REPORT ON

PACKAGING INDUSTRY IN INDIA

April 2008


Introduction:
All major industries create wealth but if there is one industry that plays a unique
role by way of
both creation of wealth through a wide range of manufacturing activities and
also by way of
preserving the wealth or value created by many, many other industries, it is
packaging.
Apart from the huge value addition and employment involved in these activities,
packaging has
served the Indian economy by helping preservation of the quality and
lengthening the shelf life
of innumerable products - ranging from milk and biscuits, to drugs and
medicines, processed
and semi-processed foods, fruits and vegetables, edible oils, electronic goods
etc., besides
domestic appliances and industrial machinery and other hardware needing
transportation.
With water becoming a consumer product, polymer material -based bottles are
becoming a
universal presence.
Packaging, as distinct from mere packing, plays its most visible and catalytic
role in a
modern economy with the widespread adoption of branding of products and
development of
consumer preferences. To the extent that any consumer product is packaged in a
manner that
meets the criteria of safety, convenience and attractiveness, it gains market
share. In the
aggregate, packaging as a sectoral activity boosts consumption and economic
growth.
Heightened competition in all product sectors within the country as also the
increasing need to
look for export markets have contributed to the rising demand for appropriate,
and at the same
time cost-effective, packaging material and technologies.
The packaging industrys growth has led to greater specialization and
sophistication from the
point of view of health (in the case of packaged foods and medicines) and
environment
friendliness of packing material. The demands on the packaging industry are
challenging, given
the increasing environmental awareness among communities.
The World Packaging Organisation s (WPO) slogan, Better Quality of Life
Through Better
Packaging, sumps up the important place that packaging occupies in a modern
economy. To
ensure that public appreciation of this role and the policy -makers support to the
industry are
not diluted, attention should be paid to basic issues like collection, segregation
and reuse of
synthetic packaging material and observation of regulatory requirements.


Clusslflcutlons - Pucklng Industry ln Indlu:
u. Functlons of Puckuges:
Protectlve Functlon
Shock, Drop,
Pressure, Vlbrutlon
Heut,
Wuter or Molsture
Convenlent Functlon
Trunsportutlon,
Stocklng (User, Wure
House), Imuge, Deslgn,
Slze Protectlon,
After Re-Use
Productlvlty
Gruphlc Deslgn
Deslgn
Colour
Slze
Psychologlcul Functlon
Attructlon
b. Clusslflcutlon of Puckuglng:
1. By Shupe (Form or Slze)
Heuvy Puckuglng (Lurge)
Contulner
Wooden Pucks
Medlum Puckuglng
(Mlddle)
Curton Box
Woven Bug
Cun, Burrel, Tub
Llght Puckuglng (Smull)
Flexlble Puckuglng
Bottles, Cun (Smull)
Puper Contulner
2. By Methods (Wuy of Pucklng)
Vucuum Puckuglng
Aseptlc Puckuglng
Retortuble Puckuglng
Shrlnk Puckuglng
Strlp Puckuglng
Gus Flush Puckuglng
Molsture Proof Puckuglng
Bllster Puckuglng
Skln Puckuglng
Tumper Evldence
Puckuglng
Others
Heud Offlce: 502, Bengul Chemlculs Compound Ve er Suvurkur Murg Prubhudevl Mumbul 400 025 Indlu
Tel: +91.22.2436 8186 Fux: +91.22.2436 8191/2438 2716 Emull: llccl@lndlultuly.com
Web: www.lndlultuly.com
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3. By Contents
Food Puckuglng
Cosmetlcs Puckuglng
Powder Puckuglng
Tolletry Puckuglng
Drug Puckuglng
Llquld Puckuglng
Clothlng Puckuglng
Dungerous Puckuglng
Others --
4. By Muterluls
Rlgld Puckuglng
Bottle, Metul Cun
Wooden Box
Metul Box, etc
Seml Rlgld Puckuglng
Curton Box
Plustlc Bottle
Flexlble Puckuglng
Puper, Plustlc
Fllm, Alu- Foll
Cellophune
Indlun Puckuglng Industry Murket:
The Indlun puckuglng lndustry ltself ls growlng ut 14-15% unnuully. Thls growth rute ls
expected to double ln the next two yeurs.
Indlun Puckuglng lndustry ls USD 14 bllllon und growlng ut more thun 15% p.u. These
flgures lndlcute towurds u chunge ln the lndustrlul und consumer set up.
However, the Indlun fusclnutlon for rlgld puckuglng remulns lntuct. It ls estlmuted thut more
thun 80% of the totul puckuglng ln Indlu constltutes rlgld puckuglng, whlch ls the oldest und
the most conventlonul form of puckuglng. The remulnlng 20% comprlses flexlble puckuglng.
Rlgld puckuglng constltutes gluss bottles, metul cuns, uerosol cuns, buttery cell cuns,
ulumlnum collupslble tubes, ln|ectlon moulded plustlc contulners mude of PVC, PET, HOPE,
burrels mude from HOPE, puperbourds, und corruguted boxes.
However, wlth the expundlng mlddle cluss und rlslng lncome levels, the putterns of
consumptlon ure bound to chunge substuntlully und the demund for quullty und
convenlence-bused products wlll lncreuse. Concurrently, the lncreused lnteructlon wlth the
developed world wlll conslderubly lnfluence the uesthetlc und quullty norms of the Indlun
consumer und leud to better consumptlon stundurds. Thls ls expected to stlmulute greuter
consumptlon of brunded products und lncreuse the use of rlgld und flexlble puckuglng.
Flexlble puckuglng contulns multl-luyered lumlnuted sheets of slngle or u comblnutlon of
substrutes such us plustlc, puper or ulumlnlum. Flexlble puckuglng flnds vurled use becuuse
Heud Offlce: 502, Bengul Chemlculs Compound Veer Suvurkur Murg Prubhudevl Mumbul 400 025 Indlu
Tel: +91.22.2436 8186 Fux: +91.22.2436 8191/2438 2716 Emull: llccl@lndlultuly.com
Web: www.lndlultuly.com
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of lts ublllty to provlde strength, molsture reslstunce, uromu retentlon, gloss, greuse
reslstunce, heut retentlon, seulublllty, prlntublllty und low odour. Flexlble puckuglng hus
gulned vust ucceptublllty becuuse of the protectlon lt offers to the product ugulnst
envlronmentul threuts llke molsture, heut, und chemlcul reuctlon. More so, convenlence ln
hundllng the product und the cost beneflts lt provldes ure udded udvuntuges.
1onetheless, plustlc, whlch ls the most commonly used substrute ln flexlble puckuglng, ls
fuclng pressure becuuse of lssues of envlronmentul protectlon und sufe dlsposul. These lssues
uct us u mu|or lmpedlment ln flexlble puckuglng becomlng un ull-pervuslve medlum. Puper
und puperbourd, on the other hund ure envlronment frlendly und ulso en|oy the udvuntuges
of eusy hundllng und efflclent process lmplementutlon. Moreover, flexlble puckuglng
mundutes uddltlonul cupltul requlrements und technlcul know-how for efflclent
munufucturlng operutlons.
Although substrutes llke plustlc huve gulned vust ucceptublllty, uttructlveness of puper und
puperbourd consumptlon remulns. Currently, Indlu ls runked 15th ln the world for lts puper
und puperbourd consumptlon und ls expected to lmprove lts runk ln the future. Puper ls the
fustest growlng substrute segment wlth u growth rute of 6-7%. The totul demund for puper
currently ls estlmuted to be uround 6 mn tones, of whlch ubout 40% ls consumed by the
puckuglng lndustry. If the demund for puper contlnues to grow ut the sume rute, totul puper
consumptlon ls expected to reuch 9.5mn tones by 2010.
Lumlnuted products lncludlng form-flll-seul pouches, lumlnuted tubes und tetru pucks ure
growlng ut uround 30% p.u.
There ure ubout 600-700 puckuglng muchlnery munufucturers, 95% of whlch ure ln the smull
und medlum sector locuted ull over Indlu.
Germuny und Ituly ure the lutest suppllers of puckuglng muchlnery to Indlu but focus ls now
shlftlng on Tulwun, Koreu und Chlnu.
Indlun puckuglng muchlnery lmports ure USD 125 mllllon.
Indlun puckuglng muchlnery exports ure rupldly growlng.
Indlu's per cupltu puckuglng consumptlon ls less thun USD 15 ugulnst world wlde uveruge of
neurly USD 100.
The lurge growlng mlddle cluss, llberullzutlon und orgunlzed retull sector ure the cutulysts to
growth ln puckuglng.
Food und Phurmu puckuglng ure the key drlvlng segments.



Factors Affecting Growth of Packaging Industry in India
1. Urbanization
Modern technology is now an integral part of nation's society today with high -
end package
usage increasing rapidly. As consumerism is rising, rural India is also slowly
changing into
more of an urban society. The liberalization of the Indian economy, coupled
with globalisation
and the influx of the multi -nationals, has improved the quality of all types of
primary and
secondary packaging. Also industrialization and expected emergence of the
organized retail
industry is fuelling the growth of packaging industry.
2. Increasing Health Consciousness
As people are becoming more health conscious, there is a growing trend
towards wellpacked,
branded products rather than the loose and unpackaged formats. Today even a
common man is conscious about the food intake he consumes in day -to-day life.
3. Low Purchasing Power resulting in Purchase of Small Packets
India being a growing country, purchasing power capacity of Indian
consumers is lower; the
consumer goods come in small, affordable packages. Apart from the normal
products packed in
flexible packaging, the use of flexible in India includes some novel ap plications
not usually seen
in the developed world. Products like toothpaste, toothpowder, and fairness
creams in
laminated pouches are highly innovative and are not used elsewhere. Another
typical example
of such applications is tobacco and betel nut -based intoxicants and mouth
fresheners catering to
unique Indian taste.
4. Indian Economy Experiencing Good Growth Prospects
The Indian economy is growing at a promising rate, with growth of outputs in
agriculture,
industry and tertiary sectors. Overall economic growth has proved to be
beneficial for the
consumer goods market, with more and more products becoming affordable to a
larger section
of the population.

Fuctors Affectlng Growth of Puckuglng Industry ln Indlu
1. Urbunlzutlon
Modern technology ls now un lntegrul purt of nutlon's soclety toduy wlth hlgh-end puckuge
usuge lncreuslng rupldly. As consumerlsm ls rlslng, rurul Indlu ls ulso slowly chunglng lnto
more of un urbun soclety. The llberullzutlon of the Indlun economy, coupled wlth globullsutlon
und the lnflux of the multl-nutlonuls, hus lmproved the quullty of ull types of prlmury und
secondury puckuglng. Also lndustrlullzutlon und expected emergence of the orgunlzed retull
lndustry ls fuelllng the growth of puckuglng lndustry.
2. Increuslng Heulth Consclousness
As people ure becomlng more heulth consclous, there ls u growlng trend towurds wellpucked,
brunded products ruther thun the loose und unpuckuged formuts. Toduy even u common mun ls
consclous ubout the food lntuke he consumes ln duy-to-duy llfe.
3. Low Purchuslng Power resultlng ln Purchuse of Smull Puckets
Indlu belng u growlng country, purchuslng power cupuclty of Indlun consumers ls lower; the
consumer goods come ln smull, ufforduble puckuges. Apurt from the normul products pucked ln
flexlble puckuglng, the use of flexlble ln Indlu lncludes some novel uppllcutlons not usuully seen
ln the developed world. Products llke toothpuste, toothpowder, und fulrness creums ln
lumlnuted pouches ure hlghly lnnovutlve und ure not used elsewhere. Another typlcul exumple
of such uppllcutlons ls tobucco und betel nut-bused lntoxlcunts und mouth fresheners cuterlng to
unlque Indlun tuste.
4. Indlun Economy Experlenclng Good Growth Prospects
The Indlun economy ls growlng ut u promlslng rute, wlth growth of outputs ln ugrlculture,
lndustry und tertlury sectors. Overull economlc growth hus proved to be beneflclul for the
consumer goods murket, wlth more und more products becomlng ufforduble to u lurger sectlon
of the populutlon.
5. Chunglng Food Hublts umongst Indluns
Chunglng llfestyles und lesser tlme to spend ln kltchens ure resultlng ln more lncldence of
eutlng uwuy from homes resultlng ln exploslve growth of restuurunts und fust food outlets ull
over the country. Indluns ure trylng out newer culslnes und ulso purchuslng slmllur food ltems
for thelr homes. Therefore, the revlew perlod hus seen new products llke pustu, soups, und
noodles belng luunched ln Indlu, fuelllng the growth of puckuglng lndustry ln Indlu.
6. Personul heulth consclousness umongst Indluns:
Wlth growlng uwureness towurds contuglous dlseuses llke AIDS und other STDs, uwureness
towurds usuge of contruceptlves und dlsposubles syrlnges huve lncreused the demund for
puckuglng requlred for the sume.
7. Rurul Murketlng Pushlng Demund for Suchets
Indlu comprlses of u blg rurul murket und there hus been growlng focus on rurul murketlng,
whereby munufucturers ure lntroduclng low-prlced goods ln smuller puck slzes. Low prlced
suchets huve proved to be extremely populur ln smuller towns und vllluges, where people do
not prefer to buy lurger pucks due to flnunclul construlnts.