JPFL have become one of the largest global players in this business. In fact
Starting from scratch with manufacture of biaxially oriented polyester (BOPET) films in 1996 and diversifying into biaxially oriented polypropylene (BOPP) films in 2003, JPFL have become one of the largest global players in this business. In fact, their Nasik plant is now the world’s largest single-location manufacturing facility for packaging films with a total capacity to turn out 90,000 MT of BOPET films (3 thin film lines + 1 thick film line) and 90,000 MT of BOPP films (one 5-layer line + two 3-layer lines) per year. These lines include some of the world’s largest lines for both BOPET and BOPP. They are today the 5th largest BOPET manufacturer in the world. They also have downstream facilities to produce 40,000MT of metallised films, including 2 lines under installation, and 4,500 MT of acrylic, PVDC and LTS coated films per year. Almost 80 per cent of their metallising capacity is equipped with state-of-the-art plasma treatment. Two more 45,000 MT/year BOPP lines have been ordered, the first of which will be operational by June 2008 and the other by December 2008. One more 25,000 MT/year BOPET line and a new coating line will also come on stream shortly.
The company actually started off in 1974 manufacturing galvanised ERW pipes and initially diversified into manufacture of polyester yarn in 1985. As mentioned above, the manufacture of BOPET films commenced in 1996 after the pipes division was hived off to another group company and the company’s name changed to Jindal Polyester Limited. The BOPET plant was originally set up as an Export Oriented Unit (EOU) but was subsequently converted under the EPCG scheme. In 2003, they acquired Rexor SA of France – a leading European manufacturer of metallised, coated and micro-slit films for applications like tear tapes, hot stamping foils, security threads and other high value technical applications for Euro 8.5million. In 2004, the company rechristened itself Jindal Poly Films Limited to reflect its focus on the flexible packaging films business.
During the quarter ending 30/09/2007, JPFL recorded net sales of INR 3.25 billion and profit before tax of INR 0.45 billion representing a growth of 35 per cent on net sales and 184 per cent on pre-tax profit as compared to the corresponding quarter of 2006. Although net sales showed a 12.3 percent increase over those in the preceding quarter, pre-tax profit fell by about 10 per cent due to higher raw material costs. The person spearheading this growth in JPFL is their Director – Marketing, Mr. Samir Banerjee, a stalwart of the flexible packaging industry in India, who has had previous stints with India Foils, Cosmo Films and Flex Industries.
In this interview, SamirBanerjee (SB) talks to PSA editor S. Chidambar (SC) about his experiences and views on the packaging industry.
SC: What made JPFL decide to get into the Packaging industry and, within the packaging industry, how did you decide to focus on oriented films?
SB: The company had originally wanted to go into aluminium packaging and had, in fact, imported secondhand
rolling mills for this purpose. However, Mr. Jindal felt that it is plastics packaging that would grow at the expense
of metals and he decided to go with plastic films. (The aluminium rolling mills were converted to roll steel). The packaging industry was growing at a very healthy rate in India, especially the high value flexible packaging segment that was mainly based on polyester film laminates, and it was projected to continue growing at a consistently attractive rate. As you know, we started off manufacturing polyester yarn and, so, polyester film was a kind of logical extension to our business. The subsequent diversification into BOPP films was actually based on my own background in that business and the potential growth that I foresaw there.
SC: You follow a policy of investing only in state-of-the-art highest output production lines. Is this a conscious decision and has this policy given you any competitive advantage?
SB: We actually started with secondhand lines bought from the erstwhile Hoechst and ICI. However, we realised
very early on that this was a sub-optimum move and that we needed to achieve lowest-cost status to do well in this business and this was possible only through the technology route using top-of-the-line equipment. This policy has certainly paid us great dividends. Not only are our costs low, something like 97 to 98 per cent of our output is ‘A’ grade film and our capacity utilisation is over 110 per cent. Our latest BOPP lines (on order) are, in fact, “premium”
lines sourced from Dornier.
SC: Your primary focus has been on exports to the sophisticated markets like Western Europe. How difficult was it to establish yourself there?
SB: As we started off as an EOU, we just had to succeed in the export market. In fact, it was actually a blessing in disguise. From a slowish start in 1996, it was only in 1999 that we really tasted success, and, by 2001, we were able to establish ourselves as a major supplier.