Monthly Archives: May 2012

Asia Pacific market propels PET demand in flexible packaging sector

The chemical polyethylene terephthalate (PET) which is an integral part of flexible packaging had witnessed growth of around 7% CAGR last decade mainly because of its diverse application in the fast moving consumer goods (FMCG) and food sector, according to chemicals intelligence provider GBI Research. Global PET demand stood at 6,472,350 tons in 2000, increasing at a compound annual growth rate (CAGR) of 6.9% to reach 12,621,553 tons in 2010. This upward trend is expected to continue in the near future, with global PET demand tipped to reach 23,452,281 tons by 2020, following a forecast CAGR of 6.4%. GBI Research analysis  indicate that fast growing economies like the BRIC nations (Brazil, Russia, India and China) are emerging to be strong contenders in the global PET market.

A significant portion of demand for PET came from the Asia-Pacific region, which accounted for 40.6% of global PET demand during 2010. This is expected to increase to 47.8% by 2020, as China is rapidly emerging as a global petrochemical products manufacturing hub. Production in China enjoys the advantage of relatively low operating costs and, as a result, there have been huge capacity PET capacity additions in the country, with the country accounting for almost half of Asia-Pacific’s import volumes during 2010. In addition, India’s large population is causing consumption of packaged goods to rise, creating increased demand for PET capacity additions.

Flexible packaging will continue to grow in importance as major retail chains demand greater product protection and longer shelf-life for various products. Carbonated soft drinks (CSD) accounted for an impressive share of 31.5% in the demand for PET during 2010, while the food and beer sectors accounted for respective shares of 22.4% and 11.4%. According to GBI Research’s analysis, PET packaging is expected to increase its share in the packaging sector towards 2020 due to better gas barriers and ultraviolet (UV) light protection, which extends the shelf-life of PET-packaged products, while new hot-filling processes are creating new opportunities for PET packaging for pasta and sauces.

Contributing its share to the Indian packaging market is Uflex Ltd. which is India’s largest flexible packaging company. It is all set to launch a PET film plant in Kentucky, USA and will invest $80-85 mn in the plant. The plant would produce 30,000 MTPA of PET film and the company is currently in talks with local government for land acquisition. The plant is expected to be fully operational by December 2012 and will contribute $20-22 mn per annum of EBITDA.

During the financial year ended March 31, 2012, Uflex Ltd completed the 2nd phase of expansion of its facility in Mexico aggregating a total capacity of 60000 MT of PET film and commissioned an AL-OX coater, CPP plant of 12000 MTs and PET film of 30,000 MTs at Egypt.

UFLEX Ltd Q4 FY11-12 Consolidated Net Revenue at Rs. 1195 crore and Net Profit of Rs. 51 Crore

New Delhi:- Uflex Ltd, the Bombay Stock Exchange (UFLEX: 500148) and NSE listed, India’s largest flexible packaging company has registered the Consolidated net revenue for the March quarter of 2012 of Rs. 1195 crore as against Rs. 986 crore for the same period last year, up 21%. The higher revenue growth has been achieved due to availability of new capacities and higher utilization thereof. However, the Consolidated net profit has not been in line with top line growth due to continued downward pressure on selling price and rising input cost of PET Film and overall rise of other operating and interest cost during the quarter. It has been lower at Rs. 51 crore as against Rs. 183 crore for the same period last year.

For the full financial year ended March 31, 2012, UFlex recorded  a strong growth of 30% in consolidated net revenues at Rs. 4579 crore as against Rs. 3540 crore for the last year.  However, net profit has been lower at Rs. 256 crore against Rs. 697 crore in the last year due to the reasons explained above.

 According to Mr. Ashok Chaturvedi, Chairman and M.D. of UFLEX Ltd, “Exploring new markets and investment destinations has been an ongoing process for us, as has been innovation in product development that has ensured long term relationships with customers globally. This progressive outlook reflects well in our growth in revenues and goes on to stamp our commitment towards our other stakeholders of incremental value generation on investments.

UFLEX’s agenda of global expansion and consolidation of its position as a truly Indian MNC (Multinational Corporation) is reinforced with its strategy of capacity expansion and adding manufacturing lines for new product categories across facilities in Dubai, Mexico, Egypt, India, Poland & USA – not only to increase proximity to the markets, but also to bring broad portfolio of value added products to its clients at competitive price points.

During the financial year ended March 31, 2012,  Uflex Ltd completed the 2nd phase of expansion of its facility in Mexico aggregating a total capacity of 60000 MT of PET film and commissioned an AL-OX coater, CPP plant  of 12000 MTs and PET film of 30,000 MTs at Egypt.

Earlier, Uflex had initiated the setting up of a new plant for manufacturing of 30,000 MTs of polyester film at Poland. The project is being implemented and is expected to be commissioned by June 2012.

The Company also announced plans to set up polyester film plant in Kentucky, US. The 1st phase will be commissioned by December 2012 having annual capacity of 30000 MTs.

Uflex is the only integrated unit of its kind in the world with flexible packaging at its core. It has vast capacities for production of Polyester chips, Biaxially Oriented Polyethylene Teraphthalate (BOPET) and Biaxially Oriented Polypropylene (BOPP) films, Printing & Coating Inks, facilities for Holography, Metalization & PVDC coating, making Gravure Printing Cylinders & Flexo Printing plates, Gravure Printing, Lamination and Pouch formation.

The company’s partial client list includes Unilever, Pepsi, Wrigley, Procter & Gamble, Colgate, Palmolive, Nestle, Gillette, Ranbaxy, Perfetti, Joyco, Monsanto, ITC, Godrej Pillsbury, Tata Tea, Hindustan Petroleum, Indian Oil, Britannia, Dabur, Haldiram, Wockhardt, HUL, Parle Biscuit, and Birla 3M, among others.