In an exclusive interview with SME Times, Vimal Kedia, Managing Director, Manjushree Technopack Ltd said that the packaging sector in India is facing major roadblocks due to forex fluctuation, policy changes, increase in taxation and interest rates, thereby discouraging new investors from putting up new facilities and also deterring existing players from increasing their capacities.

Excerpts of the interview...

What kind of packaging services do you provide to your clients? And, how do you cater to the packaging needs of a large section of the FMCG fraternity?
Vimal Kedia: Manjushree offers specialty rigid plastic packaging solutions to leading brands in the FMCG, Pharma and Food & Beverage segments, in domestic as well as export markets. Some of the companies we offer packaging solutions to include Coca Cola, PepsiCo, Cadburys, GSK, Nestle, Unilever, Pfizer and DelMonte. In 2008 Manjushree entered the PET Preform segment with specific focus on the carbonated beverages, packaged drinking water, juices etc. After increasing capacity over the years, we have grown to become the largest manufacturer of PET preforms and the largest convertor of PET in South Asia with a capacity of 75000 MTPA. While PET preforms contribute to the largest portion of the business in terms of tonnage, we have an equally large contribution to the turnover, from PET containers and bottles. Most recently, Manjushree has entered the liquor and personal care segments. Some of the clients that we have started work with include Diageo, Bacardi, United Spirits Ltd, and Radico Khaitan. From the personal care segment, majors such as Himalaya Drugs Company have been signed on. We have also started exports to Africa, Thailand, Middle East and some of the European countries. It is our efforts and focus at providing innovative and workable packaging solutions that make us a favourite with customers. What also keeps us ahead is the quality and experience we bring to the table. We are recognised for our expertise in packaging technology, state-of-the-art facilities and the capabilities of our research & design arm; Mphinite. All this have helped us grow in terms of capabilities and capacity and make an impact on client businesses.

India's packaging industry is growing at 15 percent at the moment. Where do you see the industry heading in the coming years?
Vimal Kedia: The Indian packaging industry has taken great strides since its infancy over the last few decades. The packaging industry as a whole has been witnessing phenomenal growth of 15-% Y-o-Y, and across all formats of packaging including PET. Speaking specifically of the rigid packaging segment; PET or plastic packaging segment is most dynamic, witnessing many changes, innovations and growth. Over the last few years the industry has grown to the status of a leading sector in the country with a sizable base comprising of organised and unorganized players. We foresee an annual growth of 15-20% every year. Like for any other industry, there are a few roadblocks - factors like Forex fluctuation, policy changes, increase in taxation and interest rates that discourage new investors from putting up new facilities. It may also deter existing players from increasing their capacities. But over the next few years, we expect positive sentiments to prevail.

What are the regulatory issues concerning the packaging sector? What should the government really needs to do to promote this industry?
Vimal Kedia: The new packaging norms laid down by Legal Metrology (Packaged Commodities) Rules, 2012 will definitely increase the financial burden on the Food Processing and FMCG Industries.  The current manufacturing standards include various machineries and equipment which were designed to cater to certain sizes of packs.   However, with the new rules coming in, everything needs to be re-aligned right from filling machine, testing procedures, primary packaging material and secondary packaging material. Primary packaging materials include items like rigid PET Jars and Bottles or laminates, pouches, can, etc.  Secondary packaging materials include mono-cartons, corrugated boxes, etc.

Where do you hire packaging machines and equipment from?
Vimal Kedia: We have equipped ourselves with the latest state-of-the-art machines and technology and with our expansion plans underway, we will invest more into machines that are processes automated. We have partnered with Nissei ASB, Japan for our blown containers and bottles; Husky, Canada for our preform manufacturing systems and other technology from Europe and America. With further expansion in the coming months, we will ensure we are equipped with the best technology in the industry.

What is your business specialty and how do you plan on expanding your business?
Vimal Kedia: As mentioned above, our expertise and specialty lies in providing quality and innovative rigid PET packaging solutions to various leading brands in the FMCG, Pharma, Food & Beverages and Alcohol segments. We are today the largest convertor of PET in the industry and have been recognised over the many years as a name to reckon with. As part of our expansion plans this year, we are setting up a new greenfield manufacturing unit in Bidadi, Bangalore.  This plant is spread over 15 acres and is dedicated to manufacture PET performs and will be the only LEED Certified Platinum factory in the industry. The construction of the manufacturing facility is well on its way to completion and will be operational by the end of 2012. In order to increase the volumes and production capacity, we will be adding state-of-the-art machinery to the new plant which will enhance its total capacity. The current capacity of 50000 MTPA will grow to 75000 MTPA, registering close to a 30% increase. With this enhanced capacity we will be further strengthening our position as the de facto leader in the rigid packaging space in the country. We expect to achieve turnover of 100000 MTPA by 2015-16, from the exponential growth that will result with the full implementation of the new plant. An additional Greenfield project in Harohalli Industrial Area is part of the plan, for which land has already been procured from the industrial board. This plant is expected to be commissioned by September 2013.

(Namrata Kath Hazarika can be contacted at namratakh@tradeindia.com)