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Demand Set to Far Outstrip Supply as India's Packaging Sector Soars

While excess packaging practices are being curtailed in many mature markets, India weighs in with less surplus product padding per person than most. But that may be about to change, according to exhibitors at New Delhi's PackPlus expo.

Photo: Packaging machinery: Is India the new frontier for the sector’s manufacturers?
Packaging machinery: Is India the new frontier for the sector's manufacturers?
Photo: Packaging machinery: Is India the new frontier for the sector’s manufacturers?
Packaging machinery: Is India the new frontier for the sector's manufacturers?

The packaging industry is booming in India. The country has a massive population of 1.3 billion, and one of the fastest-growing economies in the world, with the IMF forecasting 7.4% GDP growth for 2018, rising to 7.8% in 2019. Significantly, that growth is being largely driven by consumer demand, which is good news for the industry as consumer products require a lot of packaging.

Moreover, the packaging sector is still undeveloped in the country. The Indian packaging industry constitutes only about 4% of the global market, whereas Indians make up 17.7% of the world's population. Furthermore, the per-capita packaging consumption in India is still low at 8.7kg per person compared with Taiwan's 19kg and Germany's whopping 42kg. Demand for packaging is consequently rising across most sectors and set to do so for some time.

Greencore Packaging, based southwest of New Delhi in neighbouring Rajasthan, sells a range of packaging boxes, pallets and sheets all using a paper honeycomb design that allows for products that are strong, light, inexpensive and recyclable, all of which is of increasing importance to the sector. Akhil Jain, a Greencore Director, was keen to emphasise the honeycomb's high performance and was bullish about growth prospects, saying: "Our packaging uses very lightweight material that can be recycled up to 17 times. Pound for pound, the honeycomb design makes our cardboard boxes stronger than steel.

"For us, India's fast-expanding domestic economy is the primary driver of our growth, but we are also looking at exporting to the Middle East."

The main expo hall was filled with many different types of packaging and processing machines, with a wide diversity of specialised packaging applications on offer. One example was GMP Equipment PVT from Ahmedabad. The company has expanded the range of packing it offers, as Sales Executive Vaibhav Shah explained, saying: "We started out primarily servicing the pharmaceuticals sector and specialising in liquids packaging. Now, we manufacture 13 different machines and we are exporting to 80 countries. On display at this show we have our bottle cap machine which can handle and cap 40 bottles a minute. I think this has been a good trade show for our business."

Modtech is another well-established Indian packaging-machine business, with an operating history stretching back 34 years. The Gujarat-based company has operations in the US and the UK and sells into 38 countries. It is best known for investment casting machines, using one of the oldest methods of metal forging which still remains popular today. Like GMP, Modtech has steadily increased the number of machines in its product range, and is now also active in industrial automation.

Outlining the company's current scope, Marketing Executive, Keval Goswani, said: "Modtech is India's largest investment casting machines manufacturer. We export to over 25 countries – we even export to China."

Photo: Gandhi Automations: Automation specialists.
Gandhi Automations: Automation specialists.
Photo: Gandhi Automations: Automation specialists.
Gandhi Automations: Automation specialists.
Photo: Markem-Imaje: A product identification leader.
Markem-Imaje: A product identification leader.
Photo: Markem-Imaje: A product identification leader.
Markem-Imaje: A product identification leader.

Mumbai-headquartered Gandhi Automations PVT is one of India's leading loading-bay door and equipment manufacturers. Established 22 years ago, it claims a 70% domestic market share in India and sells to about 15 countries in Asia, the Middle East, Europe, Africa and the US. This year, the company's stand was built around an attention-grabbing, several metres high warehouse loading-bay door.

The company's sales executive, Akshay Shah, however, was one of the many to note the long decision-making process involved in securing orders, saying: "At this show we are focusing on getting leads rather than sales, although so far it has been a little disappointing. Our products are big investments, even for large companies. Inevitably, they need time to take measurements, compare costs and quality and review their options, before making a decision to buy."

Although the majority of exhibitors and attendees were Indian companies, there were some international businesses in attendance – including Switzerland's Markem-Imaje, a subsidiary of the Illinois-headquartered Dover Corporation. A market leader in printing systems for product identification and coding, the company now operates in more than 130 countries and opened its Indian operation in 1998.

The company's Territory Manager, Arvind Singh, also saw the trade show as a long-game business approach, saying: "This event serves as a great opportunity for our clients to come, see what's out there and catch up. The focus for us here at this show is not just on short-term sales, but is also on long-term relationship building."

Another European firm attending the show was Bericap, a 100-year-old German company that manufactures and sells plastic closures for food, beverage and industrial markets. It operates in more than 100 markets and has already had a 15-year presence in India. Regional Sales Manager Nitin Kulkarni again reported less than roaring trade at the event, saying: "Our first day at this show wasn't so great, but it has got better as it has gone on. We are largely here for meeting up with clients and finding potential leads."

Another active packaging firm working in the food and beverage sector was Bajaj Processpack. Established in 1988, the company manufactures processing-plant equipment for fruit, vegetable and dairy products as well as packaging. The company takes an end-to-end approach to packaging, providing clients with everything they need, as Regional Representative Anupam Chowdhury described, saying: "We can offer a complete farm-to-fork processing solution. We can design and install the plants, we can put in place the logistics, and also the machines to process and package food products."

Bajaj Processpack, headquartered in Uttar Pradesh, has now set up about 500 small to medium-size projects in more than 30 countries across Asia, the Middle East, Africa and South America. In Africa, business has been particularly brisk, with projects in Botswana, Lesotho, Tanzania, Kenya, Ethiopia, Benin, Chad, Nigeria, Burkina Faso, Mali and Guinea Bissau.

Among the most common products on display at the show were paper-cup-making machines, with a wide selection on offer. The key differential was the rate of production, which ranged between 40 to 100 cups a minute. According to Narman Singhai, a representative from Global Link Impex, a Rajastan-based manufacturer of high-speed paper-cups machines, business in paper cups is booming due to worldwide demand for caffeine. He said: "The global addiction to coffee is playing a role in keeping up demand. Paper-cup machines are in high demand. Our business is definitely growing here in India. We've been around for a long time and I've definitely noticed increasing demand."

Another issue that is beginning to make a positive impact on the sector is the fact that plastic products, such as cups, food containers and straws, are under attack worldwide on account of the environmental damage they cause. With this in mind, Global Link Impex is now branching out into manufacturing paper-straw-making machines.

Explaining the rationale, Singhai said: "We've done this largely in response to client demand. We have already invested in the new machinery required. In many ways, the techniques and technology used is very similar to that required for producing cups."

Photo: PackPlus 2018: India’s total packaging, processing and supply-chain event.
PackPlus 2018: India’s total packaging, processing and supply-chain event.
Photo: PackPlus 2018: India’s total packaging, processing and supply-chain event.
PackPlus 2018: India’s total packaging, processing and supply-chain event.

PackPlus 2018 took place from 25-28 July at Pragati Maidan in New Delhi.

Geoff de Freitas, Special Correspondent, New Delhi

Content provided by Picture: HKTDC Research
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