Flex won the Best Exporter Of The Year award from the Plastics Export Promotion Council for BOPET and BOPP Films in October 2006. It also won the prestigious DuPont Award for Excellence In Packaging Engineering in the Food and Beverage Category at Philadelphia in the US in August 2006. S Chidambar interviews Senior President of Flex Industries Pradeep Tyle.
The growth of Flex Industries Ltd. — the flagship of the Flex Group – has been nothing short of phenomenal. Within 18 years of inception, it has evolved into being not only India’s largest player in the burgeoning flexible packaging business but also a global player to reckon with. The process has seen the concept and execution of a dedicated and focused game-plan that has made it the country’s only really vertically integrated packaging company whose value-chain extends from raw material and hardware inputs like PET chips, oriented films, inks, adhesives and conversion machinery to end-user solutions like packaging materials, end-user equipment/systems, holograms and even “commodity” zip-lock pouches.
During 2005-06, Flex Industries notched up sales of INR12.08 billion (Euro 207 million), profit before tax of INR 439 million (Euro 7.5 million) and a net profit of INR 331 million (Euro 5.7 million) while maintaining the double-digit annual rate of growth they have so regularly clocked every year. Their subsidiary companies Flex Engineering, FCL Technologies & Products, Flex America, Flex Europe and Flex Middle East have also all done well. Their film plant at Dubai has been a great success and has achieved over 100% utilisation, prompting them to go in for further expansion and more production plants overseas.
Flex has won the “Best Exporter Of The Year” award from the Plastics Export Promotion Council for BOPET and BOPP Films in October, 2006. It also won the prestigious 19th DuPont Award for Excellence In Packaging Engineering in the Food & Beverage Category at Philadelphia, USA in August, 2006. It had won this award in the same category in 2005 as well. Flex won the award in 2006 for engineering excellence in developing a special pouch for ANKUR salt constructed from 5 different input laminate webs.
While the group has been the brain-child of Chairman Mr. Ashok Chaturvedi, one of the people spearheading this spectacular track record is Mr. Pradeep Tyle, the Senior President of Flex Industries. A part of the top management team right from the concept stage, Mr. Tyle is a very well-known industry professional. He recently presented a paper at the prestigious BOPP 2006 Conference organised by AMI at Frankfurt on the 23 May 2006, where his presentation was adjudged the best at the meet.
In this interview, Mr. Tyle (PT) talks to our Editor S. Chidambar (SC) about his experiences with Flex and the Packaging industry.
SC: You have been one of the people spearheading Flex’s thrust right from the beginning — I remember you were on the original Project Team in 1987 operating out of your M-Block GK-I office in New Delhi. What made you choose the Packaging business?
PT: To tell you the truth, I was planning to go to the US for further studies in chemical engineering in 1983. At that point of time, I was working for a cement company, J.K. Cement. However, my family, especially my mother, was not too keen on my going to the US, and, meanwhile, I got the opportunity to work for Rollatainers, which was my gateway into the Packaging Industry. I had no regrets, since that was an upcoming industry.
SC: Your big growth came when you created a revolutionary new concept — the “affordable” Price Point Pack (sachets) for pan masala/ gutka/ tobacco, which you later extended to shampoo. How did you actually get started on this concept?
PT: Our Chairman always used to work on the concept of purchasing power of the consumers and we realised that, unless and until the product reaches the mass consumers, the sales of any product of mass consumption cannot grow. This was also based on the fact that most of the Indian population consists of middle class and lower middle class, who cannot afford to buy a large pack in one go. Despite their hesitation, many years down the line, companies like Procter and Gamble had to follow this strategy for detergent Ariel and shampoo.
SC: You were the first convertor to go in for both forward integration (holograms, machines, systems, commodity ziplock pouches) and backward integration (oriented films, PET chips, metallised films, inks, adhesives) — in fact, you are still the only fully integrated Indian company in the flexible packaging business. Was this part of your original plan or was it as a result of the volumes you achieved?
PT: Actually, at that point of time, it was not easy to get the right machines or raw materials and also because of the complexity in imports by way of licence and high duty, it was difficult to import, but the company had a big vision of flexible packaging and, therefore, we decided that we have to be self-sufficient in terms of raw materials as well as equipment. This determination made us a totally vertically integrated group and, as you can see, we did not do it half-heartedly; we established world class capacities in each of the segments and, therefore, it was a planned action and not otherwise.
SC: You were also one of the first Indian packaging companies to set up facilities overseas. Your Dubai operation has been an overwhelming success. Would you like to tell us something about your experience in this venture?
PT: The successes of our Dubai facilities have been very satisfying. It was tough initially to set up a unit outside India as, at every stage, you have to face the local law of the land. However, we are very happy with the way things have turned out in this respect. We are now closer to our customers, thereby extending them the facility of supplying good quality material at a short notice. This has made our customers a happy lot!
SC: Has the Dubai venture given you a competitive advantage?
PT: In terms of service, yes, but in terms of manufacturing, it is more expensive than what is available in India. But it is very satisfying to know that when it comes to service today, we are globally recognized. This has further increased the level of confidence our customers have in Flex.
SC: Do you plan to extend your overseas manufacturing activities to other countries?
PT: Yes. Today, Flex is exporting to over 81 countries and, in pursuit of our philosophy of being near to the customer where they want us, we are looking into the possibility of opening more units outside India. We are planning these facilities to be close to the emerging markets.
SC: What do you see as the potential for packaging in the Indian domestic market?
PT: In one word, “GREAT” and, if one word is not enough, then “SUPER GREAT”!
SC: What will be the Indian packaging indusry’s major challenges to fully capitalise on this potential? Can we also achieve dominance in international markets?
PT: To be honest, India can spearhead the international markets. The only thing is our lack of respect for consistent quality and commitments in terms of service and delivery. As long as these are there, nothing can hold us back. The local manufacturers have to realise the importance of supplying consistent quality products and a good service network. There is no country in the world where the flexible packaging industry is not growing. With growth rates of 3% to 25%, depending on country to country and the impending rise in consumerism, there is no reason why this industry should not achieve dominance over other industries.
SC: To what would you attribute Flex’s remarkable success in this business?
PT: I think vision and acting at the right time. Also, the experience and expertise in all spheres of packaging has given Flex the insights of all the latest developments and innovations that are taking place around the world and this certainly helps to be in sync with our customer requirements and quality concerns.
SC: Personally, what has been your most satisfying achievement in Flex’s formidable road to success?
PT: For me today, Flex’s name becoming a respectable household brand in Flexible Packaging in 81 countries is the most satisfying achievement.
SC: Thank you very much for talking to us. Here’s wishing you and Flex lots more success in the future.