India's top rice miller KRBL has enough supply and demand but little material to pack them in

• KRBL saw a 43% jump in its share price since the nation-wide lockdown started.
  
• Anoop Kumar Gupta the company’s joint managing director said the company witnessed an increase in requirement from the retail channels.
  
• Mittal said the company did experience shut down for a few days when the lockdown started, but when it opened up, it had significant constraints of transportation and labour in the market.
  

During the lockdown, Indians are worried about only one thing - groceries. It hence comes as no surprise that the share price of KRBL — the world's largest rice millers and Basmati rice exporters — jumped 43% during the period.

“Despite global lockdown, the demand for rice is picking up. We have sufficient orders in hand, and the execution did look difficult on March 22, but it now seems that we will be able to fulfill the obligation without any problems,” said KRBL chairman Anil Kumar Mittal in a conference call.


A two-fold jump in demand

As Indians are stocking up on basics, retailers have been pushing for more stock. “We have seen a quantum rise in volume dispatch, especially in the online channel to the extent twice as much as usual,” said Anoop Kumar Gupta, the company’s joint managing director.


However, that does not mean that the rice miller had it easy. To cater to the increased demand, it had faced many hurdles. The first being transportation which had been hit hard, and added to that, labour had migrated leaving them with little manpower.

Packing pains

The company received some relief when state governments gradually eased the supply chain pains. Soon after it opened up shop to supply essentials as directed by the government, it was left with a new set of troubles.

“There were other challenges such as unavailability of labour, logistic issues, lack of courier services and transportation issues,” said Mittal. KRBL however was able to “streamline the process” with the help of local bodies.

The orders are pouring in, and supply is also inching up. But the company is still struggling with packing material shortage. “The availability of the packing material, weather plastic bag, a carton or a jute bag as they are connected with paper poly and other industries,” Mittal said. And most of these industries are still shut down.

Since packaging material doesn’t fall under the essential commodities, they are still closed.


‘There is no alternative to Basmati on the menu’

Even as its Punjab plant is running at 60% capacity due to labour constraints, its packaging unit is running around at 80% capacity. But the company believes that it is in a position to meet the increasing demand both globally and within the country.

“We will take longer to turn around but remain confident that it will because there is no alternative to the kind of Basmati on the menus that branded companies like us can provide,” Gupta added.

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