The panel discussion, organised by EFI was moderated by Rushikesh Aravkar, technical editor, WhatPackaging? and EFI India’s Sanil Nair.
During the discussion, one thing was clear: despite the fluctuations in kraft paper prices over last 24 months, the corrugators remain undeterred. Though limited by the paucity of time, the 90-minute healthy deliberation made a way for the pain points to surface.
Today the corrugation industry is undergoing the transformation with more and more automated lines being installed; acceptance of performance-based parameters by user companies; rising demand for multi-colour lightweight high strength boxes; and new applications like fresh produce and eCommerce; the model is changing. The volumes for corrugation industry in India are on the rise. All the panellists agreed to this while raising the need for efficiency improvement in corrugation plants.
Several focus areas were addressed during the meet including quality of kraft paper, digital printing technology, waste reduction, best practices and workflow.
Among all this, the central theme of the discussion was how to differentiate and retain customers. Ganesh Skanda, plant head, Horizon Packs, said, “We try and convert the regular brown box orders to the multi-colour point of sale boxes with perforations which directly goes on the shelf. This adds value not only to us but also for the customer. We see a lot of shift towards four-colour and five-colour boxes. Today, offset printing dominates the multi-colour boxes but flexo quality has significantly improved.”
According to Sanjay Chhajed, managing director of Pune-based Paack In India, in the near future digital printing could bring about a transformative differentiation in the corrugated sector. “The corrugation industry is going through a good phase and growing. Probably it is one of the rare products which have lasted for over hundred years of their life cycle and I don’t see any replacement for this. Plus the government initiative of banning the plastic is going to benefit the corrugation industry. I believe, digital printing will find its place in corrugation too. At the moment the only constraint with the digital printing is the cost, both in terms of capital expenditure and the finished products that you will be selling to the customer. Over a period, I feel, the technology will evolve and we will have lower equipment costs and manufacturing costs.”
The issue with making investments in new printing equipment is the return on investment, and as Skanda pointed out whether the customer will pay for the added value.
Chhajed said, “It’s not possible as yet. In the corrugation segment, the customer psychology is very clear, they are not ready to pay even five paisa more. There can be rare cases like an innovative POP job or short runs where you might be able to demand 1-2% additional charge for the job but that’s very rare.”
Rajkumar Aggarwal , CEO, Avon, said, “The corrugators need to start approaching the customers and giving them new ideas on how they can win in their battle against the other brands for the acquiring the consumer attention and his wallet share.”
Concurring with Aggarwal’s opinion, Sam Gulve, vice president - engineering and managing director, EFI India stressed that differentiation is the key. He said, “Consider the eCommerce industry, the Amazons or the Flipkarts of the world, they know their customer intimately. They have the entire buying history of a customer, his demographic profile, his income and spending levels. They have sophisticated apps and on the mobile phones, which every passing day discover a new thing about the customer. Now they are actually starting to use this brown space on the corrugated box as an ad-space and generate revenues. So now the brown box needs to be a multi-coloured box.”
While the panellists agreed that digital printing will bring about a transformation in the sector, Ram Kumar Sunkara, managing partner, PR Packaging Service argued that single-colour printed brown box will remain dominant.
Sunkara pointed out, “The role of a corrugated box as tertiary packaging is to ensure the protection of products inside during warehousing and transit and safe delivery to the destination. The end customer is going to see the duplex carton on the shelf then why should brand replace a single-colour printed shipper with a multi-coloured one? And this is true for the majority of the products. Now, we hear that e-retailing will push digital printing. In my experience, when we order something from an e-commerce website, it is delivered in a brown box with one-colour printing. I have never seen digital printing on it. Furthermore, there are some products which have a multi-colour primary pack and these primary packs end up in a brown box during delivery. So, the brown box is here to stay.”
Replying to Skanda’s point of view, Chajjed drew a parallel with what digital printing has achieved in the wide-format printing sector.
“I have seen the digital printing changing the scenario of signage industry over the past 25 years. For one signage to be printed using offset technology, it used to take a day or two. Then digital printing came in and we started printing signages at a rate of 5-7 feet per hour. Today, we are printing more than 1-lakh square feet per day. The first hoarding that we did was at cost Rs 2,200 per sq ft. Today, the flex printing rate is Rs seven per sq ft. A similar kind of transformation will happen in the corrugation space too. Cost may be a concern today, but everyone is going to venture into it. ”
“Last year, the total corrugated box business in India was 4.8 million tonnes and it is expected to grow to 11 million tonnes by 2022. We can’t assume the entire 11 million tonnes is going to be digital printing. The brown box will remain. But within that, there is an opportunity for digital printing. Say, the requirement is to print 25 boxes with one contact number, the next 25 boxes with another contact number, the total box quantity is 10,000 boxes but these 10,000 boxes have a print which is varying for every 25 boxes. These types of jobs are an opportunity for digital printing.”
Managing wastage; optimising efficiency
Pratik Patel, manager –production, South India Paper Mills, said, “We classify waste into three types. One is paid wastage, paid wastage is what we say trim waste or margins which is a one way of earning to corrugators. Second is the unpaid waste, which is your process waste. Third is ghost waste, ghost waste is what we lose due to bad paper, due to variations in paper, moisture difference or excess GSM being supplied. As customer awareness increases, the paid waste will be curbed from the costing. So, the only way to sustain is the controlling process waste and ghost waste. That’s what we need to concentrate and for that productivity improvement and process control software like what EFI offers will be of great help.”
When asked about their efforts to optimise shop floor operations and reduce wastage, Rajkumar Aggarwal, CEO, Avon Containers, said, “In corrugation, 70% of the product cost is related to the paper. One is the trimming waste and another is the process waste. While calculating the cost to the customer we cost for trimming waste too. When we talk about process waste, there are many factors that are affecting the optimisation of the press. When we are on the manual plants, the speed, moisture, viscosity, the temperature can be controlled manually. But when we work on the automatic plants, working at a speed of 150m/min -200m/min, changeovers like temperature are not supported by the machine. Even in power trip, few metres of material is wasted. We took a dedicated line from the power hub for the electricity supply in order to eliminate this particular waste which saved us around Rs 5-lakh per month.”
Chajjed made an observation about the quality of input raw material. “A lot of wastage also is because of the inferior quality of raw material available to a corrugator. The fact of the matter is that the corrugation industry has to find its margins from the waste control. 70% part of the costing constitutes of paper and another 20% are operational costs, so a corrugator needs to squeeze his profit margins from the remaining 10%. Therefore, wastage control is one area and likewise improving the quality of the paper or using better paper are a means of survival.”