Food industry on verge of collapse

Kathmandu, Sept. 10

Food industry that was supposed to run at the full capacity and make even better income and profits during the lockdowns and restrictions, but deprived of many facilities and relief offered to the industries of other sectors, is reeling under an unprecedented challenge to manage cash flow and find the market of its products.

Unless some innovative measures are applied within a few days the entire segment of food production will collapse, said the Association of Nepalese Rice, Oil and Pulses Industry (ANROPI).

The food industries are running at maximum 30 per cent of their capacity. But the number of industries in operation is just around 20 per cent, said Subodh Kumar Gupta, President of ANROPI.

The demand for food products including rice, pulses, flour, spices and many other items has dropped drastically with the closure of hotels, restaurants, party venues and hostels across the country. Likewise, other events and celebrations that consume higher amount of foods such as weddings, religious worships, picnics and get-togethers have also ceased.

It has severe repercussions on food production and supply.

"Furthermore, a large section of people have moved to the villages from the cities. Naturally, apart from certain parts in the country, villages do not need basic food supply from outside," said Satish Kumar Bohra, Managing Director of Bohra Group which runs the food manufacturing and packaging industries.

According to the business people, the lockdown has changed the food habits of people as well. People who enjoyed various delicacies during the initial days of the lockdown, executed from March 24 to July 21, have started to be cautious about their spending spree on food items since there is no sign of the end of the pandemic as well as the lockdowns and shutdowns.

Bohra said that a large amount of money of the industries is stuck in the market and industries have not been successful in raising it.

Gupta said that the industries that are in operation are producing the items that have high demand in the market. "The growing unemployment due to the prolonged lockdown and restriction has hit the poor and lower-middle class people very hard and they have applied control measures in their family budget," he said.

He informed that the supply of raw materials as well as finished goods were the two major problems.

The ANROPI said that especially the small and medium scale industries are facing higher challenges. Meanwhile, they are less likely to be benefitted from the government announced supports.

The industries in Nepal do not have any management plan or preparedness for the crisis like COVID-19 while the sectoral associations are confused about the policy adjustments and future steps, Bohra said.

Industrialists said that there is no alternative to opening the market with strict adherence to the health safety protocols. Since lockdown or shutdown has failed to be effective in checking the spread of the virus, the government and the business community should find safe and effective way together to run and regulate the market, otherwise it will invite an economic crisis that will impact every sector of the economy, said Gupta.

 Published in The Rising Nepal daily on 11 September 2020.