Gautam Agarwal, managing director of AFC

Mumbai-based paper packaging firm Ansa Folding Carton (AFC), which recently acquired a strategic stake in another Mumbai-based company, Rich Printers Private Limited, for Rs 117 crore, is open to more acquisitions if the opportunity arises, Gautam Agarwal, managing director of AFC, told Packaging South Asia.

“We have been actively pursuing deals for several months, and we will continue to do so. Inorganic growth is crucial for organizational expansion, and it aligns with our vision for the future. At the same time, we will also remain focused on the organic way of growth,” Agarwal explained.

In early January, AFC announced it had acquired a strategic stake in Rich Printers at an enterprising value of Rs 117 crore. The combined entity will operate five paper conversion manufacturing plants in India, making it one of the largest pharmaceutical folding carton producers in the country.

The acquisition has positioned AFC as a major player in the pharmaceutical folding carton segment. The synergy between AFC and Rich Printers is not merely financial but rooted in shared values and a common commitment to excellence.

Agarwal emphasized the significance of the deal, citing Rich’s remarkable assets, cutting-edge technology, and state-of-the-art manufacturing plants.

“Rich was a great fit for AFC. They bring not just assets and technology but a culture of integrity. With 90% of our business in the pharma packaging segment, the alignment with Rich was impeccable. It was a strategic move we carefully evaluated and embraced,” Agarwal stated.

The combined entity will now have its footprint in Maharashtra, Gujarat, Himachal Pradesh, West Bengal, and Sikkim.

Capacity addition

The newly formed entity will possess an impressive paper conversion capacity of 40,000 tons by the end of FY2025 and is committed to doubling its size in the years to come.

“Our capital expenditure plans are already underway. The combined entity will have a conversion capacity of 40,000 tons by the end of the next fiscal year – FY2025. That would be a 40-45% increase in capacity from what it is now,” Agarwal said.

AFC now has a footprint in the western, northern, and eastern parts of India. Agarwal said expanding into the southern part would be the next move. “The southern part of India is where we need to have our footprint and I think we will have it,” he said.

Export is something AFC is bullish about. The company derives about 15-20% of its business from the overseas market and hopes to increase this share in the coming years.

Consolidation in packaging space will continue

Reflecting on the broader packaging industry, Agarwal foresees a trend of consolidation continuing. He believes the industry, particularly the paper-based packaging segment, will witness smaller companies merging into larger entities.

“The paper-based packaging space is still fragmented with a large number of companies below the Rs 300-400-crore turnover mark. I believe these smaller companies will continue to fold into larger firms to create even bigger companies. So, we have to mature as an industry. The good thing is we have witnessed good momentum on this front in the last 24 to 36 months and if this momentum continues, consolidation will also continue. Capital will find good players, money would not be a problem,” Agarwal said.

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