With most industries adopting work-from-home strategies and closing down their premises, the corporate catering business has taken a hit, and is seeking government support to tide over the crisis.
“Corporate catering is a not a very high margin business. We work on some 5-6% margin and the cost is 95%. With the lockdown looking like it is going to be extended, we have to incur fixed costs like rent and electricity charges without any revenue generation,” said Narayanan Narayanan Director, Karaikudi Annalakshmi Commercial Kitchen Limited.
The company has central kitchens in OMR Chennai and in Karaikudi , with 50% of its clients from IT companies and the remaining from other industries and a school.
“We are also facing a chain reaction wherein our clients are not getting payments from their customers and in-turn they are not able to pay us,” Mr. Narayanan said. If the lockdown continues for an extended period of time, it will lead to unemployment and the need of the hour is protecting jobs and paying salaries, for which the government has to support the sector, he said.
Mr. Narayanan pointed out the government has requested industries not to cut salaries, but that is not being strictly followed. And without cash-flow generation it would difficult for industries to pay salaries. He suggested that the State government could undertake to pay at least 50% of salaries of the industry for the next three months and can treat is as loan payable in the next 10 months at an appropriate interest rate. Or the government should defer the collection of rent and fixed electricity charges and loan payments without interest accumulation and direct banks to provide support for payment of salaries, Mr. Narayanan pointed out.
K. Sridhar, Managing Director, Fusion Foods, said that things are looking uncertain with lockdown extension becoming inevitable. The company caters to industrial customers and educational institutions. He said that measures such as the government paying the Provident Fund contribution of employer and employees for establishments with up to 100 employees, where 90% of employees drawing less than ₹15,000 salary, should be extended to others as well, without restrictions.
