India’s leading manufacturer of laminated and coextruded tubes, Essel Propack, expects oral care segment to remain its primary engine of growth in coming years, managing director and chief executive officer , Sudhanshu Vats, said in Essel’s 2019-2020 annual report,
“Oral care has always been our core, and will remain a key engine of growth, profits and reputation. There is still a lot of room to grow market share, particularly in the Americas, Europe and some other key markets; and we will pursue these aggressively to extend our global dominance.We will demonstrate thought leadership, urging our biggest clients to let us lead the development of new packaging solutions on their behalf.”
Personal care and pharmaceuticals are two categories that is exciting for the company. Vats believes that both segments offer immense value, as well as attractive margins. “We are confidently penetrating these markets with sharp innovations and disruptive business models, not to mention new relationships. We’re also actively earning new ways to succeed in these categories, and building new capabilities along the way,” he stated.
Last year, private equity firm Blackstone entered into a definitive agreement with Ashok Goel Trust to purchase a majority stake in Essel Propack. The company, founded in 1982, is a global leader in laminated tubes. Through its 20 state of the art facilities across 10 countries, employing over 3,158 people, EPL manufactures 7 billion tubes annually. Essel’s clientele includes marquee global brands in the oral care, beauty, cosmetics and pharmaceutical industries.
Fitness and agility
Essel is of the view that in order to grow, staying fit is crucial. In recent past, the company has queried costs at every level. Vats said that the company was positively surprised by the savings identified.
“These efforts will continue; to help us raise margins, but also to help us ward off threats from local insurgents across markets,” he said.
The company is also focusing on agility with accelerated automation playing a big role in significantly reducing lead times, a key pain point for the industry. “We will keep inventing newer ways to deliver high quality, zero defect products, on time and in full, creating new benchmarks for the industry to follow,” Vats argued.
Essel foresees a rapid disaggregation of demand, driven by several forces such as new insurgent brands, multiple channels and more fickle consumers to name a few. The company plans to invest in new capabilities.
While Essel’s focus is on laminated tubes, Vats said, it will also approach adjacent product opportunities strategically, especially where it can extend the company’s core competencies and deepen relationships with customers. “Inorganic growth can supplement organic efforts here,” Vats said.
Digital and eCommerce
Growing digitalization is changing the way companies are doing business. eCommerce is having an impact in the way goods and services are sold. According to Vats, Essel believes digitalization is transforming how Essel is doing business.
“eCommerce will increasingly be a key driver of growth. As the world adapts to ‘low-touch’ realities, we will create new ways to engage our clients and larger ecosystems. Also, as consumers interact more and more virtually with brands, we will find newer opportunities to manage digital assets on behalf of our customers,” Vats said.
Sustainability – challenge and opportunity
Sustainability is a buzz word in the packaging industry in both India and globally. Essel believes it is simultaneously the biggest challenge and opportunity facing the industry. The company says that in the future, sustainable packaging will dictate its very right to operate. It has been working on developing recyclable tubes.
In 2019-20, Essel got the breakthrough. Its Platina 250 and Green GML 300 laminated tubes were recognised by the Association of Plastic Recyclers (APR), USA, as meeting or exceeding the strict APR HDPE critical guidance criteria, as being 100% recyclable. The company expects to see a global take-off in demand for Platina.
The company has also expanded its ecofootprint through a series of initiatives at the printing stage; from digital artwork collaboration and digital printing, to the use of water wash plates and low-footprint inks and print processes. It also collaborated with top customers to create recyclable tubes, stiffer tubes with reduced polymer content, HDPE caps as well as new laminate materials. The company expects to see a very strong demand for these in the years to come.
“We are determined to pioneer sustainable packaging working actively with our customers, creating new possibilities with them. The future of our business is green, and we will be at the forefront of change in our industry,” Vats says.