In its quarterly survey, the Federation of Indian Chambers of Commerce and Industry (Ficci) found that 75% respondents in FMCG and food sector reported higher production levels in the second-quarter of this financial year compared to the same period in 2012, while others reported similar levels.
The survey drew responses from 276 manufacturing units from small, medium and large enterprise segments with a combined annual turnover of over US$79bn.
Moreover, it predicts production will grow in the range of 5-20% between October and December compared to the same quarter last year, with all respondents reported that they are expecting higher production.
Will boost staffing
“Order books of all FMCG and food firms are likely to witness a positive growth in October- December compared to the July-September quarter,” the survey said. “Capacity utilisation stands at 86% in FMCG and food sector and is more than that of last year for most of the firms.
“For 75% of food processing respondents, exports were higher in July-September compared to the same quarter last year. In October-December, 75% respondents are expecting an increase in exports compared to last year.”
Fifty per cent of food processing respondents reported having higher inventory than average, whereas another 25% reported having below average inventories.
“Seventy-five of respondents in the food sector are also planning to hire new workforce in next three months by 5-20%,” the survey said.
More needs to be done
The survey also found that food processing firms are sanguine about potential manufacturing growth, though they believe this could be revived if certain reforms are brought in, including an improvement in transport facilities, lower interest rates, and early implementation of the Goods and Services Tax (GST).
“In the food products sector, 75% firms are facing constraints in production since raw material prices are very high.
“Deficiency of power, labour-related issues, lack of domestic demand, shortage of working capital for day to day operations, competition faced from Imports, availability of skilled labour and uncertainties of economic environment are other constraints faced by FMCG and food producers.”