Patent expiry increases demandConstantia Parikh eyes IndiaConstantia Parikh, a joint venture between one of Europe’s largest packaging firm and Gujarat-based Parikh Packaging, which recently expanded its Moraiya plant near Ahmedabad, is eyeing acquisitions to expand its geographic footprint in the country and be closer to its clients, according to a report published in Business Standard.Pavan Parikh, director of Parikh PackagingPavan Parikh, director, Parikh Packaging, said that the company was open to looking for acquisitions in the near future with Constantia focusing on the Indian market, which shows high growth potential and is open to take over some local companies in the future as well as adding that the move would be mainly a strategic initiative to be closer to its clients. The company’s clientelle in India includes big names like Pepsico, Marico, Britannia, Dabur, Unilever, Parle among others, and according to Parikh they would be looking at targets in South and North India to be close to their clients.
As for the target size of the acquisition, he did not wish to share much details, maintaining that it is a cash-rich company and had no issues in funding the acquisition. The French investment group Wendel has acquired a majority stake in Constantia Flexibles in a US$ 2.8 billion deal recently. According to Parikh, the move was going to further bolster its prospects in India as the family led PE firm Wendel has big plans for emerging markets, especially India.
The company recently invested around Rs 50 crore to expand its Moraiya facility to 1,600 tonnes per month (tpm) from an earlier 1100 tpm. The firm has been clocking a steady growth rate of 25 to 26% over the past few years and has touched a turnover of Rs 235 crore last fiscal. Nearly 70% of its revenues come from the food segment and Parikh hoped that with the patent expiry in regulated markets, the demand for exports of generic drugs from India which houses many contract manufacturers would boost the pharmaceutical packaging segment as well.
It is targeting to clock a 25% growth in FY16 as well. Austria-based Constantia has 42 plants across the world and is the fourth-largest packaging firm globally, and the second-largest in Europe. Vienna-headquartered Constantia Flexibles Group had picked up a 60% stake in Ahmedabad’s Parikh Packaging for an undisclosed amount in 2013. The remaining stake is with the Parikh family which is in the business of non-ferrous metals and warehousing.