The pandemic has been a bonanza for multinational companies in Nepal manufacturing consumer goods related to health and hygiene as Nepalis are spending more on personal care products and immune boosters, industry insiders said.

Among the multinationals, Nepal’s largest fast-moving consumer goods (FMCG) maker Unilever Nepal reported a 668 percent jump in profits to Rs280.9 million in the fourth quarter of the fiscal year 2020-21, according to the company’s financial statement.

Unilever Nepal attributed the growth in profits to higher sales resulting in fixed cost leverage and favourable sales mix along with incremental brand and marketing investments.

The maker of Clinic Plus shampoo and Closeup toothpaste had posted a net loss of Rs52 million in the fourth quarter in the last fiscal year 2019-20, primarily due to the Covid-19 lockdown and its impact on sales, lower service income and one-time provision for doubtful debt.

The company made a quick rebound, posting a net profit of Rs854.1 million in the fiscal year 2020-21, a jump of 139 percent compared to the previous fiscal 2019-20 due to higher sales with easing of lockdown restrictions, cost agility actions and one-off provision of doubtful debts in the previous year.

Unilever Nepal had made a net profit of Rs355.4 million in the fiscal year 2019-20.

According to the company’s website, Unilever Nepal employs 242 people directly, and more than 20,000 people are engaged indirectly with the company.

“Demand for the company’s products continues to remain strong as 80 percent of the portfolio is Covid-19 relevant. While the company has delivered strong performance in quarter four driven by strong execution catering to sustained demand, the surge of Covid-19 cases, current state of vaccination and implementation of lockdowns and operational restrictions poses a significant challenge,” the company said in its report filed with the Nepal Stock Exchange.

Another multinational, Bottlers Nepal (Balaju) that produces Coke, Fanta and Sprite, reported a net profit of Rs155.10 million in the fourth quarter. The company reported a net profit of Rs449.73 million for the fiscal year 2020-21. The profit is a result of an increment in the sales volume and cost saving initiatives, the company said.

Bottlers Nepal had posted a net loss of Rs71.41 million in the fourth quarter of the fiscal year 2019-20 due to a fall in sales following the lockdown imposed to control Covid-19. The company suffered a net loss of Rs46.23 million in the fiscal year 2019-20 as the plant was shut down for 83 days coinciding with the consumption season, the company said on its financial statement.

The multinational said distribution challenges in rural areas at effective cost, and a rise in the cost of operations and reduced efficiency in business due to the pandemic are its internal problems and challenges. Similarly, market and economic recovery in progress from Covid, fluctuation in foreign exchange impacting material cost and a rise in the cost of operations due to an increase in indirect taxes are its external problems and challenges.

Bottlers Nepal’s strategy to overcome problems and challenges are to proactively monitor the internal and external environment changes and develop cost-effective distribution models for upcountry areas.

Its subsidiary Bottlers Nepal Tarai posted a net profit of Rs54.91 million in the fourth quarter of fiscal 2020-21. The company earned a net profit of Rs426.34 million in fiscal 2020-21, mainly driven by an increment in the sales volume, improved pack mix and cost-saving initiatives, the report said.

Dabur Nepal reported a net profit of Rs784.1 million for the year ended March 31, 2021. It made a net profit of Rs665.3 million during the period ended March 31, 2020.

According to the annual report of Dabur India, Dabur’s Nepal business was under severe stress in quarter one of the fiscal year 2020-21 due to the strict nationwide lockdown. During the peak summer season, the highly salient juice business felt the major brunt as out-of-home consumption declined, spending on discretionary categories fell, and tourism related channels got impacted.

“But post July, the business bounced back strongly as the lockdown gradually eased, and the company pivoted strongly towards the health, hygiene and immunity building portfolios,” said the maker of Dabur Real juice and Chyawanprash.

The multinational companies the Post talked to said that they were gradually recovering after the lockdown. As consumers are focused on their health and hygiene, with the pandemic not showing any signs of ending in the near future, sales of products related to health and hygiene are good in the market compared to non-health and hygiene products, industry insiders said.

Manufacturers of health and hygiene products said that with high demand in the market, they are managing production despite pandemic and lockdown challenges. However, the slow vaccination programme and rising caseloads can impact production as there is uncertainty that the government may impose a lockdown in response to the situation, the companies said.

They expect sales of health and hygiene products among fast moving consumer goods to swell in the future as the pandemic has made people more conscious of personal care.