Positively inclined towards India growth story

India has some inherent growth engines attached to its economy, like large consumption base, increasing incomes and fast changing lifestyles, says Sanjeev Khandelwal, director, renewable packaging, Stora Enso India.

20 Oct 2014 | By PrintWeek India

PrintWeek India (PWI): Interpack 2014. How was the show in terms of sales or outreach? Did you meet your expectation?
Khandelwal (SK): We had a very good show at Interpack 2014. It was an excellent opportunity to showcase our new innovations and strength of our existing product palette. Besides our recently improved high bulk boards, Tambrite and Tamfold, the new launches like Cupforma Ice for ice cream packaging and Cupforma Natura PP, a microwave-proof cup stock board for food and soup packaging, received an overwhelming interest. Further, one of the most innovative solutions presented at Interpack was our new Candy Cup packaging solution, developed by Stora Enso and AR Packaging, which was highly acknowledged by very many visitors and journalists.
PWI: Paper companies have been acquiring smaller paper manufacturing companies to take advantage of abundant natural resources. Have you acquired any? What advantages have they accrued to you?
: When it comes to expansion, we are largely focused on emerging markets and follow our international customers. Some time back, we increased our shareholding in Bulleh Shah Packaging in Pakistan and we are now building a greenfield board mill in Guangxi, China. This is in continuation of our acquisition of Inpac International, China, a couple of years ago, with package printing and converting units on several locations in both China and India.

PWI: India’s growth story: How significant is it for you?
: We are positively inclined towards the India growth story and are firmly established in the country, with our sales office and a mill, i.e., Stora Enso Inpac Delta India, which has excellent package production capabilities in Chennai.

PWI: Your growth: one, give us an update on the numbers; and two, in terms of tonnage and value, what kind of impetus is expected for India?
: As mentioned earlier, we are very positive about the growth prospects in the South Asian region, especially India, with its large consumption base. We do not comment on the individual market figures.
PWI: You have taken a number of environmental initiatives by making new products like wood-free packaging applications. There’s also the FSC certification. But FSC as a trend hasn’t really picked up in India...
SK: In India, consumer awareness about the sustainability aspect is not as strong as it is in developed markets, but it is definitely picking up, pushed by both environmental organisations, and by multinational food and consumer product companies, who ask their packaging suppliers to adhere to their global procurement policies, which often includes packaging raw material from certified sources. There are also such demands when it comes to package manufacturing for export markets. For Stora Enso, our global responsibility is a business asset, and with our chain of custody for both PEFC and FSC certification schemes, as well as our own traceability systems, we always know where our raw material wood comes from. We only use wood from legal and acceptable sources. From the long term global perspective, sustainability is a very important aspect – the new set of global values which are driving today’s individuals and organisations around the world to rethink their positions and priorities.

PWI: There seems to be a shift from recycled to virgin fibre – your views and forecast... 
: To my understanding, we are seeing a shift towards optimum packaging and right weighting. With increasing focus on value engineering, brand owners and their dedicated packaging development teams are looking into all aspects of packaging performance and hence, virgin fibre based products make sense in terms of product safety (especially for food products), increased supply chain efficiency, improved performance on customers’ packaging lines and reduction in ecological footprint. When a brand owner goes for a light-weight virgin fibre based board with equivalent stiffness, he not only reduces the package weight but also benefits from more efficient transportation, less packaging waste and reduced fossil fuel consumption, thus improving the overall cost/value paradigm.

PWI: Converting paper, paperboard or films is a challenge. They need a number of inputs – machinery, systems and processes. Then there are efficiency norms that packaging converters have to follow. Do your products match the requirements?
: We have world-class products for very efficient converting and most demanding packaging performance. For example, in our constant endeavour to keep our packaging boards at the top of the quality pyramid, we have recently introduced our Tambrite FBB board with improved quality. Printing and packaging trials on high-speed pharmaceutical packaging lines proved that 215gsm Tambrite can be run at high speeds, enabling typical 250gsm folding boxboards to be replaced by our light weight option. This is possible because of the stiffness of Tambrite. We serve global brand owners also with our range of liquid packaging board, cigarette board, graphical board and various general packaging boards, so our products are indeed well fitted to meet the most stringent quality and efficiency requirements. Our R&D and product development facilities contribute to keeping our product palette innovative and ahead of the competition.

PWI: Is there an international standard for whiteness, brightness and surface smoothness? What is it and does your material confirm to it?
: Whiteness, brightness and surface smoothness are critical properties when it comes to visual appearance of a print product or premium packaging. Our number one brand for luxury packaging and graphical products is Ensocoat, an SBS board printable on both sides, high whiteness and UV resistance, and smoothness for demanding special effects.

PWI: Indian boards and papers are said to be acidic whereas alkaline paper is best for printing...
: Alkaline or neutral sized paper and board are preferred for a better print performance. Most of Stora Enso’s paper and board qualities come with neutral or alkaline sizing.

PWI: China, Japan and India account for nearly 82% of packaging demand in Asia, of which board accounts for 38%. It is expected to rise at an annual rate of 5.6% till 2016. What are the few things that your company can offer to packaging converters in India, to tap growth areas?
: Beside the world class product range, we provide an assured supply chain and high level service. Our segment development, technical customer service and design studio facilities support brand owners and converters in packaging development, which in turn helps our customers to improve their business by optimised packaging solutions.

PWI: Is there a preferential pricing for those converters who buy in bulk? If so, why? Doesn’t it lead to pricing irregularities? 
: There is no such differential pricing, but having said that, converters who buy regular and foreseeable volumes do get some advantage, as better forecasting helps us in negotiating raw material and transport prices accordingly, improving our machine efficiency and supply chain. It is a fact that is valid across all industry segments, I think.

PWI: In the present volatile situation, packaging converters are looking around to see where they can gain from. When we talk about paper and paperboard, where are these?
: If you adopt a short-sighted, low-cost oriented approach, you easily end up missing the larger picture, wherein the converter could have gained substantially in the long term by giving differentiating quality and service to brands and consumers. This becomes more pertinent in the Indian context as almost 90% of the package converting companies in India are owner driven and exist in MSME space. If you want to gain I would say that the quest to make quick money should not overrun the focus on the growth-oriented deliverables in the longer term.

PWI: How do you see the future of packaging, especially in the light of the media campaign by major spenders against rigid containers and in favour of pouches? 
: The Indian packaging market is growing at a fast pace in all segments, not just flexible packaging. If you look at the global packaging market, it is currently estimated to be about USD 800 billion in size and paperboard comprises around 30% of it. There is an aggressive competition between the different packaging substrates and the winner will be decided on the basis of five major aspects: price, functionality, sustainability, regulatory environment and consumer appeal. Paperboard enjoys a high status in every aspect.

PWI: The needs of paper and paperboard is evolving fast. What is your market vision (segments from where the forecast is coming from) and strategy for the coming years?
: India has some inherent growth engines attached to its economy, like large consumption base, increasing incomes and fast changing urban lifestyles. I foresee that all the product segments will grow fast in the medium term; however, the evolution could be even faster in the food packaging segment because of the lower consumption base. When it comes to paper, high emphasis on education will drive the growth for the next few years.