India’s largest flexible packaging and film manufacturing firm, Uflex Ltd., Is investing $85.7 million (550 crore rupees) to set up its fourth factory. The aim of this investment is to help the company step into the aseptic market, which is presently controlled by Tetra Pak Inc.
The new factory situated in Sanand will have a production capacity of 7 billion containers per year. Packages will be for energy drink, milk and juice market, among others. The factory is expected to be operational from early 2017.
Uflex President – R. K. Jain said in an interview that production trails would start in October 2016 and commercial operation will commence in April 2017.
The factory would have two printing lines and one lamination line. Jain said Uflex sees a lot of prospect in the aseptic packaging market in the country where Tetra holds 90% of the market share.
Uflex Invests to Step In to The Aseptic Packaging Market
Liquid pack market in India is opening up fast and presents a tremendous opportunity to expand. Jain said the Sanand plant would cater to the Indian market. Export opportunities to adjoining countries like Bangladesh, Nepal, Myanmar, Sri Lanka and Pakistan would also be analyzed, he added.
In a statement released by Uflex, the company claimed the Indian domestic market to be the target for 90% production of its Sanand plant.
The new Ahmedabad plant is part of Uflex’s bigger strategy of becoming a $2 billion group in the coming five years. Interestingly, during the last fiscal year, ending March 31st, the company notched up a profit of $39.7 million (255 crore rupees). It is growing at a rate of 15 to 18% every year in terms of volume and 12 to 14% in terms of sales.
According to Jain, Uflex’s next target is to double up its turnover to $2 billion within the coming three to four years. The company plans to focus on product and process improvement, in addition to expansion of its capacity.
According to the company, plastics packaging in India’s consumer goods is experiencing a rapid growth of 15% every year. This trend is likely to be maintained because the market penetration is still low. According to Jain, approximately 80% of the potential market is yet to be reached.
Jain is extremely optimistic about an upcoming boom in the sector due to factors like economic prosperity, changing lifestyle, increasing demand for branded and quality products as well as concern for hygiene.
Sanand plant will employ 250 people at first. However it’s likely to grow up to 3,000 employees later on when it becomes fully operational. To know more about Uflex, you can take a look at Short Form Consultants.