The Print Business Outlook seminar in Mumbai

The outlook for cartons, and the experience and advice for M&A

L to R - Kirit Modi, Saket Kanoria, Sushant Gaur, Ramesh Kejriwal and Mehul Desai. Photo PSA

On Saturday, 25 March 2023, an unusually rich in content and intelligently moderated interactive print industry seminar took place in Mumbai. While it featured excellent sessions on the paper industry, and commercial print diversification such as board games, design, and artificial intelligence applications, I will, in this article, only discuss two sessions.

The first is the opening session with its comprehensive presentation by Ramkumar Sunkara of SS Consultants based out of Pune and who is the co-chairman of the research and development center of the Federation of Corrugated Box Manufacturers of India. Sunkara’s comprehensive presentation of Indian economic growth and its prospects was exceptional in terms of its realism and its lack of boastful hubris. He presented growth numbers for the Indian economy that are solid and that present immense opportunity for the packaging and especially the corrugating industry.

Moreover, he warned that the industry doesn’t seem to be ready to make the Rs 15,000 crore (US$ 1.85 billion) investment needed in the next 10 years to take advantage of the corrugation opportunity. The growth opportunity requires great improvement and expansion in recycled liner (known as kraft) paper mills. He said, “Sorry to say, the Indian paper mills will not change and are not likely to improve any time soon.” He added that the implication of virgin liner imports is an untenable solution.

Mergers and acquisitions in paper-based packaging

The merger and acquisition session comprised Kirit Modi, the managing director of the leading Indian corrugated manufacturing company, which he substantially divested to JK Paper last year; the two leading monocarton manufacturers in the country – Saket Kanoria, the managing director of TCPL, a listed company on the stock exchange; and, Ramesh Kejriwal, the chairman of Parksons Packaging, which was substantially acquired by Warburg Pincus more than two years ago.

The fourth panelist was slightly younger, Sushant Gaur, the CEO of Adeera Packaging, which produces (8 crore) 80 million paper bags monthly and exports to seven countries currently, with plans to set up a US plant in 2024. The moderator of the session was Mehul Desai, the founder and chairman of Mail Order Solutions based in Mumbai.

The session was a remarkably frank discussion that addressed the desire and need for growth in order for businesses to sustainably survive. To a large extent, it is a matter of the scale that is required for competitive growth in order to generate the cash and the management resources for continuity and structured growth beyond the personal capabilities of entrepreneurs and promoters. The advice mentioned by several panelists was to embrace good governance (clean up your books).

Kirit Modi pointed out that 95% of mergers and acquisitions fail globally. He said, “When a promoter has exhausted all the options of organic growth then the path forward could be an IPO, private equity investment, or a strategic investor. However, many promoters fail to appreciate the importance of basic financial concepts such as enterprise value, working capital, asset value, and equity value.”

Saket Kanoria emphasized that mergers can be complex and could fail. He felt that there has to be some emotional or psychological fit as in many family partnerships even brothers cannot continue doing business together. “Mergers or acquisitions have to fit your mindset,” he said. Ramesh Kejriwal M&A’s said mergers and acquisitions have to be seen as a marriage of equals. In answer to a question of whether private equity is to some extent a via media because of scale, Kejriwal agreed that to some extent it is. “Eventually, you will have to have an IPO. You cannot continue to grow as a private company,” he said.

Adeera’s CEO Sushant Gaur, whose 10-year-old company has already acquired or merged with half a dozen companies, represents an altogether new generation who are supremely confident and well-equipped to see global opportunities. They seem to lack neither access to capital nor the management skills to replicate success in a number of plants profitably. He explained his quite amazing but convincing method of operation, “At first I speak with every employee of a company that we acquire or build and I explain what is expected of them. Once the metrics of performance are set, then it’s HR’s job.” Voila!

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The multi-channel B2B in print and digital 17-year-old platform matches the industry’s growth trajectory. The Indian, South Asian, Southeast Asian, and Middle East packaging industries are looking beyond the resilience of the past three years. They are resuming capacity expansion and diversification, with high technology and automation in new plants and projects.

As we present our 2024 publishing plan, India’s real GDP growth for the financial year ending 31 March 2024 will exceed 6%. The packaging industry growth will match the GDP growth in volume terms and surpass it by at least 3% in terms of nominal growth allowing for price inflation in energy, raw materials, consumables, and capital equipment.

The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are grown similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

For responsible and sustainable packaging, with its attendant regulations and compliances, there is significant headroom to grow in India and the region. Our coverage includes the entire packaging supply chain – from concept to shelf and to waste collection, sorting, and recycling.

We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers. This is a large and complex canvas – the only thing that can work is your agile thinking and innovation together with our continuous learning and persistence.

The coming year looks to be an up year in this region, and this is the right time to plan your participation and marketing communication – in our rich and highly targeted business platform with human resources on the ground. Share your thoughts and plans to inspire and mobilize our editorial and advertising teams!

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Editor of Indian Printer and Publisher since 1979 and Packaging South Asia since 2007. Trained as an offset printer and IBM 360 computer programmer. Active in the movement to implement Indian scripts for computer-aided typesetting. Worked as a consultant and trainer to the Indian print and newspaper industry. Visiting faculty of IDC at IIT Powai in the 1990s. Also founder of IPP Services, Training and Research and has worked as its principal industry researcher since 1999. Author of book: Miracle of Indian Democracy. Elected vice-president of the International Packaging Press Organization in May 2023.


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