THE PACKAGING INDUSTRY IN INDIA

An Industry Presentation from McG

- A Demopack of Select Slides -

Madras Consultancy Group, Chennai

Contents *
Packaging Industry : Global Packaging Industry : India Rigid Packaging Metal Containers Glass Bottle Rigid Plastics Paper Cartons

Flexible Packaging Caps & Closures

Labels
Secondary & Bulk Packaging Packaging Machinery Profiles of Packaging Companies Consumer Packaging : Select Users Regulatory Environment * Note : This demo pack has only a few select slides of the contents

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Packaging Industry : Global

Size of Packaging Industry Worldwide (est.) : USD 600 Bn. ( 2002-03 ) (excluding machinery) US packaging market accounts for about 24 % Western European packaging industry is dominated by Germany, France, Italy & U.K Paper & Board leads with 36% of the world market followed by Plastics World packaging industry has been growing at a rate of 3 - 5 % per annum

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World Packaging Market by Region : 2001

Region Value USD Bn 125 120 65 65 30 15 30 Market Share (%) 28 26 15 15 7 3 6 Annual Growth (%) 2-3 1-2 1-2 8 7 6 7

Western Europe North America Japan Asia- Pacific Latin America Eastern Europe Rest of World

Total

450

100

2-4

W Europe .

N. A erica m

J apan

A sia-Pacific

Latin A erica m

E. Europe

M iddle East & R of W est orld

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Indian Packaging Industry

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Packaging Industry : India

The Indian market for all types of packaging materials is estimated variedly between Rs. 280 & 300 billion per annum Of this, the consumer packaging market has been estimated at around Rs. 140 billion

Consumer Packaging is highly fragmented, with only a small percentage of companies above Rs.1 billion sales revenue mark Bulk packaging is primarily in the small scale sector, mainly on account of the Governments reservation policy for the SSI sector In the packaging sector, there are very few foreign firms operating in India on a JV basis or as subsidiaries On the packaging machinery side, while a wide range is manufactured in India, the industry also imports machinery, especially at the high end

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Market for Consumer Packaging : India (2002 - 03)

Product Value (Rs. Billion) 32.0 28.0 24.0 16.0 11.0 10.0 6.0 21.0

Flexible Packaging Rigid Plastics Printed Cartons Glass Bottles Metal Cans Caps & Closures Labels Others

Total

148.0

Note : The above excludes bulk packaging, tiny sector and plain films

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Market Share of Packaging Media : 2002 - 03

(by value )
Others 14%

Labels 3% Caps & Closures 6% Metal Cans 8%

Flexible Packaging 22%

Rigid Plastics 18%

Glass Bottles 12%

Printed Cartons 17%

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Indian Packaging - Notable Developments

Metal cans and glass bottles have lost large markets to rigid & flexible plastics and printed monocartons

Flexible packaging has replaced all forms of rigid packaging; the flexible packaging segment has seen many new innovations the concept of the single use unit pack is now globally acknowledged as a marketing first
Laminate tube has almost entirely replaced the aluminium collapsible tube for toothpaste packaging, now making inroads into the pharmaceutical sector PET bottles & jars have made a spectacular entry into the Indian market, recording annual growth rates in excess of 20 % per annum; in its wake, the demand for a whole new range of plastic closures has also emerged replacing metal closures PET bottles are used for mineral water, edible oil, carbonated soft drinks and a host of other products

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Metal Cans in India

The market for Metal Cans in India was around Rs. 10.2 Billion in 2001; tinplate accounted for well over 90 % of the market

Tinplate packaging, in India, includes Open Top Sanitary (OTS) cans, 3 -piece General Line cans & seamless cans - all manufactured within the country; Aluminium 2-piece beverage cans as well as limited quantities of OTS cans are imported
The market for metal packaging in India has been nearly stagnant over the past decade owing to the high cost of raw materials and consequent shift to other packaging media Tinplate is produced in India; large imports take place as domestic production is inadequate 2-piece beverage cans have not yet made an impact

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Tinplate Consumption : India

Estimated consumption of tinplate for OTS, 3- piece and seamless cans was :

Year

Consumption (000 tonnes)

130 150 155 146 150 143 155

1985 1990 1995 1997 2000 2001 2002

Note : Tinplate for 15 Kg bulk packaging is reported to have accounted for an additional 120,000 tonnes in 2002

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Select Metal Can Manufacturers : India

Tinplate (OTS/ GL) Cans Aerosol Cans

Comet, Silvassa
Hindustan Tin Works, Sahibabad India Tin Industries, Bangalore Kaira Can Company, Anand

Asian Cans Pvt. Ltd., Mumbai (Tinplate)

Metal Impacts Pvt. Ltd., Bangalore (Aluminium)

L & T, Hyderabad (contract mfr.)

Petrox, Mumbai Shetron Metal, Bangalore Standard Tin Works, Mumbai Western Cans, Mumbai Zenith Tin Works, Mumbai

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Glass Packaging : India

India has a well developed glass bottle manufacturing industry Production of glass containers :

Year

Production (000 tonnes)

1980 1985 1990 1995 2000 2001 2002

320 510 700 730 1100 1170 1220

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Trends in Indian Glass Packaging

Industry growth rate has been around 4 to 5 % per annum Industry has been under cost pressure in recent years Profitability has been low historically Loss of markets to PET containers, cartons, and flexible packaging Industry has succeeded in making light weight glass bottles, glass bottles of fancy shapes, frosted finish, etc.

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Global Market for PET Containers : by User Segment

Non-Foods Edible Oil / 5% Sauces 6% Other Foods 7% Hotfil 8% Mineral Water 13%

Others 6%

CSD 55%

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Market for Printed Cartons : India (2002 - 03 )

Others 18% Hosiery 3% Liquor 4% Matches / Agarbathi 18% Food 18%

Personal Care 9%

Cigarettes 15%

Pharmaceuticals 15%

Total Market : 420,000 Tonnes McG 16

Flexible Packaging Market : Global

The Global market for flexible packaging is estimated at USD 65 Bn.

The US flexible packaging market is valued at USD 20 Bn.

The main end user being food industry at 50 %

Western European flexible packaging industry is valued at around USD 8 Bn.

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Manufacturers Of Lamitubes : India

Manufacturer Essel Propack Ltd. (2002-03) Sri Rama Multi Tech Ltd. Courtaulds Packaging

Capacity (Mn. No.) 2,800 640 120

Essel Propack is the largest lamitube manufacturer in the world

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Caps & Closures : India

The Indian market for Caps & Closures is valued at Rs. 8.5 Billion (2002 - 03)

Industry is characterised by large number of small and medium sized manufacturers and a few large manufacturers like Manaksia Group, L & T, and Oriental Containers
Plastic closures has registered an impressive growth in recent years and is fast substituting metal closures in many applications

Innovations in recent years : ROPP Plastic : : Bulged / embossed caps, pressure holding caps Guala caps, pressure holding caps, tamper-evident caps, pourer caps

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Caps & Closures : India

Type of closures & applications... Type Major Applications

Crown Cork

Carbonated Soft Drink (CSD), Fruit Juice, Beer, Ketchup

Pharmaceutical, Liquor, Processed Foods, Hair Oil, Stationery Jam, Pickle, Condiment, Cheese Spread, Other Foods CSD, Mineral Water, Lubricants & most products packed in PET, PP, HDPE containers

ROPP Cap

Lug Cap

Plastic Closures

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Market for Labels : India

The Indian label market for packaging applications is valued at around Rs. 5 billion in 2002 - 03 Including holograms and barcode labels, the market size would be well in excess of Rs. 5.5 Billion

Annual growth is around 15 % Printed label industry is highly fragmented with a vast number of small printers, spread all over the country; however the label industry in India is nearly on par with its global counterparts

The leaders in the industry are today manufacturing labels that can be compared with the best in terms of graphic design and print quality.
The industry has the capability to print on a wide variety of substrates

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Market for Labels : India (contd.)

In recent years, there has been a shift from simple paper labels to more sophisticated products such as self adhesive labels, shrink sleeves & heat transfer labels Sophistication within the category of paper labels has also taken place in terms of high quality of printing, use of special varnishes, coating, laminating with films High end printing machines and pre-press equipment are now visible multi-station flexo and letterpress machines with stations for screen printing or hotfoil embossing and with in-line die cutting facilities, are now being imported Barcoding and holograms have recently entered the market, adding to the excitement in the labeling sector

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