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 Market Annual
USD Bn Share (%) Growth (%)

Western Europe 125 28 2-3

North America 120 26 1-2
Japan 65 15 1-2
Asia- Pacific 65 15 8
Latin America 30 7 7
Eastern Europe 15 3 6
Rest of World 30 6 7

Total 450 100 2-4

W. Europe N. America Japan Asia-Pacific Latin America E. Europe Middle East &Rest of World

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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 Government’s 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)

Flexible Packaging 32.0

Rigid Plastics 28.0
Printed Cartons 24.0
Glass Bottles 16.0
Metal Cans 11.0
Caps & Closures 10.0
Labels 6.0
Others 21.0
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% Flexible
Labels Packaging
3% 22%
Caps &
Closures
6%

Metal Cans
8% 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)

1985 130
1990 150
1995 155
1997 146
2000 150
2001 143
2002 155

 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  Asian Cans Pvt. Ltd., Mumbai

 Hindustan Tin Works, Sahibabad (Tinplate)
 India Tin Industries, Bangalore  Metal Impacts Pvt. Ltd., Bangalore
 Kaira Can Company, Anand (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 320
1985 510
1990 700
1995 730
2000 1100
2001 1170
2002 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 Others
Edible Oil / 5% 6%
Sauces
6%

Other Foods
7%

Hotfil
8%
CSD
55%
Mineral Water
13%

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 Market for Printed Cartons : India (2002 - 03 )

Others Food
18% 18%
Hosiery
3%

Liquor
4%

Matches /
Personal Care Agarbathi
9% 18%

Cigarettes Pharmaceuticals
15% 15%

Total Market : 420,000 Tonnes

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 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 Capacity (Mn. No.)

Essel Propack Ltd. (2002-03) 2,800

Sri Rama Multi Tech Ltd. 640

Courtaulds Packaging 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 : Bulged / embossed caps, pressure holding caps

Plastic : 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

ROPP Cap Pharmaceutical, Liquor, Processed Foods,

Hair Oil, Stationery

Lug Cap Jam, Pickle, Condiment, Cheese Spread,

Other Foods

Plastic Closures CSD, Mineral Water, Lubricants &

most products packed in PET, PP, HDPE
containers

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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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 McG
Madras Consultancy Group
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Tel : 91 (44) 24939161 / 24936321

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