Uflex closes Q2 of FY19-20 with 5% increase in EBITDA

Financial report and key product launches in Q2

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Uflex, one of India’s largest multinational flexible packaging companies and a global player in polymer sciences, declared its earnings for the quarter ended 30 September 2019, and its consolidated EBITDA (Earnings before interest, tax, depreciation, and amortization) for Q2 FY 19-20 stood at Rs. 278.8 crores, showing an increase of 5.4% YoY basis while its consolidated net profit fell marginally by 1.8% YoY (year on year) to Rs. 94 crores.

The total production volume during the quarter was 94218 metric tons as compared to 102442 metric tons during September 2018 quarter and total sales volume for the quarter was 93951 metric tons as compared to 101081 metric tons in September 2018 quarter. Lower production and sales volume are attributed to the closure of one BOPET line in Dubai as it is being shifted to Russia. The company reported consolidated net revenues of Rs. 1875.3 crores for the second quarter of fiscal 2019-20, registering a drop of 7.2% on YoY basis.

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Talking about the earnings for the company, Rajesh Bhatia, group chief financial officer at Uflex said, “Q2 FY 2019-20 was a steady quarter and despite the closure of one BOPET line in Dubai, which is being shifted to Russia and will be operational in Q4 FY 20, the EBITDA grew by 5.4% and EBITDA margins improved from 13.1% to 14.9% on YoY basis.”

Clarifying on the impact of single-use plastic phase-out by 2022, Bhatia said, “The current plan by the government of India on single-use plastic (SUP) in India will not affect Uflex’s business in any way since we do not manufacture carry bags and cutlery items which are included in SUPs. We manufacture multi-layer flexible packaging, which is all 100% recyclable and all the plants of Uflex already have recycling facilities. The company is providing leadership to the industry and the industry association is proposing to set up a pilot plant, which will showcase how to segregate municipal waste and recycle plastic waste and will surely address the negative perception around plastic, which is actually a boon material. Uflex’s USA plant is already certified by SCS Global for its minimum 90% post-consumer recycled (PCR) content PET film and Uflex will gradually set up PCR facilities at some of its plants worldwide.”

Ashok Chaturvedi, chairman and managing director, Uflex said, “Keeping in mind our commitment towards the planet and the changing needs of the consumer packaged goods industry towards sustainable packaging, equipping our clientele with a mix of recyclable and biodegradable products besides setting up of PCR facilities at our plants shall remain our big focus, this year. These efforts will definitely help in reducing plastic waste in the environment and create a truly circular plastics economy.”

Key product launches by Uflex

Two versions of multi-lane fill and seal machines – Stick Pack 200P and Stick Pack 200L – were launched by the engineering business for packaging of granule content including sugar, salt, coffee creamer and liquid content such as mayonnaise, honey, sauces, and tomato ketchup. Stick Pack 200P for packaging of powder and granules is equipped with a 5-track system leading to a higher production capacity of 175 to 225 packs per minute, whereas for Stick Pack 200L, the three tracks can easily produce anywhere between 75 to 90 packs per minute. The machines can pack a weight of 3 to 8 grams and can run various combinations of multi-layer packaging substrates like PET, PE, aluminum, and paper, depending on the packaging requirement. The new launch with additional benefits like easy operation of the machine, low maintenance cost and reduced energy consumption, has already found takers in India.

Solutions for textile and pharmaceutical industry

The Holography business of Uflex launched a series of innovations designed for its customers in the textile industry and pharmaceutical packaging. Uflex launched its variant of multicolor printed sequin for the textile industry. The indigenously built Multi-wash Stamping Foil by Uflex will also be exported and can withstand seven washes, without it being damaged, once the stamping is done on textile.

With the foray of transparent holographic PVC into Bangladesh’s pharmaceutical packaging market, Uflex has become the first and only company in the world to develop a product that transfers holographic image to 250 microreson PVC, not only enhancing the aesthetic appeal of pharma packs, but also providing an anti-counterfeit solution.