Jindal Poly Films acquires 100% of SMI Coated Products

Indian label industry update – investment, resilience & consolidation

Jindal PolyFilms turnover
Jindal Poly Films turnover in the past five financial years to 2020-21 in Rs Crore Graphic Moneycontrol.com

While the pandemic has not gone away, the world is opening up and overseas visitors keen to interact with Indian publishers, printers, and label and packaging converters are arriving. India is the first place they visit when released from their confinement – it could be our low Covid-19 numbers or the high growth projections and investment pipeline, especially in the flexible packaging industry. 

The interest is not merely confined to equipment salespersons. Investors are also coming. Japan’s Toppan bought out the Max Films plant in Punjab a couple of months ago, and Canada-based Brookfield has invested Rs 2,000 crore (approximately US$ 266 million) for a 25% stake in India’s largest film producer Jindal Poly Films. Private equity interest means that structured investment is looking for stakes in the Indian flexible packaging, carton, and label industry.

Numerous label converters have been sized up by several potential acquirers and investors but they haven’t bitten for a variety of reasons. Nevertheless, structured investment capital will likely keep looking at our industry – and this will likely lead to both money coming and consolidation to create more professionally managed and viable companies. 

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The entry cost is relatively low for label production, tempting new entrants to jump into the industry every week – especially with the local manufacture of narrow web flexo and digital label presses. However, while raw material prices have risen, the brand owners are not easy to convince to pay more. The label converters who have been able to get price increases are the mid-segment technically sound converters with several presses and robust infrastructure. In many cases, they are specialists in some product segments. Their track records and reliability have built bridges in the pandemic years to brand owners no longer keen to visit plants to monitor or interfere with production.

Thus the supply chains from raw materials to design, approval, and finished product have improved during the pandemic. An overseas visitor that we met recently had an insight into the resilience of Indian label converters. “It’s great to see – all the label printers seem to be busy. They are active and many of them seem to have a second business that has made them more resilient in these two years of the pandemic.”

SMI acquired by Jindal Poly Films

On the morning of 29 April 2022, as we finalize the pages for the May issue of Packaging South Asia comes the news that the aforementioned Jindal Poly Films has acquired Mumbai-headquartered SMI Coated Products which is the largest homegrown Indian labelstock manufacturer. The company, a sterling advocate and supporter of the rapidly growing Indian label industry has in the past decade become an organized exporter of pressure sensitive labelstock with an office and distribution center in Dubai for the Middle East and African markets. From reports received thus far, SMI’s turnover for the financial year 2020-21 was Rs 273 crore (approximately US$ 37 million) and the acquisition cost to Jindal Polyfilms is Rs 195 crore (approximately US$ 26 million). Jindal Poly Films’ turnover for the 2020-21 financial year was Rs. 4082 crore (approximately US$ 544 million). This is considerably lower than its highest turnover on record in the 2016-17 financial year in which it achieved Rs. 7,014 crore (approximately US$ 935 at current exchange rates).

While it has not taken long for Jindal Poly Films to put the capital it recently raised from Brookfield to work, our view is that the deal is very positive for helping SMI grow in an industry where strong local suppliers for labelstocks are needed. It is a logical horizontal diversification for Jindal as well, since it is a global supplier of filmic face-stocks as are other Indian film manufacturers such as Garware, Cosmos, and Uflex. The Mehta family is pleased by the Jindal acquisition and to have helped the Indian label industry grow and for the benefits it has been able to bring to the country’s brand owners and the economy. Ajay Mehta, SMI’s managing director says, “We have always wanted the industry and country to prosper – that has been our only aim.”

Note – This is the editorial article from the May 2022 issue of Packaging South Asia to be printed and distributed on 6 May 2022.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Packaging South Asia’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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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.


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