Packaging is an integral part of a product. Be it while transporting, while shelving or even using. FMCG industry has always relied upon quality packaging for their products so as to ensure the products consumed are hygienic. We have Mr. Vimal Kedia, Managing Director, Manjushree Technopack Ltd taking us through the processes and mechanism of the packaging players in the country.
Aadeetya Sriram (AS): Tell us about your company, when did you start-up, how much have you invested?
Vimal Kedia (VK): We started Manjushree Technopack (earlier known as Manjushree Extrusions) in 1984 as a small facility in the outskirts of Guwahati. We began with developing flexible packaging solutions for the North Eastern region before setting up their manufacturing unit in Bangalore in 1994. Like all start-ups, we did have our share of struggles. We started by investing some of our saving and a bank loan of Rs 30 lakh. Today, we stand with over 27 years of packaging expertise in India and have grown to become one of the largest rigid plastic packaging majors in the country. Manjushree Technopack Ltd. is a Rs 216 crore listed public limited company. We are listed on the BSE and NSE.
We manufacture specialty rigid plastic packaging products for domestic / export markets and cater to the needs of all major brands in the FMCG, Pharma and Food & Beverages sectors.
AS: Where do you have your manufacturing units in the country, how much is your annual capacity?
VK: We are headquartered in Bangalore and have both our manufacturing units in Bangalore’s Bommasandra Industrial Area. We have two large, well-equipped state-of-the art facilities and soon will be adding two more facilities as well. The annual capacity stands at 40,000 metric tonnnes per annum, which is the largest in the country.
AS: What is the sort of clientele that you are catering to?
VK: Our clientele includes leading names from the FMCG, F&B and Pharma fraternities; largely covering industries like confectionery, carbonated beverages, tea, personal care, Pharma, liquor and others. We work with all majors including Coca Cola, PepsiCo, Cadburys, GSK, DelMonte, Nestle, Unilever, Tupperware, Micro Labs, Tata Tea, Himalaya Drugs, Pfizer, Radico Khatian, Diageo, and prominent international names as well.
We regularly export to USA, South Africa, Australia, Gulf, Maldives, and South East Asian countries. It constitutes about 8% of our turnover.
AS: Could you elaborate on the scenario of packaging industry in the country? How has it evolved over the years?
VK: The packaging industry in all forms continues to grow by 15-20% YOY, in spite of the unorganized sector in the country. As customers become more exposed to modern retail, product visibility has shot up substantially, leading to sales of products which were earlier confined to a certain consumer segment alone. The unorganized sector is slowly dying out as cost of finance, manpower and other costs are going up – there is consolidation in the industry that is overdue and will happen soon. Companies are slowly learning that along with cost benefits, quality also needs to be addressed. There is a huge up-surge in demand for packaging across all industry verticals and all packaging materials such as Paper, Glass, TIN and Plastic. While all have different growth percentages, plastics have the highest percentage growth. Various factors can be attributed to the growth in the packaging industry. The demand from FMCG and F&B sectors has a huge role in the growth of the packaging industry and continues to contribute a large share. Customers and their changing lifestyle patterns also contribute a good deal along with the willingness to spend a little more for high quality packaging; packaged and ready-to-eat foods, either frozen or preserved is an example.
Also, the availability of specialty materials and technology which aid in longer shelf life and better preservation are helping the packaging industry bring all kinds of products into its domain. We see that there is more room for growth and innovation.
AS: What are the current trends & patterns in terms of packaging of products?
VK: Speaking specifically of plastic packaging, we have seen a trend, particularly among FMCG companies, to move packaging from other forms like glass, tin and paper to plastic. Plastic offers advantages of convenience, transparency, better shelf display properties etc., and in many cases, even lower costs. It also helps that plastics are 100% recyclable and now there are several advanced technologies to make plastics bio-degradable. Some of the other trends we witness include a) Use of ‘Light-weighting’ technology which results in reduced weight of containers and optimized use of raw material, reduction in processing costs and lower carbon emissions; b) Introduction of Smaller – packs by leading FMCG majors, to match the consumption patterns of the audience, especially in smaller towns and rural areas, For ex: Fruit Juices and Beverages; Shampoo sachets; Talcum powders; Pickles, etc c) Introduction of multi-layer packaging, for longer shelf life of consumable products like ketchup, etc c) Use of recycled material in existing package, use re-cycled PET within their package; d) Use of alternative material for packaging: A few international companies are experimenting with plant and fossil fuel based derivatives to produce an eco-friendly bottle which is easily compostable.
AS: What is the role of packaging in the retail industry? How is packaging vital for operation of efficient logistics?
VK: Packaging plays a very crucial role in marketing. It can make or break a sale. "Jo Achha Diktha Hai, Wohi Biktha Hai" (only whatever looks good, sells). Packaging has moved beyond the function of just protecting the integrity of the product and increasing its shelf life. While these are most vital, there are other functions it performs. With almost 70 percent of purchase decisions being made in the large retail formats / stores, packaging has become a medium of visual communication which can aid a sale by appealing to the senses of a customer. It has an influence on his buying decision. Today, a package needs to work a lot harder to be a winner pack. Apart from the requirements like safety and longevity of contents, a good pack today should have elegance in shape, be fashionably labeled or aesthetically designed, comfortable in use and must provide clutter breaking solutions to customers’ needs.
Packaging does have an impact on logistics and the impact varies across cost and efficiencies. Logistics, for many companies, forms a sizable chunk of the cost structure and packaging in turn has an impact on the cost of logistics. For example, PET performs (a test-tube like structure which is the pre-stage or initial form of a PET bottle, which is later blown to take its actual size) are much lighter and occupy far less area when compared to fully blown PET bottles. This reduces cost of storage and transportation and makes it possible to transport large quantities in less time. In addition, a well thought out package can also help in better ‘on-shelf performance’. However, it must be said that, packaging must first address the needs of the consumer, if it has to serve its purpose. They key is to arrive at a packaging solution that works for the customer and offers efficiencies in logistics.
AS: Talk us through the technology set-up of your company as well as packaging industry in general?
VK: Manjushree has always been at the forefront of innovations and bringing in new technologies. We were the first ones to bring in 6-Layer Multilayer technology to India for Unilever to produce plastic bottles for packing ketchup. These bottles have a layer of EVOH, which acts as an oxygen barrier keeping the products safe, fresh and aroma intact. Multilayer bottles are a direct replacement for Tin and Glass. Our multilayer containers are also exported for packing fresh fruits and slices with an 18 month shelf life. We are also at advanced stages of developing newer packaging formats for flavoured milk, which is currently available only in pouches and tetra packs. With a plastic bottle, the consumer will have the freedom to use and close it multiple times, without making it a one-time use container.
Another recent innovation from our stable is the PCO 1881 neck in our PET Preforms Portfolio. The preforms we have introduced are lighter in weight by 5-7% and have resulted in tremendous savings for our juices and CSD / beverages customers. We are actively looking at the technology of packing Beer in PET, which is a very recent development in the packaging community.
As far as research goes, we are trying to bring in RPET (Recycled PET) in the mainstream. As a first step, we will try this out with Non-food /Non-Direct contact applications like shampoo bottles, confectionery jars, lubricant jars and others. In the coming years, we expect to see an increase in customers demanding recycled packaging and eco-friendly products.
AS: What is your annual turnover & your future plans in the pipeline?
VK: We crossed the Rs 200 crore mark and registered a turnover of Rs 216 crore in the last fiscal and are growing at the rate of 30% YOY. Our current capacity stands at 40,000 MTPA which is the largest in the country. We commissioned one Husky and four ASB blow moulding machines in 2010-2011. We are planning to add capacities this year in the PET Preforms and containers verticals. As per our expansion plans, we have also committed investments of Rs.150 crores for two new facilities at Bidadi and Harohalli Industrial Areas in Bangalore. They are expected to be operational by mid 2012.