Guest editor: Bharvi Shukla | Vice President-Business Development | BST eltromat India Pvt. Ltd.

Social life in India changes quickly from the traditional way to the international way and these two concepts of lifestyle merge together. Daily life in metro cities has faced drastic change considering the last 10-15 years.  Nowadays most of the time in everyday life is spent outside the home. In young generation there are more and more working couples, and that kind of lifestyle changes is also affecting the tier 2 and tier 3 cities. This social impact has changed food habits: earlier families used to have warm cooked food, now consuming more and more ready-to-eat food. Masala required for cooking is now used from available readymade masala for example. For middle class families, storage of grains / staple food for year in season changed to purchasing in small quantity when it is required. At the other end the rural market has limited daily spending capacity for livelihood, which requires items of daily needs in small quantity as and to assure its quality packaging material is required.

All these changes lead to growth of Food Processing Industry which is connected to Packaging Industry, to retain / improve the shelf life of food. At the other end presently, grains / fruits / spices are produced in farms and transported in open / jute bags to storage. Storages are not adequate resulting wastage in between till it reaches the consumers – poor storage as well as poor handling facilities are generating wastage. Considering this situation the Government of India had also special drive to boost Food Processing Industries in the countryside only to have efficiency in the system. In the 12th 5 year development plan (2012-2017), allocations are increased significantly compared to previous one. Food parks, cold storage, cold chain at rural areas to boost the village economy are planned so preservation and value addition in Food Processing is required.

All these lead to all around growth in Packaging Industries – rigid as well as flexible:

  • India is 6th largest Packaging Market in world having growth of 12-13% growth (CAGR) during next 4-5 years to become 4th largest global market worth of US $ 42 bn
  • FMCG companies are largest consumes Flexible Packaging – 38%
  • Rigid Plastic Packaging sales are projected to grow around 16% to reach 293 bn to 2016
  • Flexible Packaging sales are projected to grow 10% per annum to reach 311 bn in year 2016
  • Health Care Packaging is projected to grow around 9% to reach 23 bn in year 2016
  • Other misc. packaging to grow around 5% annum to reach value of 547 bn by 2016
  • India is having 1/6th population of world and required food and groceries contribute 70% of total retail sales
  • Flexible Packaging is almost 65% of all packaging forms which is major share and likely to grow to reach more country side market
  • Edible oil, dairy products, detergents, cosmetics is target market for the Flexible Packaging (single material or laminates).

Per capita consumption of packaging in India is around 4.3 kg / person annually considering Germany’s 42 kg and Taiwan 20 kg. It is low compared to other developed markets, and it shows the potential of growth. If we see some sector wise situation, Processing Food Packaging is 48%, Personal Care Packaging is 27%, Pharma 6% and rest is 19%. The Food Processing Industry is growing around 6-7%, this is higher compared to Agriculture Sector growth 4%.

Resulting at the end Plastic Packaging is growing 20-25%, Rigid Containers at 15%, PET bottles 25% and Tubes are 10-12%. Considering this all, total market is US$ 670mn. 40% of paper produced domestically goes to packaging area, which is expected to increase more, considering demand of Premium Packaging – thanks to multi brand retail chains.

Many international brand owners are present and in line to have their own share from the “India pie”. Changes in buying pattern of modern Indian youth will generate more space for the retail chain / stores. So even traditional provision stores are also changing their display / arrangements to attract the youth against multi brand retails chain.

Rigid Packaging will be covered with Label Printing as brand owners would like to differentiate their product among all other products in retail chains. The estimated growth of Label Market is around 10% per year and estimating demand set to almost double to US$ 24 bn in next 5 years. Many international players are choosing M&A way to increase their business, rather than starting a green field unit. This leads shear competition among other players to produce best as per the international standards. However, the consistency is possible with automation and latest equipment.

Corrugation Packaging – at this moment companies are fragmented, however, market is expecting growth of 7-8%. Mainly it has sheet fed machines to print, but industry demand to have light weight boxes with good quality with attractive prices for large sized package and logistic display. Four major trends are observed at this moment:

  • High end automatic packaging line and high end converting machines
  • Boost in fruits and vegetables segment – top quality graphics
  • Entry of modern retails needs multi-coloured photographic images
  • New possibilities on printing on brown outer layers.

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