PSG Tubing Machines at SkyPack Plant
Of the companies we visited Rexor and Skypack are core converters while Paharpur 3P is a subsidiary of Paharpur Cooling Towers. All companies have co-extrusion lines, blown film units and solvent based, solvent less and extrusion lamination followed by presses and pouching units. These are their points of parity. Their points of differentiation are – Rexor specialises in holographic films and metallised films, Skypack specialises in pharmaceutical packaging and Paharpur 3P specialises in liquid packaging.
Products and clients
Of the converters we met all were capable of providing products for their clients on a national level although the larger clients have dedicated factories for each region and hence they tend to source packaging from local converters closer to them. Thus the competition between converters is on a regional level. Now looking at Rexor we see that it specialises in metallised and holographic films. Rexor is focused on food products and a lot of its work is for biscuit packaging. Customers include Nestle, Britannia, Frito Lays and Haldirams among others. Some of its more innovative products include coated and laminated films exported to Eastern European countries like Slovakia. These are thermal reflector films for increasing thermal efficiency widely used in Europe.
Skypack started out with a long-term relationship with HMD the makers of Dispovan. Now they are major suppliers to pharmaceutical companies in India. Skypack is looking at expanding to personal care products by leveraging their knowledge and expertise in hygiene requirements with high quality and performance laminates. One of their more innovative products is a pain relief cream packed in a high-grade film sachet.
Paharpur 3P is the youngest company amongst the three with Rexor starting operations in 1964, Skypack in 1973 and Paharpur 3P in 1994. It specialises in liquid packaging for edible oils and lubricants. The company replaces a lot of rigid packaging – folding cartons which can be replaced by stand-up pouches and pouches with spouts which can replace PET and glass bottles. Packaging liquids is seen as more complicated — especially hot fill liquids, packaging for edible oils and lubricants. Paharpur clients’ include oil refineries for lubricants, and edible oils manufacturers apart from the FMCG companies.
New expansion plans
All these converters have expansion plans to increase capacities and introduce new technology. Moreover Skypack is currently commissioning a new injection moulding plant while also in the planning stages for a new press. Skypack recently added lamitubes to their product portfolio with Taiyo and PSG equipment. Rexor has finalised a new press purchase but was reluctant to disclose any information before the letter of credit is opened. Another expansion plan is slightly delayed due to market uncertainty. Paharpur also intends to acquire new presses and is looking at a 6-month time frame to complete the acquisition process.
Rexor participated in a couple of exhibitions five years ago as an exhibitor. Now they are more likely to be visitors at exhibitions as they feel that these are meant mostly for machinery manufacturers and end-users but not for converters. They will not be participating in PackPlus 09 as an exhibitor but as visitors. Skypack will be exhibiting in PackPlus 09 and also participated in the promotional road shows in Haridwar and Baddi. They are looking forward to participating as an exhibitor at PACK EXPO from 5 to 7 October 2009 in Las Vegas. Paharpur 3P is also planning to participate as an exhibitor at PackPlus 09.
Flexible packaging solution providers in India are focused on domestic demand with a small percentage of their production for exports. This unlike China has been to their great benefit in the current global economic situation. As Naveen Talwar, Marketing Director of Skypack told us, when he goes to domestic clients they talk about expanding product lines and growth in the market. When talking to European markets it’s all about cost cutting and matching the lowest price being offered. At Paharpur 3P we spoke to Dharmesh Zavery, General Manager of Exports and Sagato Mukerji, General Manager of India sales and marketing, they said that although Paharpur 3P had climbed up the value chain in India, climbing up the value chain in the developed world is a slower process. Rexor exports to Africa and Eastern Europe. Paharpur 3P is exporting to countries within the SAARC region, Middle East and Africa.
We visited some of the larger flexible converters in the National Capital Region who have focused in niche areas to differentiate themselves. As Rexor is in solid foods, Paharpur 3P is in liquids, and Skypack is in pharmaceutical and personal care products. All three still cater to the FMCG companies which source some of their most popular products from different suppliers in the same region spreading the risk and not having to depend on a sole source of supply.
Based on our recent interactions, which we will perhaps amend after our visits to other packaging solution providers in North India, we saw that flexible packaging providers are looking to expand capacity and to bring in new technology. We also learned that there is healthy competition, and the bigger players try not to step on each other’s toes. Exports for most companies are in two segments — to destinations where the value chain is not as developed as Africa; and to Europe where the value chain is harder to climb.