Consumer goods, auto companies ready plan to deal with Bangladesh turmoil

Consumer goods companies with India-based CEOs who also manage operations in Bangladesh are taking precautionary measures to ensure the safety of their employees amidst the ongoing geopolitical crisis in the country. Companies such as Coca-Cola, Hindustan Unilever, Nestle, PepsiCo, Marico, and Dabur have advised their employees to stay indoors and work from home, while some have even suspended sales operations until the situation normalizes, an Economic Times report said.
“It’s a global crisis and the headquarters have got involved in monitoring the situation, similar to what happened during the Russia-Ukraine war,” said an executive at a large multinational company who requested not to be identified.The primary concern for all companies is the safety and security of their employees and stakeholders.
As per the ET report, several Indian FMCG companies, including Dabur, Godrej Consumer Products, Britannia, and Emami, have a presence in Bangladesh, which accounts for 1% to 5% of their overall revenues. Rohit Jawa, managing director of HUL, stated, “We hope the situation stabilises soon, because it’s a very important country for Unilever. As soon the situation normalises…we will be back in operation because like in HUL, we sell a whole lot of daily goods and essential needs in Bangladesh. So, the sooner we can go back to operations, and the sooner we can start supplying again, the better it is, also for the consumers.”
Marico, which derives 44% of its international revenue from Bangladesh, remains watchful of the current situation. Saugata Gupta, managing director of Marico, said, “The Bangladesh business has held firm in a challenging environment on the back of a broad-based portfolio and robust portfolio. We remain watchful in the current on ground situation.”
The ongoing political crisis in Bangladesh has sent markets across Asia into a tizzy, and Nuvama Institutional Equities predicts that the second quarter of FY25 could see a significant impact on Marico’s sales and profits in Bangladesh. However, the overall impact on other Indian companies such as Asian Paints, Dabur, Godrej Consumer, and Pidilite is expected to be quite low, as their exposure to Bangladesh is in the low single digits as a percentage of overall sales.