Small is big

According to the 2011 census 68.84% of Indians live in rural areas. (Wikipedia) No wonder then that the Indian rural market offers great opportunities and potential to companies as two-thirds of the country’s consumers are residents of this belt.  Almost half of the national income is generated in the rural areas. In 2007 the rural retail opportunity was estimated to be approx USD 34 billion which is expected to touch USD 58 billion by 2015.

However, a large proportion of India’s rural population remains poor and unable to afford products with a steep price range and that is a major concern for manufacturers. In this regard the concept of products in small packages/sachets has appealed to one and all.  Shampoo sachets were the first to be introduced in this trend at a minimum price of Re.1 targeting the rural consumer. According to an ORG-MARG data, 95% of total shampoo sales in rural India is by sachets. The demand was fuelled by largely price conscious consumer residing in rural and small towns. 

With time and the increasing popularity of the sachet rural marketing became high on the agenda of most of the FMCG companies who came up with their products in small packets and at a basic price. From shampoos to hair oil to toothpaste to biscuits to soups to chocolates to cold drinks/juices to various other items sold like hot cakes.  

Low purchasing power of a majority of the Indian consumers has ensured that the demand for small packaging does not die down. Flexible packaging has gained mostly in this trend owing to its low cost. Uflex Ltd. is at the helm of delivering innovation packaging solutions through its constant and improved R&D.

Packaging which once upon a time had the simple purpose of protecting the packed products has come a long way. Today flexible packaging is an art, science and a technology in itself. Progressive R&D has also ensured that packaging has become an integral part and a reflection of the consumers’ personality and lifestyles. 

Small packets and sachets have allowed the rural consumer to user durables/consumables in their everyday lives which an urban consumer would also use thereby improving their standard of living. 

The rural market is a minefield of opportunities for any marketer provided that his plans are in tune with the specifics and requirements of the market.  By capitalizing on this trend the flexible packaging industry can invest in advanced sachet packaging technology which can help the manufacturers achieve the flexibility and efficiency and ease for which these packs are intended. The little pouch is a powerhouse of benefits which extends from the manufacturer to the consumer.

Uflex invests $400 million to expand

India’s $1 billion film and flexible packaging maker Uflex Ltd. has given a nod to a plan that includes expanding plants and establishing new factories in India and overseas.

The firm, one of the largest and fastest-growing flexible packaging firms in India, has drawn up a three-year growth strategy.

“The expansion plan … envisages opening new plants in new locations inside and outside India,” said President R.K. Jain, in an interview with Plastics News at the company’s headquarters in Noida, near Delhi.

“We have earmarked an investment of $400 million,” said Jain.

The move is aimed at doubling the company’s annual revenue to $2 billion in four to five years.
In the past three years, Uflex has opened plants in Egypt, Poland and the U.S., besides India, and expanded its Mexico facility.

“We have now consolidated and stabilized our operations in these markets and we are now ready for next phase of expansion,” he said. Uflex has not identified sites for the proposed plants. “We have no plant in the Far Eastern market, so that could be one of the regions on our radar,” he said.

Uflex controls about a 30-35 percent share of India’s $4 billion packaging industry.

UFLEX LTD Q1 FY 2014 CONSOLIDATED NET REVENUE AT RS. 1398 CRORE AND NET PROFIT AT RS. 43 CRORE

New Delhi: August 6, 2013 – Uflex Ltd, the Bombay Stock Exchange (UFLEX: 500148) and NSE listed, India’s largest flexible packaging company, has registered the consolidated net revenue for the quarter ended June 30, 2013 at Rs. 1398 crore as against Rs. 1376 crore for the same period last year.

The firm’s consolidated net profit for the June quarter of FY 2014 stood at Rs. 43 crore as against Rs. 56 crore for the same quarter last year. However, sequentially, the revenue and net profit for quarter ended June, 2013 viz – a – viz quarter ended March, 2013 has grown by 13 % and 5 % to Rs. 1398 crore (Revenue) and Rs. 43 crore (Net Profit), respectively.

The higher revenue growth is attributed to new capacity expansion globally and increased uptake of innovative flexible packaging solutions offered by the company across sectors. Uflex had added capacities from the newly commissioned manufacturing facilities as part of its expansion in Poland and Kentucky during the previous financial year. Collectively the two facilities involved investments of about $150 million.

The polyester films plant in Kentucky, in the US has annual production capacity of 30,000 metric tonnes, and similar capacity is available in Wrzesnia, in Poland. With the new manufacturing facilities and other expansions in place, UFLEX is all set to achieve the next milestone of $2 billion revenue mark over the next couple of years.

According to Mr. Ashok Chaturvedi, Chairman and M.D. of UFLEX Ltd, “The higher revenue growth has come on the back of increasing manufacturing capacities across our facilities in Egypt, Mexico, Dubai and India, in addition to the new facilities in Kentucky and Poland to cater to the increasing demand trends. Innovation, expansion and harnessing growth opportunities at the right time has been the key to our strong foothold in the flexible packaging market globally.”

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.

Packaging Trends to Look Forward in 2013

Last year had been a good one for the global flexible packaging industry. Emerging markets in Asia and Latin America led to a strong resurgence after the global recession, and it is projected that flexible packaging will be a $100 billion industry by 2016. 

This year, packaging industry players are looking forward to new efficiencies and economies of structure. Reorganizations, consolidations, lean manufacturing and sustainability are some of the measures they consider to tackle the current situation. Apart from this, flexible packaging industry is heavily relying on other areas such as performance metrics and looking more stringently at project proposals. 

Here we will discuss packaging trends to watch closely in 2013:

Smart Packaging: With changing lifestyles and consumers being more demanding, active and intelligent packaging focus more on consumer benefits such as food quality and safety, freshness and information rather than  specific retailer and manufacturer driven benefits.

Bio-Based Plastics: Recyclable PET made from renewable resource is projected to offer significant growth potential in long term. Hence the corporations involved in the soft drink industry, are investing heavily in the development of this material.

Stand-up Pouches: Bottles and cans have become the things of past. Stand-up pouches are preferred more because of their flexibility, sustainability and convenience. They are one of the most innovative marketing approaches to stimulate the sales of a stagnant brand.

Retail Ready Packaging (RRP), a method of packaging to make the products easier for the retailers to stock, continues to gain traction in North America more and more retailers have started to consider implementation, and others broaden the scope of existing initiatives into additional categories.

Social Media’s Role in Packaging: Marketing strategies are changing and internet continues to revolutionize how we find, buy, sell, and interact with brands and their products or services. While traditional marketing focused on pushing messages out, nowadays, it's more about getting found by customers. Hence, market players need to provide value and earning customer loyalty instead of simply conveying message to the consumers and hoping it will stick.

Along with this, packaging industry professionals must not ignore the consumer voice. Studying consumer culture will always reveal packaging trends and labeling needs in future. Considering the lifestyle changes and economic growth, Uflex Ltd. always follows a strategy with innovation, proximity to customers to provide better services and quick deliveries and focus on operational excellence.                                       

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