Looking ahead, looking back: Packaging giants in India - The Noel D'Cunha Sunday Column

The Commerce and Industry report released in January 2014 estimates the annual turnover of Indian packaging industry will touch USD 32 billion by 2025 from the present USD 24.6 billion. And so, the annual growth rate of this sector is about 15% per annum.

The possibilities that exist in the packaging space are mouth-watering.

Noel D'Cunha looks at some of the biggest public listed packaging firms, to get an insight into an industry which sits on the cusp of a major boom.

Cosmo Films, reported a consolidated total income from operations of Rs 450.66-crore and a net profit of Rs 4.44-crore for the quarter ended September 2014.

Cosmo Films share has given returns of 122.59% over the last six months and 130.93% over the last 12 months.

The company, which was established in 1981, is one of the global leaders and manufacturers of bi-axially oriented polypropylene films (BOPP). Some of their major clients include Hindustan Unilever, Nestle India, ITC, Britannia and Godfrey Philips.

Cosmo, a manufacturer and supplier of packaging, label, specialty films and print lamination, has a customer base which is spread across more than 100 countries in six continents.

“A separate plant with exports focus is very much in line with company’s intent to expand its global footprint. We are considering South America as our next target market and will continue to expand our presence in Europe and USA. We are still on the path of consolidation,” - Pankaj Poddar, CEO, Cosmo Films

Essel Propack is one of the largest specialty packaging company in India. The company operates 25 state-of-the-art facilities in 13 countries. This year it has touched a 52 week high of Rs. 138.70 on 3 December 2014 and a 52 week low of Rs. 46.50 on 4 February 2014 so far.

The current market cap of the company stands at Rs 1959.05-crore. Essel Propack has received an approval for the scheme of amalgamation of EP Lamitubes, the wholly-owned subsidiary of Essel Propack with Essel Propack and their respective shareholders.

Essel Propack’s major clients include pharmaceutical company like Novartis, FMCG majors like Hindustan Unilever, Procter & Gamble, Colgate-Palmolive and cosmetic brands like L’Oreal and Revlon.

“Our diversification into the non-oral care category such as beauty and cosmetics, pharma and health and food have increased our market size three-fold and our immediate target is to get 50% of revenues from this sector,” - Ashok Goel, vice chairman and managing director, Essel Propack

Flexituff International reported a consolidated total income from operations of Rs 290.50-crore and a net profit of Rs 1.01-crore for the quarter ended September 2014. They Flexituff share prices touched a 52 week high of Rs 298.00 on 20 May 2014 and a 52 week low of Rs 202.10 on 25 November 2014.

Founded in 1993, Flexituff International is a flexible intermediate bulk container manufacturing company which offers products like form stable baffle bags, form fitted liner bags, glued liner bags. Flexituff manufactures a wide range of flexible intermediate bulk container (FIBC). Their major income is generated from global sales, with about 90% of their revenues coming from overseas sales.

Huhtamaki Paper Products has reported a consolidated total income from operations of Rs 314.35-crore and a net profit of Rs 13.22-crore for the quarter ended September 2014.

They have given 92.03% returns over the last six months and 189.39% over the last 12 months. Huhtamaki Paper Products offers a wide portfolio of packaging solutions that include flexible packaging, labelling technologies and specialised cartons.

Huhtamaki also acquired Positive Packaging at a debt-free purchase price of Rs 2,009-crores in a bid to strengthen its position in the fast-growing emerging markets.

Jukka Moisio, chief executive officer, Huhtamäki Oyj, said, "The acquisition further enhances our position in India and provides us with much-improved access to the fast growing markets of Africa and Middle East. Many of our global customers are investing heavily to grow in these markets, and now we are even better resourced to help them grow."

Today Huhtamaki Paper Products’ clients include Nestle, Cadbury, Britannia, GlaxoSmithKline, Coca-Cola, Perfetti, Dabur, Marico, P&G.

Jindal Poly Films reported a 10 times increase in its quarter one profits of fiscal year 2015. Their net profit was at Rs 39-crore compared to Rs 3.80-crore in the same quarter of the last fiscal year. The company’s net sales increased to Rs 666.70-crore against Rs 650.20-crore.

Jindal Poly Films’ share prices have fluctuated between their 52 week low of Rs 131.20 on 21 March 2014 and 52 week high of Rs 364.30, which was touched on 16 September 2014.

Jindal Poly Films' plant at Nasik is the world’s largest single location plant for the manufacturing of BOPET and BOPP films. In 2013, Jindal Poly Films struck a deal to acquire the global biaxially oriented polypropylene (BOPP) business of ExxonMobil Chemical for USD235 million.

Karur KCP Packkagings experienced a steep drop in standalone net profit for the quarter ended September 2014.  During the quarter, the profit of the company declined 33.33% to Rs 86-lakh from Rs 1.29-crore in the same quarter last year. Even as the net sales figures for the quarter were up by 14.24% as compared to the September 2013 figures. It caters to the requirement of cement companies like Indian Cements, Madras Cements, Chettinad Cements, Priya Cements and Rajashree Cements.

The Puducherry-based company is engaged in the business of manufacturing high-density Polyethylene and Poly Propylene bags and fabric. A major chunk of their business being generated by manufacturing sacks for some of the biggest cement manufacturers in the country.

Manjushree Technopack’s net profit declined 34.09% to Rs 1.72-crore on 25.78% growth in net sales to Rs 104.77-crore in the second quarter ended September 2014 over the corresponding figures from September 2013. Their 52-week low was Rs 140.00 on 10 February 2014 and it reached its 52 week high for Rs 491.00 on 27 October 2014. 

Bengaluru-based Manjushree Technopack manufactures specialty plastic packaging products for domestic / export markets. They boast of expertise in rigid packaging solutions including – PET containers, multilayer PP containers and PET performs.

“At present our rated capacity is 80,000 metric tonnes and last year we achieved close to 70% that is about 60,000 metric tonnes. This year we should be doing about 65,000 to 70,000 metric tonnes and as per the sales growth the capacity also will be utilised with the built up of our last plant year before. There is a pressure on the margins because of higher debt and that should come down in times to come,” - Vimal Kedia, managing director, Manjushree Technopack

Polyplex Corporation is among the world's largest manufacturers of thin PET/ Bottle Grade Pet Resin film. Their global presence is in 78 countries across Europe, Americas, Indian Sub-continent, Far East, Asia Pacific and the Middle East, catering to 1300+ customers.

Polyplex Corporation has reported 58% year-on-year growth in consolidated net profit at Rs 62.26-crore for the first quarter ended June 2014.

The company’s net profit was Rs 39.31-crore in the corresponding quarter of previous fiscal year. Net sales too grew 56% and stood at Rs 666-crore.

“We remain confident that the investment in new projects would not only generate adequate returns for the shareholders once the industry cycle improves but would also bring more stability in earnings as these projects would help diversify the product, country and customer risks. These, along with the existing assets will enable the company to grow profitably in the coming years and take advantage of a cyclical upturn,”  - Pranay Kothari, CEO, Polyplex Corporation

TCPL is one of the largest exporters of printed cartons from India. It regularly caters to consumers in countries like UK, Netherlands, UAE, Bangladesh etc. Exports constitute about 22% of TCPL's annual revenues. TCPL is currently converting about 3600 tonnes of paperboard every month, making TCPL one of India’s largest converters of paperboard. They are set to inaugurate a new plant in Guwahati come January, which is set to boost their output further. TCPL’s list of clients includes an impressive list of multi-national companies like Amul, Asian Paints, Bacardi, Bosch, Diageo, Coca-Cola, ITC, Jet Airways and Reliance.

TCPL Packaging has reported standalone total income of Rs 124.07-crore and a net profit of Rs 8.22-crore for the quarter ended September 2014. Other income for the quarter was Rs 1.46-crore.

TCPL share has given returns of 358.19% over the last six months and 540.82% over the last year.

TCPL has announced that it will launch its Guwahati plant on 30 January 2015. This new plant will help TCPL to extend its coverage across India and establish its presence in one of the fastest growing regions in the country. 

“At TCPL, we sweat our assets a lot. So, the amount of tonnage that we churn per machine is highest percentile of the industry. We calculate the absolute number on that tonnage and divide that with the CAPEX invested. This number is a relevant factor. At the end of the day, business is about how much money you put in and how much you get back,” - Saket Kanoria, managing director, TCPL

Tinplate Company of India is the largest indigenous producer of tin coated and tin free steel sheets in India. Tinplate has reported a standalone total income from operations of Rs 252.13-crore and a net profit of Rs 14.66-crore for the quarter ended September 2014. The net profit of Tinplate was down by 6.1-crore compared to the September 2013 numbers.

Tinplate’s share prices touched a 52-week high of Rs 93.10 on 25 July 2014 and fell to a 52-week low of Rs 43.00 on 4 February 2014.

“Over the last decade, the company has been on a growth path to add capacity and it continues to work on pursuing operational excellence and market differentiation including better service levels to its customers. The growth in the tinplate industry is highly correlated with the growth in the processed food and beverage industry. With a market share of over 45%, the company maintained its leadership position in the steadily growing Indian market in the financial year 2013-14. The company also registered a new high in the exports segment backed by a favourable exchange rate. Going forward, the company will work towards consolidating its market position through differentiated value-added product mix and enhancing its service levels to the customers,” - Koushik Chatterjee, chairman, Tinplate Company of India