Monthly Archives: September 2012

Global surge in the food and drink packaging market

Food and beverage packaging industry is gaining pace rapidly with the constant and increasing demand in the food and drink segments. A recent analysis by Visiongain suggested that the global food and packaging market will attain a value of $329 billion in the year 2012.  The analysis also discusses various trends such as environmental awareness, increasingly busy lifestyle and gentrifying societies as driving factors for the food and packaging industry.

The report further mentions that food packaging markets are expected to grow exponentially in the emerging markets of the developing countries while the same are expected to maintain the current growth in the developed markets. The report further mentions that the expected growth is due to the ever increasing demand in the food and drinks packaging industry. Drink packaging is expected to be benefited from the increasing per capita income levels in the developing economies but may lag in the developed regions if consumers’ confidences are further shaken by the discouraging improvement in the euro-area crisis.

India, in the recent years has seen a steep rise in the demand of food and beverages packaging industry.  According to a recent analysis conducted by German Engineering Federation (VDMA)(http://www.worldpressonline.com/PressRelease/drink-technology-india-dti-and-international-packtech-india-serve-a-dynamic-beverage-process-technology-and-packaging-market-35304.html) the industry in India is likely to reach a turnover of about15 billion euros by the year 2015.  The country is soon to become the second most important market for suppliers in beverage and food packaging industry after China as per the analysis. At present there is a huge demand for flexible packaging in the country both domestically and internationally. Owing to the growing demands clubbed with the favorable economic policies for Foreign Direct Investments (FDI), India has opened up increasingly to the international market.  Amongst the prominent and emerging companies in this sector, the role of Uflex Pvt.  Ltd is worth mentioning.  With its innovative and eco friendly approaches, Uflex has been significantly contributing towards the packaging sector with its value added flexible packaging material thereby providing world class flexible packaging solutions to its customers in both the domestic and international market at competitive prices capturing a huge portion of the surging demand. With robust expansion plans Uflex has recently made significant investments inEgypt,Poland&Kentucky,USA and has further plans of international investments soon.

UFLEX Ltd Eyes Next Milestone of $2 billion Revenue Mark by 2015

  • Earmarks investment of $ 250 million in setting up new manufacturing facilities and capacity expansion both inIndia& overseas in next 2 years.
  • Total investments inEgyptpegged at $135 million; commissioned an AL-OX coater, CPP, BOPP and PET film plant in Egypt
  • Investing $90 $80 million to set up a polyester films plant inKentucky, US; production to start by December 2012
  • Production at manufacturing facility in Wrzesnia, Polandcommenced in June July 2012
  • 2nd phase of expansion of facility inMexicocompleted

 

Egypt, August 31, 2012:Uflex Ltd, the Bombay Stock Exchange (UFLEX: 500148) and NSE listed, India’s largest flexible packaging company, today tabled their next phase of growth, which will involve investments in setting up new manufacturing facilities and capacity expansion in existing locations. Adding new capacities and favourable demand trends globally will add traction to UFLEX’s growth to the next milestone of touching the $2 billion revenue mark by FY 2015.

In the financial year ended March 31, 2012, Uflex had become the first Indian company in the flexible packaging sector to achieve the milestone of $1 billion revenue. UFLEX’s agenda of global expansion and consolidation of its position as a truly Indian MNC (Multinational Corporation) with facilities in Dubai, Mexico, Egypt, India, Poland and USA reinforces its strategy of increasing proximity to potential markets, apart from bringing broad portfolio of value added products to its clients at competitive price points.

According to Mr. Ashok Chaturvedi, Chairman and M.D. of UFLEX Ltd, “Our global investments in excess of $500 million in greenfield and brownfield expansion is symbolic of our dual commitment – to investors, creating incremental value on their investments, on one hand; and solutions based innovation driven product offerings that adds value to clients’ go-to-market strategy. Our investors and clients are our guide to future growth strategies, which is crucial for us to Identify and harness the opportunities at the right time that is key to our strong foothold in the flexible packaging market globally.”

Expansion Plans

Uflex Ltd is currently investing Rs 380  400-crore ($90 $80 million) to set up a polyester films plant in Kentucky, in the US with an annual capacity of 30,000 metric tonnes. This facility will start production by December 2012. This will be the firstGreenfield investment to be made inKentucky by an Indian company, as also Uflex’s first manufacturing facility in theUSA.

In the quarter ended June 30, 2012, Uflex completed the setting up of its new manufacturing facility for production of 30,000 MTs of polyester film in Wrzesnia, in Poland. The facility involved investments of about $80 million (around Rs 360 crore). The project has successfully commenced commercial production since June July 2012.

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 in Egypt.

The company’s total investments in Egypt are pegged at $135 million while the investments in Mexico amounted to $109 million. The facility inEgypt has trade pacts with GCC nations, Southern Europe & Africa, Middle East, West Asia and CIS to access larger markets, while the facility inMexico has trade pacts and is part of NAFTA, thus has access to a large market likeNorth America.

Financials

Uflex has grown from strength to strength registering a 22% increase in its consolidated net revenue for the quarter ended June 30, 2012 at Rs. 1376 crore as against Rs. 1125  crore for the same period last year.

The firm’s consolidated net profit for the June quarter of 2012 stood at Rs. 56 crore as against Rs. 96 crore for the same quarter last year. However, sequentially, the revenue and net profit for Qtr. June, 2012 viz – viz Qtr. March, 2012 has grown by 16% and 5% respectively. The higher revenue growth is attributed to new capacity expansion globally and increased uptake of innovative flexible packaging solutions offered by the company across sectors.

Uflex closed the financial year ended March 31, 2012 on a strong note registering a growth of 30% in consolidated net revenues at Rs. 4543 crore as against Rs. 3540 crore for the previous year, on the back of favourable demand trends globally.

Competitive Advantage

Uflex’s strong manufacturing base in India, Mexico, Dubai, andEgypt andPoland caters to global markets spanningUSA,Canada,South America,UK, Europe,Russia, CIS countries,South Africa and other African countries, theMiddle East and the South Asian Countries.

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.