Indian FMCG majors including Hindustan Unilever, Dabur, Marico and Bikaji have reported disruption in their operations in Nepal amid ongoing unrest, though the companies added that the impact on their overall business is expected to be limited given the relatively small exposure.
Companies have paused on-ground activity, advising employees to work from home, temporarily holding up supplies amid curfew and transport closure.
For several Indian consumer companies, Nepal is an important overseas market, where they operate through a mix of local distributors, factories and joint ventures. Dabur and Britannia run production units in Nepal, while ITC is present through Surya Nepal. Reliance Consumer and Bikaji have partnered with Nepal’s Chaudhary Group for manufacturing and distribution.
The ‘Gen Z’ protests against corruption, nepotism, and a social media ban began on September 8, and quickly led to the resignation of Prime Minister KP Sharma Oli, spiralling into widespread chaos that claimed 30 lives. Among Nepal’s Gen Z, which is about 40% of the population, there has been simmering discontent over unemployment.
The ongoing unrest has crippled supply chains of consumer products manufacturers, however, any further impact has been brushed off by the businesses that have exposure.
"We are closely monitoring the situation and have temporarily paused operations in Nepal. Our employees have been asked to work from home. The safety and well-being of our teams remain our top priority, and we are taking all the necessary precautions," said a HUL spokesperson. HUL operates in Nepal through its subsidiary, Unilever Nepal (UNL) which was established in 1992 and manufactures a wide range of fast-moving consumer goods (FMCG) items.
Read More: Nepal unrest cripples border trade, Indian truckers and traders stare at heavy losses
Dabur too has asked its employees in Kathmandu to operate from home, and the sales teams has been advised to ‘prioritize safety and adhere to local curfew directives’. Dabur is among the oldest and the largest Indian enterprises with operations in Nepal, running a state-of-the-art manufacturing facility since 1989, producing a wide range of FMCG products. Nepal’s domestic market accounts for under 3 percent of Dabur’s annual consolidated sales.
"We are actively coordinating with local authorities and internal teams to ensure business continuity," said a Dabur spokesperson.
Parachute-maker Marico has a relatively smaller presence in the region and operates through local partners and distributors. "Our foremost priority is the safety and well-being of our local partners, distributors, and extended sales teams. We have advised them to stay safe till the situation improves," said a company spokesperson.
Britannia has a significant and long-standing presence in Nepal, operating through a local subsidiary, Britannia Nepal Private Limited. The company did not immediately respond to request for a comment.
Meanwhile, Bikaji Foods International operates in the region through a partnership with Nepal's conglomerate Chaudhary Group.
"The CG–JV, the agreement was signed a few months ago, and zero investments for Bikaji have been made thus far. The project (factory) was anyway expected to take 10–12 months for completion. Given the current unrest and disturbances, the project will be delayed by that much, with no other impact on our operations. Given the current unrest and truck movement closures, the supplies are on hold," said Bikaji Foods Chief Operating Officer, Manoj Verma.
According to the packaged foods maker, Nepal's business contribution is less than one percent of the company's total revenue, and the protests will not have any material impact on the overall business.
"We are confident that sooner or later, the situation will normalize and demand–supply will stabilize," Manoj Verma added.
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