THE PACKAGING INDUSTRY IN INDIA

An Industry Presentation from McG

Madras Consultancy Group, Chennai

- A Demopack of Select Slides -

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Contents *

Packaging Industry : Global

Packaging Industry : India

Rigid Packaging Metal ContainersGlass BottleRigid PlasticsPaper 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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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

Packaging Industry : Global

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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

World Packaging Market by Region : 2001

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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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

Market for Consumer Packaging :India (2002 - 03)

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Market Share of Packaging Media : 2002 - 03(by value )

Printed Cartons

17%

Glass Bottles12%

Metal Cans8%

Others14%

Rigid Plastics18%

Flexible Packaging

22%Labels

3%

Caps & Closures

6%

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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

Comet, Silvassa

Hindustan Tin Works, Sahibabad

India Tin Industries, Bangalore

Kaira Can Company, Anand

L & T, Hyderabad (contract mfr.)

Petrox, Mumbai

Shetron Metal, Bangalore

Standard Tin Works, Mumbai

Western Cans, Mumbai

Zenith Tin Works, Mumbai

Aerosol Cans

Asian Cans Pvt. Ltd., Mumbai

(Tinplate)

Metal Impacts Pvt. Ltd., Bangalore

(Aluminium)

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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

Other Foods7%

Hotfil8%

Mineral Water13%

Edible Oil / Sauces

6%

CSD55%

Others6%

Non-Foods5%

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Market for Printed Cartons : India (2002 - 03 )

Food 18%

Matches / Agarbathi

18%

Cigarettes15%

Personal Care9%

Others18%

Pharmaceuticals15%

Liquor4%

Hosiery3%

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 :Innovations in recent years :

ROPPROPP :: Bulged / embossed caps, pressure holding capsBulged / embossed caps, pressure holding capsPlastic Plastic :: Guala caps, pressure holding caps, tamper-evident caps,Guala caps, pressure holding caps, tamper-evident caps,

pourer capspourer 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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McGMadras Consultancy Group

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Tel : 91 (44) 24939161 / 24936321

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