India’s industry and economic growth in the pandemic and beyond

Packaging as a vector and window to economic growth and modernity

India’s industry and economic growth in the pandemic and beyond

With Q1 results coming in for FMCG companies and our Q1 reviews that estimate the current year’s capacity creation for packaging offset presses and narrow web flexo label presses in this issue of August 2022, it is time for us to look at the economy’s and industry’s growth for the year. The capacity creation for all packaging categories continues apace (for flexible packaging it never slowed down even during the pandemic years). For paperboard packaging and the label industry, the coming year’s expansion speaks to pent-up capacity creation stemming from the ambiguities of the past two years.

Capital equipment from Europe especially costs more because of the increase in the price of raw materials, supply chain disruption, and energy costs. Delivery times are also abnormally extended and with the Rupee devaluation and US Fed raising its rates, it may be better to order now than later. Capacity creation is risk-taking in anticipation of demand growth and for our industry, in India, the growth is extremely likely – although when and how much – can sometimes slip marginally.

A leading label press manufacturer assures us that the economic growth is in double digits and we believe that he is not just speaking in terms of nominal growth (which includes inflation). But from his expectations of demand for Indian manufactured label presses in the current year.

TN Ninan, the respected and outspoken economic journalist writes in the Business Standard on 30 July 2022, that for “its macro-economic performance in 2020 and 2021, and the IMF’s forecasts for 2022 and 2023, Turkiye averages annual growth of 5.1% – which beats everybody else for those four years.

“According to the IMF’s data set for 30 highlighted countries, China is next best to Turkiye with average growth in 2020-2023 put at 4.55%, followed by another surprise: Egypt, with 4.3%. India comes fourth with 3.9% followed by (and you will have difficulty swallowing this) the crisis hit Pakistan, with 3.6%. With Bangladesh already an outstanding performer on the growth and development parameters, it would seem that the Islamic world has produced quite a few winners.”

Ninan writes further in his editorial, “As for India’s record, it did poorly in the first pandemic year (fiscal 2020-21), having already slowed sharply in the previous year. But it achieved amongst the fastest recoveries subsequently. And taking the IMF’s projections for the next two years, the economy is set to be the fastest-growing among the Institution’s select list of 30 countries. Average growth this year and the next year is put at 6.8%. The IMF’s optimism is shared by many multilateral and private forecasters. Some domestic analysts have gone so far as to project medium-term growth as high as 7-8%.”

IppStar’s professional industry analysis and projections bear out the IMF’s optimism for the current year. (For the afterword on cyclical downturn read the Ninan piece.) This is partly because we see the three verticals that we research, publishing, printing, and packaging as a continuum. Projects cannot easily be conceived or executed within any particular fiscal year. Machines on order can rarely be delivered in time to be commissioned by 31 March to enjoy the full depreciation benefits.

The building of new plants and installation of capacity creation takes a long time and thus for the packaging industry, especially the large film extrusion lines, these continued during the pandemic in India. We recently visited the new Avery Dennison plant in Greater Noida that bears out the long-term growth and investment in our industry. Our recent visit to the Echaar factory in Ambernath also built during the pandemic – reflected the same long-term vision and compulsion. Thus while the economy is a complex composite and difficult to understand, our industry is however a comprehensive vector, where commerce, social good, and growth seem to coincide (mostly). Maybe there is something to be learned from our industry for the economists too, for us it is certainly a window to the country’s ambitions of modernity.

The impact, resilience, and growth of responsible packaging in a wide region are daily chronicled by Packaging South Asia.

A multi-channel B2B publication and digital platform such as Packaging South Asia is always aware of the prospect of new beginnings and renewal. Its 16-year-old print monthly, based in New Delhi, India has demonstrated its commitment to progress and growth. The Indian and Asian packaging industries have shown resilience in the face of ongoing challenges over the past three years.

As we present our publishing plan for 2023, India’s real GDP growth for the financial year ending 31 March 2023 will reach 6.3%. Packaging industry growth has exceeded GDP growth even when allowing for inflation in the past three years.

The capacity for flexible film manufacturing in India increased by 33% over the past three years. With orders in place, we expect another 33% capacity addition from 2023 to 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels have grown similarly. The numbers are positive for most of the economies in the region – our platform increasingly reaches and influences these.

Even given the disruptions of supply chains, raw material prices, and the challenge of responsible and sustainable packaging, packaging in all its creative forms and purposes has significant headroom to grow in India and Asia. Our context and coverage engulf the entire packaging supply chain – from concept to shelf and further – to waste collection and recycling. We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers.

In an admittedly fragmented and textured terrain, this is the right time to plan your participation and marketing support communication – in our impactful and highly targeted business platform. Tell us what you need. Speak and write to our editorial and advertising teams! For advertisement , for editorial and for subscriptions

– Naresh Khanna

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Editor of Indian Printer and Publisher since 1979 and Packaging South Asia since 2007. Trained as an offset printer and IBM 360 computer programmer. Active in the movement to implement Indian scripts for computer-aided typesetting. Worked as a consultant and trainer to the Indian print and newspaper industry. Visiting faculty of IDC at IIT Powai in the 1990s. Also founder of IPP Services, Training and Research and has worked as its principal industry researcher since 1999. Author of book: Miracle of Indian Democracy.


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