India-based flexible packaging firm Essel Propack Ltd. has aggressive expansion targets as it hopes to grow to $500 million in annual sales in several years, with overseas markets playing an important role.
“We have a CAPEX of around 150 crore rupees ($22.6 million) annually on new projects and expansions and it is a continuous process with us,” said Ashok Goel, vice chairman and managing director, at the Speciality Films and Flexible Packaging Global Conference, held Sept. 15-16 in Mumbai.
Mumbai-based Essel has annual sales of about $380 million, with 21 factories in 11 countries, and is part of the $2.4 billion Essel Group.
Goel declined to comment on any specific geography for the new projects, since the company is publicly listed on the Bombay Stock Exchange, but suggested Essel is interested in continuing to push in global markets.
“We are hungry to grow in Europe and South America, Africa is also a good geography to explore,” he said. “We could also look at the Far East as it too has fast growing economies.
“We are working on a couple of greenfield projects in Europe and Asia,” he said. “We will take a decision soon on where to expand first.”
Speaking at the conference, Goel said the company has benefited from an expansion into the market for non-oral care plastic laminated tubing.
The company has a 33 percent share of the global market for plastic tubes for oral care products, but has been expanding into the larger market for non-oral care products like cosmetics and pharmaceuticals.
“This has been a wise move as 42 percent of our sales revenue comes from non-oral care in [fiscal year 2015],” he said. “We are targeting sales revenue of 50 percent from non-oral care.” Goel said.
The company set-up a non-oral care packaging plant in Suzhou, China, it's fifth in that country, in 2014.
The oral care market is about 14 billion tubes a year worldwide, while the non-oral care market is about 22 billion tubes a year, the company said.
The decision to diversify required lot of changes in operations, he said: “We have made changes right from the size of the orders, lead times and the capabilities required to execute them.”
It also had to work on getting customers to transition in packaging from other formats of packaging to laminated tubes, he said.
The firm has also invested in new equipment to diversify, he said, with earlier versions of its tubing machines producing 60 tubes per minute, compared with new machines that manufacture 500 tubes per minute. It has also upgraded its printing and decorative capabilities, Goel said.