Sustainability is fast gaining favours amongst companies, with consumers increasingly looking to buy products that are ‘green’. A recent report highlighted the growing trend of sustainable packaging in growing markets of China and India. The cause is attributed to a growing middle class who is aware of health and environmental issues of flexible packaging. It is forecasted that by 2018, Asia will become the largest market for sustainable packaging in the world accounting for 32% of the overall market share. In the same year consumer demand, technological advancement will push sustainable packaging to a $244 billion mark.
Bioplastics have been playing an integral role in company’s sustainability drive over the past couple of years and these materials will be more and more commonly available as we further head into the new millennium. The global production of bioplastics is tipped to increase from 1.2 million tonnes in 2011 to 5.8 million tonnes by 2016.
The approach towards sustainability also offers a competitive business advantage that manufacturers should keep in mind. Good environmental performance and business value can work in tandem, and this is all the more relevant in today’s time.
In addition to clear business advantage, sustainable packaging offers exploring innovative options both for the flexible packaging manufacturer and the FMCG industry. It is important that both the sectors work together to employ a number of innovative approach to improve sustainability of their products like recycling and reprocessing infrastructure, using optimum packaging, producing packaging from bio-based materials.
Packaging companies in India like the Uflex Ltd., which is India’s largest flexible package provider, has always been committed towards sustainable options of flexible packaging. Being on the edge of innovation they provide packaging that keeps the products safe, fresh and devoid of any harmful reactions. With the constant R&D for safer and environment friendly packaging, the company is dedicated to bring safer, better and sustainable packaging solutions.
Uflex products are high on sustainability which is important in packaging as the product is very close to the consumer and is usually assumed as a waste. Uflex believes that wherever possible all flexible packaging waste should be re-cycled or reprocessed in the same industry or alternative applications.
Their Green pet and rPET techniques ensure that the plastic is manufactured in an environment friendly manner without compromising on the quality of the product and the recycling and reprocessing of the plastic waste is done in a safe and non hazardous manner.
In its new role, sustainability is a way for the company to provide a platform to the consumers that allows them to feel like they have made a difference, to have done something that they might not have been able to achieve on their own and feel good about the purchase.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in an analysis last year had stated that the Indian packaged food industry is expected to reach the $30 billion mark by 2015 growing at a CAGR of 15%-20% p.a. The current level of the food industry is currently US$ 15 billion including snacks, ready –to-eat food, processed food etc.
In the early part of 2013 in a summit held for flexible packaging industry (Indiapack 2013) it was ascertained that the Indian packaging industry is expected to grow at 12.3% CAGR in the next 4-5 years to become the fourth largest global market with a sale of $ 42.7 billion
The growth of these two markets is mutual. The rapid urbanization, modern retail trade, technological advancements are some features which have prompted a boost in these sectors.
In the flexible packaging market food packaging is estimated to be the second fastest growing market due to a rise in consumption of packaged food items. A growing sense of concern of health and knowledge about the nutrition of the food packaged has driven the market for packaged food to preserve the end products.
In the past few years the Indian food industry has grown from strength to strength. India comes second to China as food producer with a potential of being number one in the world. Packaged food has become the new preferred source of consumption especially in the urban areas. Packaged food saves both time and energy consumed in cooking a full blown meal from scratch.
Flexible packaging has benefitted immensely from the explosion of various brands. Materials like BOPET, EVOH and PA have been demonstrating high growth owing to their barrier properties. Barrier flexible packaging has seen a continuous growth as major manufacturers demand packaging that will ensure longer shelf life and greater protection for their produce.
Other features like durability, convenience, designabilitiy, eco-friendliness etc have been desirable in making flexible packaging a favourite amongst food manufacturers.
Flexible packaging has the advantage of using pouches of the same style to store different items. A basic pouch can be used for storage of food and beverage. By adding a spout to the pouch it can be customized to store liquids. The addition of a zipper will make the pouch more convenient to store and restore dry items.
The main categories of food that involve flexible packaging are bakery items, dried and frozen processed food, food substitutes, dairy products, processed meat etc. According to the Indian Brand Equity Foundation (IBEF) the packaged food industry in India is likely to witness a jump by 2015 and touch US$ 30 billion from the current US$ 15 billion. This rise will be mainly due to the rise in household income, changing urban lifestyle and retail trade. In 2011, residents of urban areas were the largest consumers of processed food, consuming 78% of total packaged food.
Beverages also form an important share in the flexible packaging sector. The fruit beverage category accounts for US$ 177.78 million and is expected to grow at a CAGR of 15% over the next three years.The packaged milk segment in India is projected to grow from the present US$ 7.76 billion to US$ 32.9 billion by the year 2030 at the rate of 8%.
India’s largest flexible packaging company Uflex Ltd believes that flexible packaging is one of the main ingredients of the food and beverage industry owing to its dynamic structure and nature. Many innovations which have become a part of the FMCG industry are products of the flexible packaging industry. Apart from that, top of the line designs and recyclable plastics have been our bastion for last many years. Uflex products are designed keeping in mind the changing market trends and consumer needs and specifications.
With the year 2013 virtually coming to a close, the time is ripe to analyze the trends in the coming year. The packaging industry in Indiais worth $24.6 billion with 22,000 firms comprising of raw material manufacturers, machinery suppliers, subsidiary material etc. The plastic packaging in India is growing at about 20-25%.
In 2014, the basic packaging trends are expected to be:
1) Focus on the shape and structure: The packaged good will always be recognized by the packaging style and in 2014, the shape, size and material that the product is packaged in will gain priority as each aspect can be an identifying tool for the brand.
Packaging will need to reduce to smaller portions as the trend of customers buying those portions is gaining popularity. Hence, single serve or single use size packaging will be in trend in the New Year. Customers will lean more towards flexible packaging since it’s more convenient in terms of storage and takes up lesser space than other forms of packaging.
The materials used in the manufacturing of the package are also going to be vital. The texture, opacity, the finish and finally the recyclability or the amount of recycled material that is used in the package will be a structural element which will be on top of the customer’s agenda.
2) Message on the package: Consumers today are bombarded with information and in such a scenario for your package to stand out amongst its competitors and to retain the consumer’s attention it is important that the message on your package is concise and clear. Basically, two fundamental questions: What are you- wherein the writing should clearly tell the customer about the packaged product. In case of any ambiguity, the packaging should make sure to clear the confusion. The second would be-what are you-the manufacturer can talk about the benefits of the product, its USP etc but care should be taken that there is no overdose of information. People today have no time to read and analyze overcrowded package.
3) Stand up pouches gain popularity- Stand up pouches are a favorites of customers in today’s age. A growing number of consumers favor the trend of stand up pouches. These pouches are cost saving, has a longer and improved shelf life, better barrier performance. Apart from that even for the manufacturer it’s a more economical option it decreases operating cost, increases output and offer greater flexibility in terms of shape and design. Stand up pouches are used extensively in FMCG produce. Stand up pouches is going to be one of the major gainers and trendsetters in 2014.
4) Green Packaging- Recyclable PET made from renewable sources will see a spurt in the coming year and the trend is here to stay. Due to the largely aware segment of consumers large industries have been investing heavily in development of environmentally friendly flexible packaging. Uflex Ltd., India’s largest flexible packaging manufacturer has made sincere efforts to reduce environmental impact of its products and the production process by manufacturing packages that are made out of use of green raw materials and are reprocess able thereby, minimizing emissions that may pose a threat to the environment.
The Indian packaging scenario will witness more growth for flexible packaging owing to its cost-effectiveness and sustainability credentials. Be it in the West or in the East, the growth will be driven by a host of factors within the packaging and consumer retail sectors. Features like longer product shelf life, weight reduction and customer convenience are areas for packaging manufacturers to grow and innovate in.
India’s largest flexible packaging company Uflex Ltd had invested $ 80 Million to set-up 30,000 tones polyester film unit in the Polish city of Wrzesnia. It was announced on the occasion of completion of one full year of operation of Uflex’s plant in Poland that since the commencement of its operation in July, 2012, the company has achieved revenues of USD 90 Million. The Polish plant is operating in its full capacity and is utilized to meet demands for flexible packaging solutions from within Poland and neighboring countries of Europe.
Uflex has plans for a major corporate revamp wherein the company plans to bring its overseas plastic film business under an umbrella company based in Dubai. Plans are also in the pipeline to list the said company overseas to part-finance future expansion plans.
Uflex has its presence in over 140 countries across the world with plastic film manufacturing facilities in India, Dubai, Mexico, Egypt, Poland and Kentucky, U.S. and packaging products facilities at multiple locations in India.
With the company’s vision to ‘Progress with Distinction’, Uflex brings a variety of value added flexible packaging material and sophisticated products like BOPET, BOPP and CPP, state of the art converting machines, rotogravure cylinders giving the company an edge over its competitors. The company also specializes in a wide variety of packaging machines like Vertical Form-Fill-Seal Machines, Horizontal Wrapping Machines, Special Purpose Machines, High Speed Pouch Making Machines.
In the last financial year 2012-13, plastic films contributed nearly 60% of the company’s revenue. Value added products contributed around 53% of the earnings having 40% share in the revenues. Uflex Ltd offers complete packaging solutions for a wide range of FMCG goods, dairy products, pharmaceuticals, pet food, sugar, automotive oil, lubricants and components.
Speaking to journalists who were touring the Uflex plant in Poland Mr. R.K. Jain, Group President for corporate finance and strategy stated: “We have pursued global investment in both greenfield and brownfield projects. This has been our consistent strategy. In this regard, we have successfully invested more than $500 million. This has given us the strength to address our dual commitment: To the investors, by creating incremental value on their investments, and to clients, by offering products that add value to their go-to-market strategy. The first full year of operations of Uflex in Poland saw a contribution of $90 million to the revenues. We also witnessed favorable demand trends for our innovative flexible packaging solutions. This saw an increased uptake from clients globally. Let me also add, the profit margins are showing improvement quarter-over-quarter during the current financial year.”
Uflex plans to consolidate its position as a truly Indian MNC. The strategy of global expansion includes capacity expansion and adding manufacturing lines for various product categories in existing and new locations to increase proximity to the markets and also to include the broad portfolio of value added services to clients.
In the coming three years beginning 2014-15 the company has plans to go in for a major capacity expansion to diversify their products range, grow revenues and improve margins.
For the financial year ended March 31, Uflex recorded 14% growth in consolidated net revenues at Rs.5,161 crore, against Rs.4,516 crore in the previous year. For the six-month period ended Sep 30, 2013 consolidated revenues were Rs.2,914 crore, against Rs.2,626 crore in the corresponding period last year.
While the higher revenue growth is attributed to new capacity added by the company since the manufacturing facilities in Poland and Kentucky in US commenced commercial production over the last year and also witnessing favorable demand trends for its innovative flexible packaging solutions, which saw increased uptake from clients globally whereas the profit margins are showing improvements quarter over quarter during the current year.
New Delhi:- Uflex Ltd, the Bombay Stock Exchange (UFLEX: 500148) and NSE listed, India’s largest flexible packaging company maintaining a sustained growth trajectory, has achieved a consolidated revenue for the September quarter of FY 2014 of Rs. 1516 crore as against Rs. 1250 crore for the same quarter last year.
On a sequential basis, the company registered growth in its quarter-on-quarter consolidated net revenue of Rs. 1516 crore and net profit at Rs. 46 crore, over consolidated net revenue and net profit figures of the preceding quarter that stood at Rs. 1398 crore and at Rs. 43 crore respectively in the April-June quarter (Q1 FY13-14).
For the six months period ended September 30, 2013, UFlex recorded Consolidated revenue at Rs. 2914 crore compared to Rs. 2626 crore in the same period in previous fiscal and net profit of Rs. 89 crore against Rs. 113 crore in the corresponding period last year.
While the higher revenue growth is attributed to new capacity added by the company since the manufacturing facilities in Poland and Kentucky in US commenced commercial production over the last year and also witnessing favourable demand trends for its innovative flexible packaging solutions, which saw increased uptake from clients globally whereas the profit margins are showing improvements quarter over quarter during the current year.
According to Mr. Ashok Chaturvedi, Chairman and M.D. of UFLEX Ltd, “The higher revenue growth has come on the back of increased manufacturing capacities at our disposal with the newly commissioned facilities in Poland and Kentucky which resulted in expanding our market reach and improving response time to the demand from the regions that these facilities address. Innovation and expansion are two aspects that Uflex is always eagerly pursuing and has ensured that we maintain our steady growth trajectory.”
For the full financial year ended March 31, 2013, UFlex had recorded a strong growth of 14% in consolidated net revenues at Rs. 5161 crore as against Rs. 4516 crore during a year ago, on the back of favourable demand trends globally.
Uflex’s strong manufacturing base in India, Mexico, Dubai, Egypt, Poland and Kentucky caters to global markets spanning USA, Canada, South America, UK, Europe, Russia, CIS countries, South Africa and other African countries, the Middle East and the South Asian Countries.
UFLEX’s agenda of global expansion and consolidation of its position as a truly Indian MNC (Multinational Corporation) is reinforced with its strategy of capacity expansion and adding manufacturing lines for various product categories across existing and newer locations to increase proximity to the markets, but also to bring broad portfolio of value added products to its clients at competitive price points.
The company offers its flexible packaging products and solutions globally to clients including Unilever, Pepsi, Wrigley, Procter & Gamble, Colgate, Palmolive, Nestle, Gillette, Ranbaxy, Perfetti, Joyco, Monsanto, ITC, Godrej Pillsbury, Tata Tea, Hindustan Petroleum, Indian Oil, Britannia, Dabur, Haldiram, Wockhardt, HUL, Parle Biscuit, Birla 3M, among others.