Patanjali Ayurved’s inhouse monocarton unit takes root

Interview – Anil Choubey, DGM, Patanjali

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In 2017, The Economic Times called Patanjali Ayurved Indian FMCG’s new ‘Bahubali.’ The Baba Ramdev-led FMCG company, which leverages its Bharatness, clocked Rs. 10,561 crores in revenue in FY16-17. This made it the fastest growing and second largest player in the FMCG sector after Hindustan Unilever at the time. However, Patanjali’s consumer business witnessed a decline in revenue of over 10% in FY17-18 at Rs. 8,148 crores. The company attributes the decline to the new Goods and Services Tax and its own weaknesses in distribution. Profits of the combined Patanjali entities declined by over 50% to Rs. 528.9 crores in FY17-18.

Although some of the projected rapid growth has not yet materialized, Patanjali has kept adding consumer goods and distribution across the country. It has made significant investments in bringing its packaging in-house, beginning with monocartons at its Haridwar plant. Bringing packaging in-house can give it some leverage across the supply chain. Better control of costs, design and innovation, as well as compliances that are becoming a part of both FMCG product safety and packaging sustainability could be some of the beneficial outcomes of this bold and serious initiative.

Anil Choubey is the deputy general manager at Patanjali Ayurved headquartered in Haridwar
Anil Choubey is the deputy general manager at Patanjali Ayurved headquartered in Haridwar

Packaging suppliers to Patanjali include major Indian converters such as Essel Propack, Manjushree Technopack, Dynaflex, ITC, TCPL, Huhtamaki, Uflex and Amcor. Patanjali’s growing product portfolio has helped generate good business for these converters. In the main these continue, while the company’s own monocarton unit is producing as much as 80% of its requirements in less than the year that it has been running.

Patanjali brings monocartons packaging in-house

Patanjali’s monocarton plant in Haridwar is part of a large investment program, unusual for a beginning in a new area. Prepress includes a Heidelberg 106 thermal CtP, the pressroom has two Heidelberg presses – a CD 102 7-color plus coater with UV interdeck and end-of-line press and the second, a CD102 6-color plus coater press. The converting section has three Bobst Novacut 106 ER with blanking die-cutters; a Bobst SP104 hot foil stamping machine; a Heiber-Schroder window patching and liner machine; and a Polar guillotine.
“In fact, we still outsource a lot of our packaging to converters in and around our manufacturing units. Our toothpaste and powder products Patanjali Dant Kanti are widely consumed and we had to bring their monocarton production in-house. Plans for growing our monocarton production are there and we’re trying to execute the rest of the plan as soon as possible,” says Anil Choubey, deputy general manager at Patanjali Ayurved.

Patanjali makes inroads into flexible packaging and labels

Recently, the company’s in-house packaging has extended to labels. “Though we have tried to bring labels in-house, it is early days and a lot of our labels are still supplied by converters in and around Haridwar and Delhi. Flexible packaging, which is completely outsourced, may also come into in-house production, in future,” adds Choubey. Currently, the company’s flexible packaging is supplied by major converters such as Huhtamaki PPL, Amcor, Uflex, and IDMC amongst other converters.

Patanjali to run gravure and outsource CI flexo

Most of Patanjali’s flexible packaging is currently printed on gravure presses. However, having recently seen the possibilities of CI flexo and its growth in the country, it plans to outsource some of its gravure work to CI flexo converters. “We are quite eager to shift additional rotogravure work to CI flexo while our milk pouches, which comprise 20% or 100 metric tons a month, are already printed on flexo. We have to consider the high quality CI press capacities that are available to us in the country. However, I would also like to make it clear that Patanjali’s investments in flexible packaging printing are and may remain in rotogravure only even in the future,” Choubey shares.

Patanjali has compared the capex needed for gravure and CI flexo. They reached a conclusion that CI flexo would require twice as much capex in comparison to gravure and thus, it may look to run gravure in its in-house packaging plants.

Patanjali on plastics compliances

Comments on the indiscriminate use of plastics in its packaging have been coming from Patanjali’s users and customers. Dedicated to environmental conservation and responsibility, the company is taking steps that ensure complete elimination of un-recyclable plastics from its products in the market. Also, according to the extended user responsibility rules (EUR) of the government, Patanjali will have to give a complete record to the government about its plastics consumption. Keeping this in mind, the company has begun working towards using only reusable plastic materials in its products.

While in-house waste that is properly handled is re-used in materials that are safe, Patanjali also sells waste to third-party recyclers. Overall, the company uses 500 metric tons of flexible packaging each month. However, it says that it is only able to recycle 35% to 40% of its in-house waste currently. At the same time, it’s looking at the processes and ways of recycling its plastic waste into usable laminates.

Compliance with new FSSAI packaging norms

The new recently issued FSSAI packaging norms are already in practice in the West, mainly in the US and Europe. Patanjali is working actively towards compliance with the new packaging norms. Nevertheless, Choubey feels that it will take time to successfully implement these norms in India. “To bring about a change at a short notice is a tad difficult. It is extremely important to educate the public about the ill-effects of wrong consumption and littering. Himachal, for instance, took close to 11 years to make itself plastic free and the state followed a particular pattern to ensure this. It started by educating students about the consumption of plastic.”

Choubey is keen that a wider understanding on the correct use and disposal of plastic be engendered. “The public must know the extent to which plastics can be used. People need to be taught about disposing the plastic waste properly. These steps are necessary to be undertaken before the helpful and useful plastics become a curse for the society,” he says.

In-house and outsourcing packaging: A delicate balance

As eager as the company is to bring all its packaging processes in-house, it is still calculating the benefits and potential profitability of this exercise. Since most of its production units are scattered throughout the country, the company is carefully evaluating various implications bringing all its packaging materials production and processes in-house.
At the same time, it will be difficult for Patanjali to eliminate outsourcing packaging materials in a short span of time as it supplies a range of products in the market. The company is also working to bring in equipment to supply to the customers in and around its production units. In 2018, Patanjali’s packaging unit entered various new packaging segments with the launch of new products and as a new monocarton packaging plant was profitable. While the consumer product segment remained stagnant in the past year, in FY 2019-20 the company plans to launch several new products. Meanwhile, the new packaging venture is set to see another bright year ahead, according to Choubey.

 

Slightly edited on 15 May 2019.

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6 COMMENTS

  1. WHERE AS EVERYONE WILL APPRECIATE ENTRY OF PATANJALI TRUST IN THE IN-HOUSE PACKAGING, MORE CONCENTRATION SHOULD BE GIVEN IN THE SAVINGS AND PILFER PROOFS PACKAGING FOR DOMESTIC MARKETS. FOR THE INTERNATIONAL MARKETS TOTALLY SEPARATE PACKAGING BE ADOPTED TO PREVENT SOME UNETHICAL DISTRIBUTION NETWORK AND ESTABLISH ABSOLUTE RELIABLE BRAND IMAGE GLOBALLY.

  2. The world over Offset printing for packaging uses are already on the way out for reasons of an unwieldy manufacturing process and floor space utilization. Much better alternatives exist in today’s varied choice of Narrow webs with inline operations as desired at higher speeds. Mono carton gluing and window-patching of course may need special attention still.
    However, must appreciate the policy decision to have a backward integration into packaging production areas. A giant step forward. Do appreciate the effort.

  3. Why does Patanjali need to go for packaging in-house, when there are giants in the field of packaging giving the best of quality putting years of experience in Research and Development and new developments.
    And also they can get the best competitive prices for their huge requirement of packaging materials.

  4. Today’s packaging is visible on the shelf which are very attractive in a combination of structural and aesthetic innovation being made by various prominent packaging converters across the globe…. We find a steady enhancement in the packaging excellence possibly due to continuous investment on technology and R&D activity at the regional and global level to optimize packaging cost and at the same time to offer a gamut of product basket to the manufacturers and consumers with a product warranty . When Patanjali will have their own packaging manufacturing set up, it is likely to be difficult for them to get the advantage of available wide range of technological innovation in various packaging concepts and product range as a whole for their own brand research activity and finding a desirable packaging solutions path.

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