry executive.

The companies are also asking to allow the operations of the necessary customer and IT support and movement between home and office for operations and logistic services. In response to a query from Business Standard, Walmart-owned Flipkart said while its teams are working with Center as well as State authorities to ensure that it continues to serve the communities, there are operational issues on-ground. “These impact our ability to seamlessly service the communities as they stay indoors. We are working with the Central and State government as an industry to solve these challenges,” said a Flipkart Spokesperson. “We are confident that together we not only can fight this challenge but also ensure that customers and communities have access to essentials in this battle. At Flipkart we are confident that by leveraging technology and supply chain expertise, we can contribute meaningfully,” said the spokesperson.

FMCGs on toes to keep manufacturing on track

Source: Business Standard, Mar 24, 2020

Mumbai/Chennai: The lockdown in several Indian cities to tackle the COVID-19 outbreak has had an unintended consequence: Manufacturing of essential items has been hit hard.

State governments on Sunday and Monday had exempted makers of groceries and staples from its list of manufacturers included in the lockdown to ensure supply of essential goods and services wasn’t hampered.

But with people unable to move around and strict enforcement of section 144 in many places, chief executive officers of fast moving consumer goods (FMCG) companies admit that running factories has been a challenge.

Workforce is down to 25 per cent in many units. Some are even thinner at 15 per cent attendance only. While some others have had to shut their units down temporarily simply because workers have been unable to report to work as transportation grinds to a halt.

“We are thinly staffed across our plants due to the lockdown,” Mohit Malhotra, chief executive officer, Dabur India, said. “Some units like in Ghaziabad, Alwar and Kolkata are shut.This is a tough time. But having said that, the first priority for us is the safety of our people. The workers who are reporting for duty are doing so in batches and there is rotation of staff that is happening,” he said.

MR Jyothy, managing director, Jyothy Laboratories, said that only five of her company’s factories were operational on Monday out of a total of 25 units. “We will see how to get the twenty units up and running in the coming days. The situation is fairly unpredictable currently and we will have to wait and watch how it unfolds,” she said.

Given the uncertainty and the likelihood the lockdown stretching beyond March into the first week of April, CEOs said that they were in constant communication with their people to avoid confusion and panic on the factory floor.

“We are communicating closely with our team members across regions and functions to ensure business continuity and the movement of our products into the market. Our biggest priority is to ensure that sufficient supplies of high demand items like sanitisers, hand washes and soaps are replenished across channels,” Vivek Gambhir, managing director and chief executive officer, Godrej Consumer (GCPL) said.

Most hygiene makers including Hindustan Unilever, GCPL and ITC have ramped up production and distribution of hygiene products as demand surges. For this, they are talking to local authorities to allow production to continue at their factories, creating buffer stocks of inventory and managing staff movement around their plants.

“We have sought clearance from the authorities in the notified locations to continue manufacturing essential items like Savlon hygiene products and food products like Aashirvaad Atta,” an ITC spokesperson said.

Gambhir said that his company was working closely with raw and packaging material suppliers to facilitate their timely and uninterrupted supplies.

” To manage contingencies, we are building stocks to prepare for longer periods of disruption and are providing extra stock to our distributors, along with short term credit to help them during these uncertain times,” he said.

A V Anoop, managing director, AVA Group, which manufactures the Medimix brand of soaps, said it was impossible to match demand and supply given the strictures around the lockdown. “Soap making is a laborious and time-consuming process and we rely heavily on our workers, who’ve been with us for over 25 years. But with the stay-at-home directive, they are unable to make it to work,” he said.

Auto industry stares at $2 bn loss, as factories and dealers shut shop to stem Covid-19 contagion

Source: The Economic Times, Mar 24, 2020

Mumbai | New Delhi: The automotive industry is expecting a loss of 7.5 lakh units in production and $2 billion in revenue in March alone because of the lockdowns to combat the Covid-19 outbreak. Despite the tough business environment, several automakers ET spoke to said they would not lay off any permanent or temporary workers. The government has also told India Inc to not cut jobs or salaries.

Production has come to almost a standstill, as state governments have imposed lockdowns and companies themselves shut their factories to help break the chain of the coronavirus outbreak. Since these measures will remain in place at least until the end of March, companies are sure to lose a third of the output for the month. And, more than half a dozen industry executives and experts ET spoke to said even an improvement in the Covid-19 situation wouldn’t bring much respite to the industry in April as it would take a while for consumer confidence to become normal.

Mahindra & Mahindra managing director Pawan Goenka said pretty much everything would be shut down in the coming few days. “These are unusual times and we need to conserve cash, and Mahindra is looking at multiple ways to deal with the situation,” he said.

“One really does not know when things will return to normal. But going by the experience of China, Korea and other markets, at least a month of business is likely to be disrupted,” he said. “There will be a period of time when companies won’t be generating revenue and there will be some level of fixed expense that is incurred and that will drain the P&L for everyone. Nobody is spared.”

Tata Motors was the first to announce, on Friday, that it was shutting several plants. It was followed by Mahindra, Maruti Suzuki, Hyundai Motor India and Toyota Kirloskar on Sunday. Kia Motors, Renault Nissan Alliance, Yamaha Motor and TVS Motor from the southern automotive belt on Monday said they too would suspend production. Suzuki Motor Gujarat also announced shutdown from Monday.

Toyota Kirloskar Motor senior vice-president Naveen Soni said the local administration in Bidadi, Karnataka, had permitted operations at its plant with 50% staff on alternate days. But given the gravity of the situation, the company voluntarily decided to halt manufacturing operations completely till further notice, he said.
Dealerships are also shut in districts that are under lockdown. Those elsewhere are getting few visitors, said industry executives.

Crisil Research director Hetal Gandhi said production shut down might continue well into the first quarter of fiscal 2021 staring April, as sentiment remained weak. “We expect the Q1 to be a washout for the industry and we don’t expect the market to recover in the next financial year. Given the environment, at best, passenger vehicles and two-wheelers may register flattish growth. However, commercial vehicles will continue to decline next financial year,” added Gandhi.

The estimated production shortfall in March includes more than 1 lakh cars, 12,000-15,000 trucks and over a half-million two-wheelers, said several people tracking the sector.

While sales are usually high in March for the automotive industry, it was different this time even before the current situation arose. Production was estimated to be 1.8-1.9 million units across segments this month as against 2.1 million units produced a year earlier, as companies were preparing for the transition to Bharat Stage-VI emission standards that come into effect on April 1. Automakers were also facing shortage of components from China, where factories were shut for much of January and February due to the corona virus outbreak.

Coronavirus scare may deliver ₹5,000 crore blow to advertising

Source: The Hindu Business Line, Mar 21, 2020

NEW DELHI: The Indian advertising industry may suffer a ₹5,000 crore blow in the next three to four months if the Covid-19 outbreak is not contained, according to estimates by media buyers.

More than ₹2,500 crore worth of ad spending is already at stake with the Indian Premier League (IPL) cricket tournament being postponed.

Summer advertising, which pulls in more than ₹2,000 crore of ad spending on tourism, consumer durables, food and beverage, and fast-moving consumer goods, continues to remain at risk.

Media buyers said the effect of activations and below-the-line promotions being cancelled completely could be severe because of product launches being deferred and many categories such as movies, food and travel likely to face a complete washout if the lockdown announced by the government intensifies in view of increasing number of positive cases of Covid-19.

“April to June is a big quarter for the ad industry as it is the onset of the new financial year, IPL is scheduled and summer-specific brands also start advertising. How this quarter pans out is crucial,” said Navin Khemka, chief executive of MediaCom South Asia, a GroupM-owned media agency.

There is more anxiety and less panic but if more businesses get locked down, then panic will be triggered, said Sandeep Goyal, chairman, Mogae Media, a Mumbai-based marketing and communication agency.

“Right now, it is more about postponement with the possibility of business restarting if normalcy returns soon. However, if the current hysteria extends beyond March, the repercussions will be severe,” Goyal said.

The growth for this year has vapourized, experts said. Travel and tourism have been severely impacted and businesses with personal contact such as cab-hailing apps and food delivery are also facing the heat because of the disease transmission fear.

Entertainment, events, sports, retail and restaurant businesses are braving the temporary shutdown in hope that the outbreak will be contained soon.

Anand Bhadkamkar, chief executive, Dentsu Aegis Network India said that

events and activation business has come to a standstill with mall activations and on ground promotions getting postponed.

“It is going to continue for two weeks at least in the metros. Most of the clients are postpoing and pulling back on launches and promotions if situation doesn’t become better it will have ramifications. The ad spend projections are shifting with digital consumption increasing we might be witnessing an uptick in digital ad spends. The economy itself is struggling the clients will cut back on their spends completely therefore next two to three months are critical. This is the evaluating and holding back stage by advertisers but the impact is being felt all across,” he added.

As at home media consumption increases and buying and consumption habits change in the wake of Coronavirus outbreak, it would also be essential for brands to tweak the way they market their products and services. “I feel that at this point in time, marketing is necessary, the messaging needs to be authentic, topical, one that build trust and reassures. Our client Domino’s, for instance, came out with a topical campaign on pizza deliveries untouched by human hands. To me this is brave and responsible marketing. In the times of Covid, marketing needs to be controlled and not viral,” said Vikram Sakhuja group CEO at Madison Media.