Essel is hopeful of 12-15% growth from India

The company, which divested its flexible packaging business a year ago, in July 2015, saw a revenue degrowth for the last fiscal year. Plus, there was a raw material pass through. This was evident in certain units which were under the excise framework and now covered by the excise adjustment and Customer Owned Company Operated (COCO) model.

Commenting on the results, Ashok Goel, vice-chairman and managing director, Essel Propack, said, “Yet another year of consistent and improved performance with profitable growth, creating value for stakeholders. The company is on track with its mission 20:20:20. Net profit continues to grow healthy with five year CAGR of 33%. Underlying revenue growth continues outside of India; India is now showing signs of growth, along with operational efficiencies and focus on non-oral care, the business is poised to sustain profitable growth.”

Last year, Essel saw a growth of 42% in non-oral care. This year too, the numbers are 42%. The reason is: China has grown in non-oral care at about 25%. However, India has de-grown in non-oral care due to the macro economic situation.

Three months ago, Goel, in a statement to PrintWeek India, said, “Europe and Americas are on track. Margins have been helped by stable RM prices and operational efficiencies. We believe, continued growth in Europe and Latin America and demand revival in India will drive our topline growth to 15% CAGR in the coming quarters.”

[ Read Ashok Goel's full comment here ]

Essel Propack, part of the USD 2.4 billion Essel Group, with FY15 turnover of over USD 380 million, is the largest specialty packaging global company, manufacturing laminated plastic tubes catering to the FMCG and pharma space. Employing over 2,700 people representing 25 different nationalities, Essel Propack functions through 21 state-of-the-art facilities and in 11 countries, selling more than six billion tubes.

Essel Propack has set up new manufacturing capability in China with an aim to achieve 5.1% market share in China’s non-oral care tube market in fiscal year 2015-16 from current 3.2%.

In the last quarter of 2015, the company had inaugurated its fifth plant in China, with the commissioning of EPSL (Essel Propack Suzhou Ltd) in Suzhou (East China) for the non-oral care category. The plant is strategically located in the hub of all multinational and domestic cosmetic brands.

At that time, Goel had said, “Cosmetic products have better revenues, asset turn and value addition as compared to the other products in our portfolio. Oral care segment comprises 85% of Essel’s total revenue in China as per the last fiscal. The new plant which is our fifth site in China creates a new opportunity for Essel to mitigate any risk with current oral care customer group and could become a strong impetus for EP China’s top line growth in 2015 and beyond.”

The primary focus of the new plant would be beauty and cosmetic products like  facial cleanser, hand cream, BB cream, shampoo and hair conditioner.

This is the first phase of investment in EPSL, which has an annual tube supply capacity of 160 million tubes, which will subsequently be more than doubled to reach 380 million annual tube supply capacity.