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Coronavirus impact: Why Bhopal firm's 60,000 bottles per day sanitiser plant lies idle

This is a firm example of how overnight export ban, lockdowns and price fixations can bring production of essential commodities to a sudden halt

twitter-logoJoe C Mathew | March 29, 2020 | Updated 20:57 IST
Coronavirus impact: Why Bhopal firm's 60,000 bottles per day sanitiser plant lies idle
Representative image (Photo credit: PTI)

Here is a tip for the government procurement agencies that are scrambling to ensure quality, affordability and availability of hand sanitisers in the wake of novel coronavirus (COVID-19) outbreak. A Bhopal-based MSME firm, Hind Pharma can supply up to 60,000 bottles of hand sanitisers a day. It has a couple of containers full of sanitisers lying in Mumbai too, waiting to be picked up. One condition though. In addition to placing orders, the company will require supply of fresh stocks of bottle caps, printed labels and packaging materials. Getting hold of the Mumbai inventory would be easy, if the labeling requirements for sale in India is waived off.

Hind Pharma, is a perfect example of how overnight export ban, lockdowns and price fixations can bring production of essential commodities to a sudden halt. For the last 10 days, not a single bottle of sanitiser has come out of the company, due to a combination of all three factors, Radha Sharan Goswami, CEO, Hind Pharma says.

As a 100 per cent export-oriented firm, Hind was ramping up its production of disinfectant tablets and hand sanitisers for catering to its international clients, including agencies engaged in emergency relief operations when the export ban happened. "Too much demand was there, my goods - hand sanitisers - worth around Rs 50 lakh were outside Mumbai airport, when the ban came. It's still lying there," Goswami says. He cannot export it due to ban, and his buyers in Italy, UK and other parts of the world are seeking refund of the advance payments made. "I cannot take it back to Bhopal, as trucks and drivers are not available as lockdown announcement followed. The containers cannot be unloaded in the local market, as it has no MRP, and does not cater to India's labeling requirements," Goswami says.

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The bigger problem is not the stocks that are stuck at the airport. It is the difficulty to source key inputs to resume production back in his Bhopal factory. "We have manpower, capacity and capability. But logistics is an issue. We have six lakh empty bottles stocked, but no caps, no packing material, no labels, and some key ingredient stocks. As a result, in spite of having a capacity to produce 60,000 bottles of hand sanitisers a day, we have zero production in the last 10 days," Goswami laments.

His only request is that if pharmaceutical companies are allowed to function, label printing companies, and plastic bottle cap manufacturers should also be allowed to run. "Or else how will you produce? Industries are interlinked."

The third worry is the sudden shift of raw material preference from isopropyl alcohol based sanitiser to enthnol based alcohol or ethyl alcohol. "Our sanitiser uses isopropyl alcohol as key ingredient. The raw material is primarily imported and is in short supply. It costs about Rs 300 per litre in the open market, more than three times it used to cost until recently", he said.

The government decision to fix the price of sanitiser at Rs 100 for a 200 ml bottle suddenly made isopropyl alcohol based sanitiser production unviable. "The government has declared price on the basis of volume. They have not mentioned any composition. There are a hundred types of sanitisers depending on the composition and raw materials used. They should have controlled the raw material price first, instead of the finished product", Goswami says.

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Changing the composition of his sanitiser is not difficult, and that is what he intends to do soon. But that would mean a wastage of his current stock and finished products waiting to be shipped from the factory. "The government should have said the new price will be applicable after some time, say 30 days or so. That would have given us time to exhaust our stocks and start new formulation. Today you cannot produce it at the rate fixed by the government, and the retail stores will not be willing to sell the product which bears a higher price", he says adding that the decision has made the distilleries happy as they can selling alcohol through sanitisers.

Even on export ban, Goswami says the government should have allowed shipments for which orders were taken and amount paid. Orders which are in pipeline should have been honoured, to save the image of India, he is saying. "Today somebody have paid from Italy, they are dying, waiting for the product for the last one month."

Finding a practical solution to Goswami's worries will help government ramp up sanitiser availability by 60,000 bottles a day, 18 lakh a month.

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