NOIDA, INDIA — Uflex Ltd., India's largest film and flexible packaging firm, is investing 550 crore rupees ($85.7 million) to build its fourth factory as it tries to enter the country's aseptic packaging market currently dominated by Tetra Pak Inc.
The Noida-based firm said its new factory in Sanand will have production capacity of 7 billion packages a year for the energy drink, milk and juice markets, among others, and would likely be operational in early 2017.
“We have already acquired around 70 acres of land and ordered equipment for the Sanand plant,” said Uflex President R. K. Jain, in an interview in his office. “Trial production would commence in October next year, while commercial operation would kick-start in April 2017.”
The facility would have one lamination and two printing lines. Jain said the company sees opportunities in the aseptic packaging market in India, where Tetra Pak has a 90 percent market share.
“India's liquid pack market is fast opening up and presents a huge opportunity to grow,” Jain said. “The Sanand plant would largely cater to the India market. Export opportunities to neighboring countries like Nepal, Bangladesh, Sri Lanka, Myanmar [and] Pakistan would also be explored.”
In a statement, the company said 90 percent of the Sanand production would be targeted within India.
The new Gujarat plant is part of Uflex's larger strategy to become a $2 billion group in the next five years, double its current sales of 6,200 crore rupees ($966.3 million).
In its last fiscal year, ending March 31, it had profit of 255 crore ($39.7 million), and said it is growing 15 percent to 18 percent a year in volume, and 12 percent to 14 percent in sales.
“Our next target is doubling the turnover to $2 billion in the next three to four years,” Jain said. “We continue to focus on process and product improvement in addition to capacity expansion.”
The company said plastics packaging in consumer goods is growing 15 percent a year in India, and will likely maintain that trend because the market penetration is low. About 80 percent of the potential market in India has not been reached, Jain said.
“Factors like changing lifestyles, economic prosperity, concern for hygiene, increasing demand for quality and branded goods, coupled with organized retailing, would in any way bring a boom to the sector,” Jain said.
It also plans to offer liquid pack filling machine from its Noida plant, Jain said.
It said Sanand will employ 250 when it first opens in 2017 but employment will grow to 3,000 when fully operational.