Indo Count Industries Ltd. (ICIL) is working on many fronts in these unprecedented times. Worker well-being is the topmost priority today. Equally important is working closely with customers to restablise their positions in their respective markets. Mr K.K. Lalpuria, Executive Director & CEO, ICIL, in an exclusive interview with Reena Mital talks at length about the changes in the workplace, markets, consumer behaviour, and the need for companies to follow better financial planning and prudence.
Indo Count has restarted operations. Can you tell us and the industry the process of restarting? There are many questions in our minds – labour and raw material availability, machine operations and maintenance, etc.
Every state district magistrate provides guidelines according to the pandemic impact in that area – which industry can start operations and under what guidelines.
An application has to be made stating how much capacity you intend to start, how many personnel are involved, and how you would take care of the operations as per mandated guidelines.
Labour availability is challenging – what is the component of local labour and migrant labour. If the migrants have left for their homes, then you have to call the temporary workers (badli workers). Also the villages have put their own restrictions on the movement of their people as per their zone status whether Red/Orange/ Green.
Raw material and other supply chain issues are a big challenge as it will depend upon which state you are sourcing from and where do your vendors have their plants, as interstate movement is also restricted. Some of the vendors in the red zone cannot operate so you will then need to change your vendor.
Machine breakdowns and their regular maintenance needs to be properly resolved as service personnel from outside your company cannot visit the plant. And if they are from overseas, this could be an even bigger problem.
What kind of sanitisation and hygiene, protection, and social distancing measures are you following at the place of work, and while transportation of human resources and raw materials?
We are bringing our workers through rented buses as defined in the SoP provided by the state district administration. The district magistrate has provided a complete SoP to run the plant, and our HR department is also taking full care of the safety and health and hygiene of the workers. Similarly, the vehicles coming in with raw materials are sanitised as per the SoP.
How are employees and workers reacting to this change?
The employees and workers are learning and adapting to these changes and are cooperating to see that things get normalised in the near future. We need to communicate a lot to inbuild these new systems into their habits and lifestyle. Visual and written communication is being done and each departmental head assures them full support so that their mental stress is reduced.
In terms of business, how do you see the domestic and export markets evolving? How severely has your business been impacted due to this situation? How much order cancellations, if any, did you have?
There is loss of business in both the markets. In the domestic market major sales were through large format stores in urban areas and through smaller retail outlets in semi-urban and rural areas. Since retail shops are closed and it will take some time to reopen, the demand has shrunk.
It’s a similar situation in exports. Once the situation improves and the point of sales restart, we will be able to assess the reduced demand.
Also, the consumer buying pattern and consumption pattern is changing. The channel of distribution has also changed wherein online is becoming more prominent. Buy online and pick up in stores is the new norm. So the markets have changed and manufacturers need to adapt to these changes.
Our business has also been impacted as we are into exports and USA, UK, Europe are our major markets. As indicated in all market and analytical reports, there will be an impact of this on revenues this year as there will be lower sales in the current quarter and the next quarter.
Larger retailers have deferred their orders, and smaller retailers have cancelled some of our orders.
What strategies are you following to stay on course in these times?
We are observing the situation closely and keeping in touch on a regular basis with our customers. As the problem is mutual, we both need to resolve this together. We are analysing our marketing strategy, and taking appropriate steps to help our customers restabilise in their respective markets.
Some in the industry are genuinely unable to incur expenditures and meet financial obligations. How is Indo Count placed?
Even though we are a debt-free company and financially stable, we have to incur our fixed expenses without any sales revenue. As a company we are meeting our financial obligations, and expect that the situation should improve soon. Revival of export markets will help us to generate sales, thereby plugging this financial loss created by the lockdown at both ends.
Your advice and message to the industry on how to handle restarting of operations, and how to sail through these tough times – both for the organised and decentralised sectors?
- Financial prudence and managing the cash flow properly is the first step.
- Communicate and motivate our workforce and the entire team.
- Cost rationalisation and resource optimisation
- Deeper customer insights and market insights is need of the hour, and then finding ways for how to do business mutually so both parties can sustain.
- Better use of IT and technology.
- Going forward, defining the risk well enough so mitigation can be done properly.
- Overall, should build competitive advantage to sustain in the long term.
- For the decentralised sector, managing labour and credit insurance are the prime objectives.
- Focus on value addition is much needed
Overall, productivity should be increased to meet the rise in operational expenses.