What drives investment in the packaging industry?

Slow GDP growth to delay recovery to Q3


Indian GDP for the quarter ending 30 June 2017 (Q1) has dipped further to 5.7% from 6.1% in the January to March quarter. Industry leaders and CEOs of consumer product companies such as Marico and Dabur are optimistic that it won’t fall further. However, although hopeful of improved growth in the festival season this year, they are unsure of the level of recovery. Several industry leaders have said that it is unlikely that GDP will hit the 8% growth of the March 2016 quarter this year.


IppStar’s recent survey of the Indian flexible packaging industry is nevertheless showing better growth as compared to the past year despite the twin disruptions of demonetization and the new system of GST taxation. The leading Indian flexible packaging companies are showing average growth rates of 12% to 15% with a couple of the outliers’ annual growth above 20%.

Indian companies generally build new capacity when current capacity utilization is high, together with profitability and access to capital. On top of this, economic reforms are factored in as well as the quality of government and regulatory institutions. According to the IppStar survey, of the leading flexible packaging companies, more than a quarter are installing at least one new press in the current year with several installing and placing orders for multiple presses in addition to their orders for ancillary equipment. As far as the emotional factor or ‘animal spirits,’ almost all (approximately 90%) are optimistic about the flexible packaging industry.

Corrugated packaging

A less formal investigation of the Indian corrugation industry reveals a similar buoyancy amongst leading companies although the sector is quite fragmented and was hitherto considered a low technology business and dominated by Asian manufactured corrugating machines and flexo printers, slotting and folder gluer (FFG) equipment. In the past three years, there has been a strong level of investment in European manufactured corrugators and FFG machines. And, by this year’s end there will a dozen installations of the European Bobst and Emba FFG machines in India with Bobst dominating the market share.

industryAnother important indicator of the growth, and to some extent restructuring and consolidation of Indian corrugation capacity, is the influx of European corrugation machines. Hitherto considered too expensive for the fragmented corrugated box makers in the country who relied on Indian and other Asian machines, the bigger players have understood that a better corrugator together with the right know-how means a stronger box even using lower grammage recycled liners.

Transport or shipping boxes in India are still largely sold by weight, but with the use of new technology like their counterparts everywhere else, they too will be able to sell corrugated materials by the square meter. The demand for quality and efficiency will lead to bigger plants and the GST regime will extend their reach, leading to more consolidation. In the three years since Oji installed a BHS corrugator at their Manesar plant, the trend for better corrugation has taken hold. By the end of 2017, we can expect the footprint of new BHS corrugators in the country to extend to six machines.

Packaging South Asia — resilient, growing and impactful — daily, monthly — always responsive

The multi-channel B2B in print and digital 17-year-old platform matches the industry’s growth trajectory. The Indian, South Asian, Southeast Asian, and Middle East packaging industries are looking beyond the resilience of the past three years. They are resuming capacity expansion and diversification, with high technology and automation in new plants and projects.

As we present our 2024 publishing plan, India’s real GDP growth for the financial year ending 31 March 2024 will exceed 6%. The packaging industry growth will match the GDP growth in volume terms and surpass it by at least 3% in terms of nominal growth allowing for price inflation in energy, raw materials, consumables, and capital equipment.

The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are grown similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

For responsible and sustainable packaging, with its attendant regulations and compliances, there is significant headroom to grow in India and the region. Our coverage includes the entire packaging supply chain – from concept to shelf and to waste collection, sorting, and recycling.

We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers. This is a large and complex canvas – the only thing that can work is your agile thinking and innovation together with our continuous learning and persistence.

The coming year looks to be an up year in this region, and this is the right time to plan your participation and marketing communication – in our rich and highly targeted business platform with human resources on the ground. Share your thoughts and plans to inspire and mobilize our editorial and advertising teams!

For editorial info@ippgroup.in — for advertisement ads1@ippgroup.in and for subscriptions subscription@ippgroup.in

– Naresh Khanna (25 October 2023)

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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. Elected vice-president of the International Packaging Press Organization in May 2023.


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