In the good old days of manual corrugation lines the toughest department was the creasing department. These days, a box is no longer a box. Talk to any brand manager who wants a box, the talk is about the bending stiffness and compression strength — BF versus RCT.
And why not?
The numbers are stacking up.
As per the packaging survey by Print Industries Market Information and Research Organization (PIMIR), the research unit of NPES and VDMA, the Mechanical Engineering Industry Association of Germany, along with Economist Intelligence Unit (EIU), by 2020, Indian revenues will climb from USD12.2bn to reach USD18.6bn, just below Japan, the third largest market in print packaging revenues.
Of this, the flexible market segment will be USD 5.6 billion, folding carton will account for USD 3.9 billion, and corrugated will be USD 5.5 billion by 2020.
In real terms, there are 375 automatic corrugation lines in India and 1,2000-1,4000 semi-automatic lines (litho-lam type). In terms of output, the automatic lines contribute to 40% of capacity with a conversion ratio of 2-million MT; while the semi-automatic lines contribute to 60% with a converting ratio of 2.7-million MT.
The shift to automatic corrugating lines has begun.
The WhatPackaging? team feels that in the next three years, India will double the number. Having said that, Kirit Modi, president of Indian Corrugated Case Manufacturers’ Association (ICCMA) says, there will be space for both types of corrugation players. So, the corporate clients will source their requirements from automatic lines, and small volumes and the niche markets will be served well by semi-automatic converters.
Corrugation industry trends
Today, the two largest consumers of corrugated boxes are textile sector (around 22%) and processed food sector (around 20%). With the government of India focus on packaging of fresh produce and process food, one can expect to see a boost in this sector.
According to Ramkumar Sunkara, consultant, India is the second largest producer of textiles and garments in the world. He points to three data sets, “The Indian textiles and apparel industry is expected to grow to a size of USD 223 billion by 2021 (according to a report by Technopak Advisors) and the market size for food in India, which was at Rs 23 lakh crore in 2014, is set to reach Rs 42 lakh crore by 2020, says Boston Consulting Group.”
Sunkara adds, “Technavio’s analysts forecast the flexible packaging market in India to grow at a CAGR of 24.21% over the period 2014-2019. Any growth in flexible packaging market is great for shipper cartons.”
Rakesh Sodhi of Sodhisons Mechanical Works agrees that this is a boom sector. But he cautions that corrugators must look at a proximity and logistics advantage with a customer, as well as cost of raw material and machinery investment return.
Sodhi feels a corrugation firm must plan for both regular volume business and occasional small run jobs for survival. He states, most small sized corrugators are unwilling to step out of their comfort zone. This could be funding methods or old habits like not selecting the proper creasing matrix for a die. Therefore, a corrugation firm needs to have worldwide technological exposure, engage experts instead of relying on old time operator, adopt systematic approach, and invest in manpower.
Sunkara agrees, “Make in India will bring many international players. Standardisation of GSM and BF will be the norm. For high speed corrugators, reel finishing is an issue. Plus box customers insisting on unit weight reduction year on year as commitment. All these things need to be sorted out.”
The Bobst story
The first installation of a Bobst FFG transpired in 2013 at Pyramid Packaging, Bengaluru. It was a Bobst FFG 618 Quattro, four-colour rapid set machine which is capable of converting 3/5 ply board to RSC brown boxes. The boxes could be 1- or 2-colour printing on brown surface or multicolour boxes able to print on uncoated white kraft liner board. The machine has the capability to do all the following functions inline from printing, to slit and score, rotary die-cut, fold and glue, stack and make pre-determined bundles with inline bundler or strapping machine.
Venugopal Menon of Bobst India says, “Such kind of machines have the capability to convert and produce close to 2,00,000 boxes/day with up to 18-20 changeovers per day.” He adds, such machines almost translate to 2000 MT/ month of board conversion or more on a three shift basis on a single line depending upon the mix of 3 / 5 ply box and average box weights.
In the early 2016 India saw the installation of India’s first FFG 1228 NT RS, high graphic flexo board line at Astron Packaging, Ahmedabad, capable to print up to six-colour with inline converting. The machine is capable to produce the traditional RSC brown boxes, wraparounds, multicolor RSC boxes and multicolor rotary die-cut boxes for fruits and vegetables.
Menon says, “In India, the corrugated companies have been working on the traditional offline converting route to produce the RSC boxes with multiple machines, multiple handling, increased WIP and thus a more labour oriented process. The boxes could be eventually formed by either offline gluing or manual stitching.”
Menon adds, “But with demand for increased quality in terms of squared boxes with minimal fish tailing and gap (due to increased automation with casemakers at the end user level), more and more glued boxes, demand for better strength characteristics, just in time deliveries with increasing shorter run lengths, many of the organised and leading corrugated players have adopted inline converting as the way forward.
The year 2015-2016 has been a breakthrough year for Bobst with sale of almost five FFG 820 Discovery lines. Most of these machines are either two-colour or four-colour lines with Rapid Set technologies which enables very fast changeover and high productivity. Most of these installations transpired in South India with leading names like Panoply Packaging, South Indian Paper Mills, MNM Triple Wall.
In addition, there is Girnar Packaging, Vijay Anand Packaging and the big ticket installation in 2017 the six-colour FFG 924NTRS in Meghdoot Packaging’s North India facility.
We are the Champions
C Naresh of Suba Solutions has a healthy installation base with 11 lines of Champion machinery in the market. Out of which five are 5 ply, one 3 ply and five single face automatic lines from reel to stack.
Naresh requests new investors to be cautious. He says, “Corrugation packaging (shippers) is totally a different business model, particularly for automatic plants.” Hence Naresh does not suggest an automatic corrugation plant project to a commercial printer since “it is highly capital intensive”. He adds, “Already the market is crowded. And with more and more players entering, it is going to be tough.”
He has common sense advice for an investor. He says, “Before planning a corrugation plant, one has to check the volume of business available in that region. Second is the availability of space. Factory area plays a vital role in the functioning of a company. Be prepared to construct a reasonable size for operation and to scale it up when the volume of business increases.”
He feels very few corrugators have an idea about “gross material waste”. He states, “Gross material waste (tonnage of paper for recycling and waste compared to tonnage used) is an easy measure for most litho printers and usually ranges from 15%-30%. A corrugation firm should have a scientific matrix to measure waste.
Naresh says, “In-house quality control is very important. Since the communication between a manufacturer and their client happens mainly around quality parameters, in-house system helps them to maintain their quality and communicate with their customer.”
Venugopal Menon says, “Corrugators are seeking to adopt appropriate technology which offers/ produces minimal wastage, more automation, reduce variable cost with minimal labour by adopting right technology and adopting from offline to inline converting process, manufacturing better strength board with lighter GSM grades, being able to work on JIT supply chain with better scheduling of RM inventory and minimal finished goods inventory, by upgrading, diversifying and offering to their end customers more value added boxes with multi-colour printing, offering die cut boxes, wraparound, rotary die-cut boxes for fruits and vegetables.”
Rakesh Sodhi says, “Time versus cost management is equal to quality. Now, this can be achieved by waste management, lower cost of production, easy flow of information, transparency, responsible manpower, etc. Today international food and consumer brands plus telecom giants are targeting the Indian market. So the key is volume converted by time saving high-end machines. Now is the time for right investment.”
Ramkumar Sunkara says, “BF is no longer the only performance criteria. RCT is yet to be fully understood. New performance standards are being introduced in corrugated boxes: flat crush test (FCT) of corrugated board which depends on Concora medium test (CMT) for fluting paper, and the heavy metals presence to be below 100ppm. Customers insist on certificates for the same.”
Are Indian corrugators in a position to deliver all this? The answer is yes.
Indore-based Worth Peripherals is a good case study. In 2016, the Chadhas installed an Emba Ultima four-colour flexo folder gluer at their eight-acre factory. This is one of the first five models of this machine to be installed worldwide. The 25-year-old company hopes to boost production capacity to 3,500 tonnes at its production facility which includes a Hsieh Hsu double wall corrugator, a two-colour Dong Fang printer slotters, an Oshitani folder gluer and two South Korean folder gluer/stitchers.
This is the new avatar of an automated corrugation plant in India with “vacuum transfer system that ensure virtually zero crush and prevention of caliper loss. Also the ability to produce quality boxes with lighter weight papers."
Be it, textile boxes or garments, there are orders from manufacturers who seek sturdy outer boxes for exports. Plus, agro companies that seek boxes for fruit and vegetables. These are boxes that boxes need lots of graphics as well as shelf ready boxes for display. Even as chilled and frozen food is witnessing growth in India, the demand for corrugated is on the rise. Particularly for dairy, meat and poultry products.
The box is seeing a boom.