10219 Investors following Videocon Indust. Share this News with them.
0
Like this story, share it with millions of investors on M3
Rate hike impact: FMCG ind to put expansion plans on hold
FinMin says rate rise would moderate inflation, but consumer product makers are less then sanguine about the move - they say it will have an impact on their future growth plans. While none of the FMCG cos have announced any major expansions this year, RBI's move to remove liquidity from the mkt will further slow their growth plans.
The Finance Ministry says rate rise would moderate inflation, but consumer product makers are less then sanguine about the move - they say it will have an impact on their future growth plans.
RBI's rate hike may have not have come as a surprise, but it's forcing manufacturers to take stock of their expansion plans and even working capital requirements. Henkel , a leading player in the FMCG space says its cash flow will be affected after the rate hike.
LG India, which told CNBC-TV18 just last month about increasing production lines at its Pune plant, now says - "We are not going to increase production lines anymore this year. We will, instead, look at utilising current facilities."
Videocon says while there will be a slowdown in consumer demand in the short term, smaller players who depend on the banks for their day to day capital requirements will be worse off.
While none of the consumer companies have announced any major expansion plans this year, RBI's move to remove liquidity from the market will further slow their growth plans.
