- Dairy producers are finding it hard, even with encouragement by the government, to make the sector running in the current scenario
- Milk sales have dropped because big institutions are closed, and the number of customers also dips
- Maintenance pose a dangerous risk with all supporting industries close down
Efforts to keep the supply of essential commodities are on while India is following 21 days lockdown, still, the unforeseen challenges are rendering the efforts futile in many sectors, making an impact on the demand-supply scenario, day to day operations, as well as a growth prospect.
Machine Maker spoke to Ram Kutwal, Managing Director, Kutwal Foods Pvt. Ltd. the promoter of Urja branded dairy products, to get an insider’s view and opinion on the current goings-on of the dairy sector. Apart from dairy products, the company has a sizeable presence in agro-based beverages and packaged drinking water segments, all under the ubiquitous Urja brand. Apart from India, Urja branded products are exported also to Australia and New Zealand.
Milk is one of the essential commodities and hence dairy sector has been kept out of the purview of this lockdown. However, many dairy producers are finding it hard, even with permission and encouragement by the government, to make the sector running in the current scenario.
“Currently, we are only running the milk division, as milk is an essential commodity.” Mr. Kutwal says. Though the government has allowed them to continue their business in view of that, the company is plagued by challenges in the current scenario.
Workforce Shortage
First of all, they are short of manpower. They have their dairy plants in Maharashtra where 90 percent of the dairy plants are located. Also, 95 percent of their workers are from the local towns. With the lockdown in full force, it has become difficult to transport material and for workers to commute.
The availability of raw material is also another issue. Milk procuring has become difficult. To allay troubles, the police tried issuing passes to the people who transport the milk, but they could not control the rush that ensued. “The thing is, the shopkeepers’ families are also worried. So the shops are closed.” Kutwal says.
Operational Challenges
Milk sales have dropped because big institutions are closed. The number of customers has also dipped. And there are maintenance issues. There are many kinds of machines in a factory. There are homogenizers, pasteurizers, and so on. If one machine goes down, as long as there is a spare part close by, things are going to be fine. Otherwise, it would become imperative to bring new parts from suppliers. Unfortunately, manufacturers are all closed, so the company runs the risk of stopping if there is a mechanical failure and they are caught short of a spare part.
“All machinery is not taken from the same manufacturer,” he explains. “They come from various suppliers for different parts. Some machinery is imported.” However, if the situation continues for twenty more days, Mr. Kutwal is wary of the consequences that would arise.
The manufacturers and suppliers of dairy equipment should at least keep the service division one, so at least the spare parts and service are available to avoid downtime in production
Curtailed Production
As mentioned before, the company is only running its milk sector. In the dairy division, the production of goods such as flavoured milk, ice cream, and so on, has been stopped as they are not considered as essential food items. Only the production of ghee, buttermilk, and yogurt are being continued. As for other products such as paneer and lassi, any attempt to continue their production would have been fruitless, for two reasons. One, they are perishable and must be put in cold storage (there is a shortage of manpower); two, they require buffalo milk and the company cannot procure it at the moment, he informed.
Now, there is also a shortage of packaging materials for milk. The government has acted swiftly. Kutwal says, “Whenever we have issues, the government is assisting.” Despite the active support in the field of logistics, Kutwal is less unequivocal of its financial support such as the three-month moratorium, of which the details are not clear, he says.
If demand keeps falling, as it is now, the company will face storage issues. In India, raw milk is still produced – and transported up the manufacturing ladder- by farmers who have no modern means of storing it. One way of storing it is by converting it into powder; however, no one knows when the market will open for good, nor when the concerned industry can resume its operations.
In the last two quarters, the dairy sector has not witnessed encouraging growth and it is not promising in the first quarter of the current fiscal as well. However, Kutwal is optimistic that unlike other industries where the revival may be delayed due to post-pandemic pressure on the economy, the dairy sector will see through the challenges soon and operate full fledge in the interest of the nation. Praising the relentless efforts of all in the essential sector and services, including the dairy sector, Kutwal urges the workforce to be safe to keep all safe.
To know more, visit: http://www.kutwalfoods.co.in
