Flexible Packaging Symposium 2009- Trends & technology Developments

Status & Potential – Flexible Packaging in India

PFFCA, India

10th November 2009

Packaging

“Packaging is the only handshake that

a Product has with the Consumer”

““Packaging is the only Packaging is the only handshake that handshake that

a Product has with a Product has with the Consumerthe Consumer””

Packaging Customers & Consumers – A Huge Widely Diverse Diaspora

Customers Customer’s Customers

…and their Customers

““If there is one industry that plays a unique role by way of bothIf there is one industry that plays a unique role by way of bothcreation of wealth through a wide range of manufacturing creation of wealth through a wide range of manufacturing activities and also by way of preserving the wealth or value activities and also by way of preserving the wealth or value created by many, many other industries, it is packaging.created by many, many other industries, it is packaging.””

Packaging & Society

““Level of development of the packaging industry in a society Level of development of the packaging industry in a society is directly related to the level of development of that is directly related to the level of development of that

society.society.””

The India Economy

• On 31 August 2009 the Indian Government released second quarter (first quarter of its fiscal year 2010) GDP results.

• Real economic growth was recorded at 6.1% YoY – up from 4.1% YoYin 1Q09. But the extraordinary thing to note about India’s growth over the last year is that in no quarter has it fallen quarter-on-quarter.

• India has not experienced a deep contraction even in this greateconomic down turn!

• Expected growth for 2009-10 at 6.5%.

• Rains not satisfactory; drought conditions in many parts of the country. Rural economy - the strong demand stabiliser so far may be affected

• Inflation at consumer level at unrealistic high levels

• A growing middle class and an open economy that exposes its citizens to the best of a developed world

The Market

Population of India

1,114,328,300

50% population - < 20 years

64% population <34 years

Demographics that encourage growth!

• Largest English speaking graduates population

• Youngest population

• Largest workforce by year 2020

• 3rd largest number of science and engineering graduates

• Largest English speaking graduates population

• Youngest population

• Largest workforce by year 2020

• 3rd largest number of science and engineering graduates

Demographics - 2007

No.of Households Category Annual Income USD Monthly Income Rs.

3 million Have all 30,000

(120,000)

80,000

13 million Have lots 12,000

(18,000)

40,000

50 million Have more 4,000 16,000

100 million Have some 1,500 6,000

30 million Have nothing 200 700

Indian House hold Spend

• High percentage of disposable income on food

• Affordability, Accessability and Variety dictate purchase patterns

• Price points a key factor that determines purchase pattern

• Low brand identification when faced with a rising price situation.

• Low priced unit offers account for 40% of total sales in the consumer market

The Packaging Industry - A Perspective

• World packaging industry has been growing at 3-5% per annum

• Around 29% in the Asia Pacific region (Australia, Japan, China are the major packaging intensive markets today)

• 80% of global packaging is consumed by 20% of the population

• Also, 80% of the worlds population has access to only 20% of

packaging that is produced

Per Capita Packaging Consumption

380

220

54

36

9

74

North America

Europe

Latin America

Asia

India

World average

(US $)

Packaging - The Growth Pattern in India

• MID EIGHTIES – 4 - 4.5 PERCENT

• MID NINETIES – 18 PERCENT

• CURRENT INDEX – >12 PERCENT

Packaging Consumption Pattern

• 1995 – 5 MN TONNES• 2005 – 10.5 MN TONNES• 2010 – 21-22 MN TONNES• Packaging output today valued at Rs. 650,000 Million• Expected to double in 5 years • Estimate based on

– 12% average growth– 5% growth in Fresh Agricultural Processing– 10% growth in Fresh Horticultural Processing– PDS products moving into packaged forms

Trend Influencers

• Consumer consciousness

• Consumer convenience and willingness to pay

• Brand association

• Quality claim

• Perceived value addition

• Exports

The Forms of Packaging -

INDIAN CONSUMER PACKAGING MARKET

FLEXIBLE PACKAGING

21%

RIGID PLASTICS18%

PRINTED CARTONS

17%

METAL CANS 6% GLASS BOTTLES

10%

CAPS & CLOSURES

5%

LABELS4%

OTHERS19%

Packaging by Form

• CAG growth of packaging as a whole estimated at 12%

• Flexible packaging at 12%

• Folding Board Sector at 15 to 18%

• Labels at 20%

Industrial growth estimates (%)

Processed foods - 20+Pharmaceuticals - 10+Healthcare - 15Personal care / Home care - 8-10Engineering / Electronics - 10+Software - 20+Textiles - 7Chemicals - 8Consumer Durables - 8Toys - 7Incense sticks - 10 +

(Base 2007)

Flexible Packaging Demand Forecast

Year Volume Sales Value

Kt Rs. Mn

2007 1070 107,000

2014 3109 (at 16-17%) 311,000

3600 (at 20% growth) 311,800

Flexible packaging by substrates (by Volume)

Flexible packaging by substrates (by Value)

Product market size comparison

Processed Food 

Pan Masala

Tea & Coffee

Biscuit

Soaps / detergent 

Spices

Lube Oil

Shampoo

Prophylactics

Confectioneries

SnacksOthers

Flexible Packaging Demand Estimates

Adhesive laminates 432,000

Co.extruded films 238,000

Extrusion coatings/laminates 216,000

Solventless lamination 184,000

Total 1,070,000

(2007 - 08 figures by tpa)

Flexible Packaging Market drivers

• Beverages / Liquids:– Fruit flavoured drinks, water , isotonic liquids

• Non – Food:– Agrochemicals, Health & beauty products, Detergents, Auto /

electronic components, floriculture• Food:

– Frozen food, sauces, condiments, dry fruits, snack food, RTC / RTE food, powdered beverages, dry mixes

• Pet Food• Biodegradables & Aqua soluble films• Medical packaging• Single serve packs

Organised Retail – Vital Statistics

• Indian retail: Rs.10,000 billion

• Organised retail - 3.5% of entire retail and 1.23% of GDP.

• Organised retail estimated at Rs.841 billion by 2010

• Retails CAG estimated at 10-15%

• Modern format segment CAG estimated at 40%; By 2010- will account for 10-12% of retail trade

• Share of expected investment in Indian retail in next 6-7 years

• Department stores- 2%

• Warehouses- 9%

• Hypermarkets- 32%

• Supermarkets-33%

• Others-23%

Organised Retail Segment Analysis

Apparel36%

Home3%

Entertainment4%

Food & Grocery14%

Healthcare3%

Footwear13%

Durables10%

Jewellery & Watches17%

Trends in Packaging…

• Package design and packaging lines will continue to evolve around key issues of automation, convenience, safety and quality.

– Automation

– Sustainability

– Convenience & Safety

– Health & Wellness

– Consumerism Challenges

– Specialisation

Trends in Packaging…

• Microwaveable trays, tailor-made meal solutions, modified atmosphere

packs and easy opening & closing features continue to gain momentum.

– Anti-fog

– Flexible Can / Stand-Up formats

– Feel-good or Easy Peel

– Transparent Barrier Coatings

– Oxygen Scavengers

Flexible Packaging development

• Micro ovenable Food

• Frozen food

• Meat, meat products

• Marine products

• Retort / Sterilised packs

• Cold seal

• Easy seal / Re-sealable applications

• Easy tear applications

• Specialised Pouches:

– Reclosable / Stand up / Spouted / Laser cut / Flexible bottles

Adding Value through Pre-formed Pouches

• Value Added Funtoosh Pouch– Funtoosh Profile

– Block Bottom

Block Bottom

Shaped Stand Up

Gusseted

Spouted

Profile

Flexible packaging Innovations

• Retort / Asceptic pouches

• Anti fog films

• Holographic packs

• Mini Thermoformed packs

• High barrier plasma coated films

• Zipper bags

• Large liner bags

• Label technologies

We have played a prominent role in the development of stand-uppouches for many different food markets right from the start byadopting a consistently innovative approach. We are now ingreat demand as a provider of sound packaging advice innumerous fields.

Retort Packaging

Holographic Tube Laminate

• Holographic Web– Product on the wish list of

leading global oral-care companies for some time, many suppliers making all out efforts to develop.

– Using in-house expertise on holograms, we developed a prototype of a Holographic Tube Laminate, initial resultsencouraging. We are now working on commercialisation.

• International Patent applied under the PCT convention and in other countries of interest

Fusion of Holographic & Print imagery

A new product development involving creative fusion of the print graphics with hologram image

Innovation :Innovation :

Inter-play of the conventional print images with suitable hologram patterns and its conversion into a desirable laminate for a kiddy product

The packaging hugely complemented the branding requirement of fun, excitement, and catching the attention of the kid in retail

‘Glow in the Dark’ Inks

• Glow in the dark inks can be used to create excitement among kids

Glow-In-Dark View Normal View

GSK – Horlicks Holographic Laminate

A high barrier Holographic Laminate for a hygroscopic health drink

Innovation :Innovation :

A first-of-its-kind holographic laminate for a health beverage, which meets both the requirements of barrier & premium appeal

Speciality Pouches : Profiles / Flat-Bottom

• Value adding profile pouches by providing stand-up features for retail prominence

• Topping-up the profile pouches with the reclosableoption through a zipper lock

• Pre-formed block-bottom pouches with tapered-top for enhanced retail appeal.

• Pick-fill-seal m/c available for these pouches.

Spouted Pouch for Convenience

• Spouted Pouch for Liquid Packs for convenience & reusability

Innovation :Innovation :

• An ‘Easy Dispense’ mechanism coupled with Flexible pouch

• Registered matt & gloss effect further enhances the pack look

• Shaped Standup Pouches:

Speciality Pouches : Profiles / Closures

Packs with Easy-peel lid

Thermoformed Packs for Convenience

Bottle to ‘flexible mini bottle’

Full-body Sleeve for Contour Packs

• Attractive decoration for bottles offering 360 degree coverage, with attractive, high gloss, reverse printed graphics.

• Customer can eliminate pre –printed bottles, hence flexibility in supply chain.

• Difficult contour packs are given forms through innovative print design reproduction and sleeving

BACK SIDE PRINTING

SHRINK SLEEVES …

Bundling using Shrink Sleeves

Super Saver schemes

INNOVATIVE IDEASINNOVATIVE IDEAS

ResinsFilm

Petrochem

Flexible Conversion

Product Filling

Consumer

Fight for the Value Chain !

Flexible Packaging

FMCG Manufacturer

Pouching Components

Roll Form Output FFS Packing Line

Pouching Pouch Filling

Filling Machines

Value Creation ThroughForward Integration

Flexible Packaging

HologramsMetallization

Films

Prepress & Cylinders

Inks

Printing & Conversion Machines

Extrusion & Gravure Coating

Coating Materials

Adhesives

Value Creation ThroughBackward Integration