Packaging Industry in India
The current wave of economic development in India is being seen from all over the world. As infrastructure, manufacturing, agriculture, and services grow at high rates the packaging industry is also showing great variety and depth in its growth. India’s packaging industry may achieve an annual turnover as high as US$ 5 billion in the current financial year with a growth rate nearly 25 per cent in significant segments. Leading companies in the Indian packaging industry show a compound annual growth rate of 30 per cent, and the Indian Rupee is strengthening against the US dollar at annual rate of 4 to 5 per cent. Even then, the US$ 5 billion figure would represent about one per cent of the current global packaging industry. In 2001, the packaging industry worldwide generated an annual estimated turnover of US$ 417 billion. The major regions that made up this total include Europe, US$ 129 billion; North America, $116 billion; and Japan, US$ 81 billion. India’s consumer packaging accounted for just US$ 2.3 billion in that year, that is about half of one per cent of the global packaging volume. Packaging in India in 2001 Today, packaging is produced more quickly and efficiently. It is generally lighter in weight, uses less material, is easier to open, dispense from, reseal, store, and dispose. Packaging has evolved from a relatively small range of heavy, rigid containers made of wood, glass, and steel, to a broad array of rigid, semi rigid and flexible packaging options increasingly made from specialized lightweight materials. Flexible Packaging Flexible packaging consists of multi-layer laminated sheets of plastics (PVC, LDPE, HDPE, BOPP, BOPET), paper, cloth, or metal foils that are used separately or in combination for various packaging applications. However, this article discusses flexible packaging as laminates of plastics that have a unique set of properties that ensure toughness, moisture resistance, aroma retention, gloss, grease resistance, heat sealability, printability, low odour and taste. These find use in packaging food, tea, coffee, spices, chewing tobacco, bakery, confectionary, oils, and in certain other non-food applications such as household detergents, health and personal care, soaps, and shampoos. Causes of Flexible Packaging
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Protection:Flexible Packaging gives total consumer protection by keeping the product clean and protecting it from pilferage and adulteration Barrier:It provides good barrier properties against moisture and gases and protects food from damage and wastage Convenience:It provides convenience of handling and disposal after use Cost Saving in Material:Flexible Packaging is light — a one kilogram oil pack weighs less than 10 grams compared to at least a 40 gram HDPE jar or 32-35 gram of PET, thereby giving tremendous saving in raw material cost. Cost Saving in Storage and Transport:It fits closely to the shape of the contents and saves cost of storage and transport. Savings in Raw Material Consumption:Tremendous saving in raw material consumption, serving the national cause by extension of usage at least times four times. More Per Pack:It provides much more product per a given amount of package. Good examples include coffee, nuts and snacks that come in foil brick packs and pouches rather than in cans or jars; juice sold in pouches rather than in rigid containers, and household cleaner refills that come in thin pouches rather than in glass bottles. Smaller Units Possible:Thus the option to buy only the required quantity at a time. Conservation of Energy:Considerable conservation of energy for conversion. For a steel coffee can to be efficient as a foil brick pack, the can would have to be recycled at a rate of 85 per cent. However, steel cans are currently being recycled at a rate of about 45 per cent. Important in Lifestyles:Convenience foods, individually packed small servings, microwaveable meals, “easy opening” packaging, secure packaging for pharmaceuticals and hazardous substances, are all examples of packaging playing a role in assisting and promoting our lifestyles.
Globalization and the influx of multinational companies. The organized sector operates in the laminated product segment such as form-fill-seal pouches. Excise duty that was once 24% has been reduced to 16%. India holds largely untapped markets with a potential of double digit market growth. The major Indian players in flexible packaging The Indian packaging industry is a combination of organized large Indian and International companies and the unorganised small and medium local companies.
Considering these factors it is only obvious that flexible packaging has a very bright future in India and is here to stay and grow in a big way. with a value exceeding US$ 50 billion. It is estimated that there are more than 200 flex-pack (flexible packaging) converters in India – 50 units in the organized sector constituting 40 per cent of the Indian flexible
. A favourable government tax structure. Tetrapacks. Modern plants and equipment available to the flexible packaging industry. The flexible packaging industry in India is currently estimated to be US$ 1 billion and records a high growth rate of approximately 20 per cent. Converted Flexible Packaging Demand
Item Converted Flexible Packaging Demand By Material Polyethylene Polypropylene Other Plastics By Market Nonfood Paper and Foil Food
1990 1995 2000 2005 2010 63 153 295 595 1125
19 5 19 16 20 47
54 20 35 39
100 190 340 60 60 74 160 360 105 175 146 270
44 75 140 250 114 221 449 855
There are around 13. The expansion of the Indian flex-pack market has accelerated due to :
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A growing middle class of over 300 million. increase sales and realize new market opportunities
Flexible Packaging Demand in India and Worldwide World demand for converted flexible packaging will grow at more than 4 per cent per year through 2005 to nearly 14 million metric tons. The best gains are expected in the world’s emerging markets. Liberalization of the Indian economy since 1991.•
Builds Brands:Helps product manufactures enhance brand images. Eastern Europe. and Middle East. including Eastern Asia. and lamitubes. Africa. The organized sector of the industry may be less than 5 per cent of the companies in the overall industry but it nevertheless controls over 70 per cent of the market by volume. The conversion of the more traditional rigid packaging into flexible forms.000 converters in India — a majority in the small and medium sector located in all parts of the country.
packaging industry and about 150 in the unorganized sector that make up the remaining 60%. valued at around US$ 145 billion.Europe : US$25 S.000 tons. coextrusion films. Major Segments The consumer market dominates the global packaging industry and accounts for an estimated 70 per cent of sales. and polysacs. There exists an exceptional gap in India between the necessary and actual demand for packaging of essential commodities and this is one of the major reasons why the growth of flexible packaging is not an alternative here but is rather an imperative. Consumption of Flexible Packaging — India in Comparison to the Rest of the World According to industry experts. Most small operations have processing capacities of less than 250 tons a month and produce overwraps. A high degree of potential exists for almost all user segments in India which are expanding appreciably:
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Processed Foods Mouth Fresheners (pan masala) Beverages Confectionary Bakery Products Spices Edible Oils Soaps and Detergents Drugs and Pharmaceuticals Cosmetics and Personal Care Chemicals and Fertilizers Office Stationary
. stands at about 500. These larger Indian flexible packaging companies include
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Flex Industries Limited Paper Products Limited (Huhtamaki Group) Positive Packaging Multiflex Paharpur Industries Limited
Demand in India The current demand for flexible packaging in India.000 T/annum and are on par with leading international operations. followed by the beverage industry at approximately US $75 billion. with industrial applications taking the remaining 30 per cent of the share.Korea : US$15 Thailand : US$3 China : US$2 India : US$1
It is also observed that a mere 20 per cent of the population in India consumes 80 per cent of the packaged production whereas the remaining 80 per cent of the population have an access to only 20 per cent of the packaged production. annual flexible packaging consumption per capita in various parts of the world is roughly as follows:
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N. The food industry is the single largest end-user market.At least ten flex-pack converters process more than 4. America : US$45 Japan : US$31 W.
toiletries. and there are plans in place to increase the food processing level to 10 per cent over a period of ten years thereby increasing the demand for packaging equipment manifold. laminators.• •
Engineering Products Tattoos
According to Freedonia. The Indian market for food packaging equipment amounts to about US$ 80 million. ongoing efforts to improve sanitation and food safety. aluminium foil. If 5 per cent of this was to be packaged it would alone generate a demand for 50000 tons of laminates. Packing 25 per cent of this quantity would generate a demand of 150. cosmetics. These inputs are of international quality and are exported worldwide. Growth is seen in the pharmaceutical sector also due to expanding penetration of a large drug-producing industry. Flexible packaging materials in India Going by the available data. If even 5 per cent of the rice produced were to be packaged it would alone generate a demand for 75000 tons of flexible packaging material. and other products. Almost all the raw materials required in flexible packaging such as BOPP. beverages. other grains. PE granules. Packaging Equipment Manufactured in India India makes most of the equipment needed by the converting industry. Personal care products such as cosmetics and toiletries are also important with fast growing Indian markets. Key markets include rice. sealing and wrapping machines is manufactured in India. fruit juice. and printing inks are made in India. a mere 2 per cent of India’s food production is being processed. PET. coffee. A full range of semi-automatic to fully automated filling. slitters. the increasing presence of multinational food and beverage firms in India. the total production of rice in India was 90 million tons. Thus there is a tremendous potential for growth of flexible packaging in the food and processed food sectors. motor oils.84 million tons. There are some 600 to 700 packaging machine manufacturers. spices. Currently. In 1999-2000. including rotogravure printing presses. edible oils. tea.000 tons of flexible packaging.85 billion. food and agricultural markets dominate the sales of converted flexible packaging in India and will continue to expand on account of several factors — rising consumption of packaged foodstuff. 95% of which are in small and medium sector and located all over the country. These machines are of high quality and are very competitive in price and are exported in a big way to developed countries as well. and chewing tobacco. Of this packaged food stands close to only about US$ 0. an estimated 250. food crops. Even if 7 per cent of it were to be packaged it would create a demand for 90000 tons of flexible packaging material. various processed foods. This clearly shows the tremendous potential for the growth of flexible packaging in India. The total wheat production in India was 75 million tons. the trend towards additional processing of food grains and fresh produce.000 tons of flexible packaging materials for retail sales in the form of laminates and co-extruded films were consumed in India last year to pack a very large spectrum of products covering processed and convenience foods. The total sugar produced in India was 24. dry and malted products. The total salt produced in India was 5 million tons. and pouching machines. adhesives. Another sector with a large demand for packaging machinery is the
. The Indian processed food industry stands at about US$ 30 billion and accounts for about 13 per cent of the country’s exports and involves 6 per cent of the total industrial investment in the country.
Goethe rightly said. Every broad industry or agricultural sector that consumes flexible packaging has its own unique and dynamic set of requirements. “Knowing is not enough. can contribute much to improved performance. waste minimization. it’s evident that companies that develop unique products and services that are “genuinely out of the box” solutions to end users’ problems will gain a significant competitive edge. In a world where commoditization is a fact. the need for new solutions unique to the Indian market emerge. Willing is not enough. So can “added value” products and services and an imaginative approach to meeting customers’ needs. we must do. developing and demanding market and most of its potential has not yet been identified. As new aspects of this market and its consumers’ behaviours are defined and chalked out everyday. Quality processes such as Six Sigma. eCommerce initiatives.”
. for example. The huge possibilities latent in each of these sectors have to be defined and cultivated. The flexible packaging industry has a very crucial role to play in the lives of the ordinary people of India and thus has a great future here. India is indeed a dynamic.Indian cosmetic packaging segment that is expected to grow at a rate of over 20 per cent in the next few years. leave apart conquered or covered. we must apply. the optimisation of supply chain efficiency through.