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Patanjali hopes to bounce back from current stalemate on plant construction

today Jun 6, 2019
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The Ayurvedic fast moving consumer goods business Patanjali has seen work come to a halt at its Mihan domestic tariff area production site due to a cash shortage but aims to start up its development again soon.

Patanjali hopes to begin work on its upcoming plants again - Patanjali- Facebook

Patanjali Ayurved Limited’s site at Mihan DTA has seen construction work came to a halt in February this year after the business started the project in September 2016, TNN reported. Although the structure of the site, which is designed to become a production facility for the brand, is almost complete, machines are yet to be installed. 

Work stopped on the plant as a result of financial issues and a cash shortage due to having multiple ongoing projects at one time, the brand’s chairman Acharya Balkrishna recently told the Times of India. Patanjali is also currently constructing plants in Noida, Indore, and Visakhapatnam.

Balkrishna stated that the business has invested Rs 5,000 crore ($751.6 million) in building multiple plants. By attempting to construct multiple facilities at the same time the business has stretched itself thin and this has caused the slow-down. However, Balkrishna optimistically stated that the “company will bounce back soon”. He also said that “Patanjali has taken up the projects as a social cause instead of a profit objective,” applying the brand’s swadeshi rhetoric. 

Patanjali currently runs one company-owned production facility in Tezpur, Assam. The business had ambitious growth targets but saw sales drop for the first time in five years in 2018. The business attributed the slow-down to effects of the goods and services tax and problems with its distribution network. However, Patanjali’s head Baba Ramdev remains confident that the brand will become one of India’s largest FMCG players. 

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