West Asia crisis hits Indore confectionery units, makers slash output by 50%

Indore: Confectionery manufacturers in Indore, a major hub for candies, lollipops and low-cost sugary items have slashed production by up to 50 percent as the West Asia crisis drives up input costs and disrupts logistics, sharply hitting demand in price-sensitive markets.

Industry players said the combined impact of higher LPG prices, rising raw material costs and supply chain disruptions has pushed up retail prices, leading to a significant drop in offtake. Demand for homegrown candies, lollipops and chocolates has fallen sharply in recent weeks, particularly in rural and semi-urban markets that form the core consumer base.



Indore Confectionery Manufacturers Association president Dinesh Choudhary said that units were forced to scale back operations amid weak demand.

"Production has been cut by around 50 percent because there are negligible buyers at these prices. Our overall input cost has increased by 10 to 15 percent, but higher rates are not acceptable in the market. Everything from packaging, liquid glucose to citric acid has become costlier," he said.

Manufacturers said packaging material used for wrapping chocolates and plastic jars have seen a sharp spike of 40 to 50 percent. The cost of a 300 kg drum of liquid glucose has risen to about Rs 11,500 from Rs 10,000 earlier, further squeezing margins for small and mid-sized units.

A confectionery manufacturer, requesting anonymity, said that the situation was being compounded by weak demand and rising competition.

"There is a clear drop in demand, especially from rural belts where price sensitivity is high. At the same time, competition has increased and it is becoming difficult to pass on the entire cost increase. Many units are running below capacity," he said.

The impact is more pronounced in the newly developed confectionery cluster at Rau-Rangwasa, where around 15 units that recently began operations have had to cut output due to high input costs and restricted supply of packaging materials. Around 50 enterprises have secured space in the cluster, with proposed investments of about Rs 200 crore across 28.6 hectares.

Indore has over 100 confectionery units catering largely to interior and rural markets, where locally manufactured low-cost products dominate.
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