FLEXIBLE PACKAGING TRENDS IN 2014

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%. (Source: http://www.printweek.in/News/331179,india-will-be-the-fourth-largest-packaging-power-says-dr-d-purandeswari.aspx)

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.

UFLEX’S POLAND UNIT OPERATIONS

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.”

Future plans

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.

UFLEX LTD Q2 FY 2014 CONSOLIDATED NET REVENUE AT RS. 1516 CRORE AND NET PROFIT AT RS. 46 CRORE

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.

Expansion Plans

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.