ITC Ltd is upbeat on the flexible packaging business in the country and for export items. The FMCG major is in the process of expanding operations by commissioning fresh capacity to address the growing business opportunity.
The need for differentiated packaging and change in lifestyles are expected to drive the demand. Increase in demand from rural markets, branded packaged products and organised retail growth is seen to fuel the volume growth. R Senguttuvan, Chief Executive, Packaging Division, ITC Ltd, told Business Line that the industry is poised for interesting times ahead with the fast-paced growth of modern retail and global packaging companies setting up shop in India.
How is the country’s packaging business doing? Any major changes in the way packaging is handled now in the FMCG segment?
The packaging sector in India has been growing at a compounded annual growth rate of approximately 16 per cent and is one of the fastest growing packaging markets in the world. The demands of the FMCG segment are evolving everyday and are becoming more and more challenging. As a result, we need to continuously innovate in line with the growing expectations from this segment.
What are ITC's plans to address the growing opportunity in the packaging industry?
We have continued to leverage our multiple packaging platforms to expand business in the domestic and export markets, and have grown volumes both from existing customers as well as enlargement of our customer base. ITC continues to be the leading supplier of value-added packaging to the Consumer Electronics and FMCG sectors.
The business is investing in a paperboard machine at Bhadrachalam and new packaging and printing facilities at Haridwar? How will this augment capacity?
During the year, we have continued to invest in contemporary technologies in flexibles and paperboard packaging at the Haridwar and Chennai facilities. We have also undertaken expansion projects at both facilities to address growing opportunities in external trade and to enable manufacture of a full range of packaging solutions from both locations.
The expansion programme includes the addition of a carton line for meeting the growing demand from the northern region, apart from balancing investment in flexibles packaging to enhance competitiveness. A new paperboard machine with a capacity of 1 lakh tonnes will be operational in the first quarter of 2013.
The business seems to provide strategic support to FMCG business. What are your plans in this area?
We provide contemporary and superior packaging solutions facilitated by state-of-the-art technology and processes. We continue to provide strategic support to ITC’s FMCG businesses by providing innovative packaging solutions and security of supplies in addition to delivering benchmarked international quality at competitive costs.
Our in-house capabilities as well as integration and synergy with our Paperboards Business have enabled quicker turnaround of designs, pack changes and reduced product launch timelines for ITC’s FMCG businesses, thereby providing a source of competitive advantage for ITC in the market place.
How is ITC looking at the packaging business overall?
With continuing investments in technology, quality management systems and processes, dispersed manufacturing footprint and a diversified packaging portfolio, the business is well poised to service all the requirements of ITC’s FMCG businesses and to rapidly grow its external trade.