The packaging and label industry in India in FY 14-15 and FY 15-16Growth in volumes, price pressure and significant capacity build-upAn informal survey of the Indian packaging and label industry indicates that the financial year from 1 April 2014 to 31 March 2015 was one of significant growth in volumes, but because of considerable price competition and in some cases hyper-competition, the growth in value was minimal. Throughout the industry, entry-barriers have risen – much higher levels of investments are needed just to start a new packaging or label plant. In every segment new technology purchases are needed and happily, these are being made particularly by the leading printers and converters. “It is no longer economical to work with outdated technology,” says Rakesh Shah of W&H which has pioneered high quality wide web CI flexo in India. “There is a crying need for upgrading technology in every area,” he adds.
The label industry with its large footprint of narrow web flexo presses has also added significant capacity this year. The label industry has grown in volume in the high single digits but the value growth has been relatively flatFlexibles
Flexible packaging grew well in FY 14-15 with the addition of more than 20 high-speed gravure presses and about eight or nine wide-web CI flexo presses including both European and Asian manufacturers. This capacity building is supported by more than two dozen electronic engravers for gravure cylinders and more than a dozen digital imagers for flexographic plates for all types of applications.
The label industry with its large footprint of narrow web flexo presses has also added significant capacity this year. The label industry has grown in volume in the high single digits but the value growth has been relatively flat. The label segment has also now become more investment-oriented and more discriminating when it comes to technology. The increased technology requirements are reflected by the number of mid to high-end configuration full servo presses that have come in this year. The larger label converters continue to grow their locations both inside and outside the country – for instance April 2015 will see the inauguration of the Bengaluru-based Wintek (Signode India) plant in Rudrapur in North India. Nevertheless, as some industry insiders put it, “This is a time for a reality check, there is no point in supplying labels at un-economical and suicidal prices.”