Max to invest Rs 600 mn for two metalliser lines

This Rs 600-million investment will enable the BOPP film manufacturer to meet the increased demand for specialty packaging especially for the packaged food segment. MSFL hopes to provide improved shelf life by offering 100% reliable laminate options. These lines add a thin layer of metal, mainly aluminium to the specialty films being produced by MSFL to enhance the barrier properties and for superior appearance of the packaging.

With the two metalliser lines, MSFL will be able to improve the proportion of specialty films it markets. This is in line with its focus since the last few years to co-create packaging films innovations in consultation with leading FMCG companies.

Thus far, MSFL has invested Rs 300 million for installing the first metalliser line. This is expected to be commercialised by March 2021. The second metalliser line, with similar investment of Rs 300 million, will be operational in the third quarter of the next financial year. These metalliser lines will not increase the overall capacity because the base film remains the same, but it will enhance MSFL’s ability to improve the value-added specialty component in its product category.

Launched in 1988, MSFL is one of the innovation leaders in the specialty packaging films business. It has a strategic partnership with Japanese printing company Toppan Printing. Established in 1900, Tokyo-based Toppan has a market value of USD 6.8 billion and operates in sectors including information and communication, electronics and packaging.

Today, MSFL is one of the major suppliers of specialty packaging, labels, coating and thermal lamination films for the Indian and overseas markets. Its volumes for FY20 stood at approximately 6,30,000 metric tonnes. MSF remains committed to its focus of creating value added films and specialty products through research and innovation. Since the commissioning of its line 5 in 2018, MSF has significantly increased its production of recyclable films.

Speaking about the investment, Sahil Vachani, MD and CEO, MaxVIL, said, "The installation of the new metalliser lines is a part of our stated strategy of being the quality and innovation leaders in the industry. We have been focusing on increasing the specialty films component in our production-mix, which results in better pricing power and improves margins.”

MSFL manufactures a vast range of BOPP films of differentiated quality across a wide field of applications: graphic art, labelling, flexible packaging for processed foods, confectionery, non-food fast moving consumer goods (FMCG) and industrial goods. It has developed packaging films with anti-bacterial properties, which has been accepted well in the markets. Its total capacity is currently around 81 kilo-tonnes per annum at a facility located at Rail Majra, Ropar, Punjab.

The company is focusing to increase sales of value-added specialty films as it is more profitable. Value-added specialty films volume contribution stood at 42% of total volumes in FY20 as compared to 34% in FY19 and it continues to increase.

According to an official note shared by MSFL, the BOPP films industry was severely impacted in FY19 because of significant capacity expansion, leading to depressed prices and profitability. However, from FY20 onwards, the demand has increased while supply remained constant, resulting in increased realisations and strong profitability for MSFL. No major capacity addition is planned in the BOPP industry in the near future. According to an official at MSFL, "this augurs well for sustainable margins for the MSFL in the times to come".

Shares of MaxVIL was last trading in BSE at Rs 44.7 as compared to the previous close of Rs 45.95. The stock hit an intraday high of Rs 45.85 and intraday low of Rs 44.45. The net turnover during the day was Rs 3,66,895.