Government proactiveness has boosted packaging sector
Annamalai Venkat of FPTA began his presentation during the IPPTA webinar on 7 November by saying "the headwind turned out to be a tailwind for the packaging industry. Mainly because the government of India permitted manufacturing of essentials like pharma, food, key commodities. He said, starting from 25% of the pre-Covid levels in April; capacity utilisation has notched up 100%.
11 Nov 2020 | By Rahul Kumar
Venkat reteierated that the government's pro-activeness in permitting "the packaging units to function to ensure essential goods reach out to the common man in the most safe and hygienic manner has boosted the packaging sector."
He added, "the current levels have either equalled - and in certain cases surpassed the pre-Covid offtake." He attributed this to the festival season as well as pent up demand.
Venkat crunched some numbers about India's consumption in the packaging side:
- Kraft: 8 million tons
- Packaging board 3.5 million tons (Please nb: This includes 2.5 million of recycled grades and 1.0 million of virgin grades)
Venkat estimated that "kraft and recycled packaging boards are growing at about 7.5 to 9% whereas virgin grades have seen a double digit growth in the last couple of years."
Venkat provided a region-wise offtake. He said, It is estimated that North India and Western Indian zones account for a consumption of 30 to 35% each, while South India consumes about 20 to 25 % and East India about 15%.
Venkat spoke at length about the price of packaging boards. He said they have been "quite steady in the recent past, except some correction which has taken place in the virgin segment." However, he added, "Kraft prices have been very volatile due to factors such as pent up demand, shortage of recycled fibres etc.
Venkat added that the packaging segment has not witnessed any major surge in imports due to government policies, smaller moq's of Indian converters and also because of Indian industry becoming competitive.
Venkat felt the time is apt for the industry to "incubate and fund start-ups for ideation and take it to a logical conclusion for improving the demand for paper in newer avenues (for example, moisture resistant paper, without a plastic substrate). Also he said the industry needs to work with the think tank of chemists and other research agencies for the same purpose.
Venkat concluded his presentation by highlighting the segments that are drivers of growth in the near future in the packaging. These are: automotive, garments and hosiery, food, personal, home and health care, leather, paper cups, pharma, smartphones, white goods, etc.
Besides being the partner at Jeyam and Company. as well as director at Rose Flower Company Papers, A Venkat has been president of the Madras Paper Merchants' Association and Federation of Paper Traders Associations of India. He is a reputed distributor for ITC (paperboard and specialty paper division); TNPL; Seshasayee Paper and Boards, GVG Paper Mills, etc.