Major Pharma Clusters
States with more than5000 registered food processing units
States with two or more operational Mega Food Parks
Uttarakhand
Andhra Pradesh
Tamil Nadu
HyderabadMaharashtra
Baddi-Solan
Ahmedabad Madhya Pradesh
Sources: Federation of Indian Chambers of Commerce and Industry (FICCI), Center for Market Research & Social Development, Mordor Intelligence, Ministry of Food Processing Industries, Invest India
INDIAN PACKAGING SECTOR: OVERVIEW
4.3
20
42
India Taiwan Germany
Packaging Consumption Per Capita (in kilogram)
India and the World
CHF 75 billion Indian Packaging
Sector (2020)
CHF 205 billion Indian Packaging
Sector (2025 E)
22,000Registered Packaging Companies in India
85%Manufacturers in the small
and mid-size segment
Market Size Sector Hubs
Sources: Euromonitor, Wisconsin Economic Development Corporation, Goldstein Research
38%
32%
7%
13%
10%
Beverages Packaging(Segments by material used)
Rigid Glass Metal cans Cartons Caps
Soft drinks sub-segment is expected to grow 13% till2023 from current 44 billion units in 2019. Whereas, teaand hot beverages packaging sub-segment will grow at6% rate from 2019 to 2023 riding on premium and eco-friendly product demand.
45%
25%
10%
10%
10%
Packaging Materials and MachineryEnd Users (by share of volume)
Food Processing
Pharmaceutical
Personal andHomecareProducts
Hot Beverages
IndustrialProducts
Beauty and Personal Care Packaging(Trends)
Dispensing Systems
Airless Packaging
Smaller Pack Sizes
Home Care Packaging(Trends)
Stand-up Pouches
Refill Packaging
Innovation in Pack Formats
KEY SEGMENTS: END CONSUMERS
Sources: Federation of Indian Chambers of Commerce and Industry (FICCI), Export Import Data Bank, Department of Commerce, Interpack Alliance, Packaging Gateway
36%
64%
Packaging Sector Segments(by value)
Rigid Flexible
Segmentation by type of material
55%20%
10%
15%
Packaging Materials Segments (by revenue share in %)
Plastic
Paper andcardboardGlass
Other
Import Trend of Packaging Materials
4068
101
349
4780 75
272
0
50
100
150
200
250
300
350
Sacks and bagsof jute and
other textilematerials
Glass bottles,jars, and lids
Paper cartons,boxes, bags
includingwrapping paper
Plasticpackaging goods
Import of Packaging Materials in India (values in CHF million)
2018-19 2019-2020(Apr-Jan)
KEY SEGMENTS: TYPE OF MATERIALS
Sources: Avendus
40%60%
Automation in Corrugated Segment (Share in capacity)
Automatic lines
Semi automatic / manual line
KEY SEGMENTS: CORRUGATED BOXES
56% Corrugated
Polybag, others44%
Transit Packaging Material Segments (Share in Indian Market) CHF 660 billion
Market size of TransitPackaging for E-commercein India (2020)
USA and Canada
1,30012,000
India
Number of manufacturingunits of Corrugated boxes:A Comparison
Import Trend of Packaging Machinery
251229
144
11
198 190
105
80
50
100
150
200
250
300
Filling, sealing andlabelling
Paper packaging Wrapping and heat-shrink
Container and bottlecleaning and drying
Import of Packaging Machinery in India (values in CHF million)
2018-19 2019-2020(Apr-Jan)
Sources: Export Import Data Bank, Department of Commerce, Icegate
Customs Duty on Packaging Machinery
Sl. No.
Equipment HS Code Effective Duty (in %)
1 Bottle cleaning and drying 842220 38.0
2 Filling, sealing, capsuling 842230 35.1
3 Wrapping including Heat-shrink wrapping machinery
842240 35.1
4 Paper packaging machinery 8441 27.7
5 Automatic labelling machinery
84798999 27.7
PACKAGING MACHINERY
Sources: India Retailing, Media releases
01
KEY TRENDS: IN PACKAGING TECHNOLOGY & MATERIALS
01
Growing shift towards
Bioplastics owing to
range of applications.
PLA (Polylactic acid) is
the most common
bioplastic in use in India.
02
Mono-material
packaging technology to
develop ‘Synthetic
Paper’ which results in a
recyclable packaging
product with better
longevity than paper.
03
Focus on functionality of
products to ensure
reusability and re-
closability to improve
product experience.
.
04
Equipment for product
pack design, labelling
especially for food
processing industry
where packaging is a key
differentiator.
05
Consumption of Paper
based packaging
material rising and Kraft
paper and cardboard
volumes are expected to
be 6.7 million tonnes by
2021.
PILLARS OF
GROWTH
• Compliance with Good Manufacturing Practices (GMP) have led the Pharmaceuticalindustry to upgrade packaging processes and systems
• Industry is more open to product safety and packaging standards are being adoptedgradually
Growth of Indian Pharmaceutical Industry
• Government’s plan to phase out single use plastics has sparked innovation• Lower tax rates for new manufacturing units among government’s strategies to make
India a global manufacturing hub
Government Initiatives
• Growing inclination of population towards Ready to Cook and Ready to Cook foodproducts
• Retail, Fast Moving Consumer Goods (FMCG) riding the digital India drivenconsumption wave
Evolving Consumer Behaviour
• Major organizations including Indian Railways, Air India, Zomato, Amazon India,Nestle planning to shun plastic for eco-friendly options
• Sustainable sourcing, packaging and labelling are emerging as key productdifferentiator
Sustainable Sourcing Altering Demand
Sources: Media releases
GROWTH DRIVERS
Sources: Packaging Industry Association of India (PIAI), Ministry of Food Processing Industries (MoFPI), Euromonitor
Synthetic paper, jute, paper, and agricultural waste asflexible packaging material gaining popularity
Growth in Indian e-commerce, organised retail, FMCG,and online food aggregators to boost demand
Smart packaging for product management and tamperprotection are expected to become a norm
A
C
Sustainable Flexible Packaging Segment
Demand from E-commerce and Customer Industries
Innovation by Leveraging Tech and Automation
The estimated costs of processing and packaging food in India are up to 40% lower than in Europe. Availability of skilled and cheaper labourand proximity to established export markets of South Asia and Middle East makes India an attractive venue for investment in packagingmanufacturing.
1
2
3
Tetra packaging technologyin demand as Indiaimported CHF 380 millionAseptic packaging paper in2018-19
Dairy exports witnessed a126% growth in 2019 with49 billion dairy packagingunits used nationwide.
Innovation in biodegradableplastics as single-use plasticcomprises 40% of nearly 10million tonnes plastic wastegenerated
OPPORTUNITIES
• Ministry ofConsumer Affairs hasmade it mandatoryfor package boxes ofstandard sizes
• Government of Indiaand Indian Instituteof Packagingdesigned thepackaging norms forproduct exports
Packaging Standards Food Safety (Packaging & Labelling) Regulations
• Guidelines defininglabelingrequirements for allpackaged food inIndia
• Mandatorycertification toensure materialquality and meetglobal packagingstandards
Profit-linked Tax Holiday
• Companies involvedin packagingactivities ofperishable foodproducts exemptedfrom paying tax on100% of profits andgains
• Step to encouragepackaging of fruits,vegetables, dairy andmeat products, andminimise waste
Sources: Food Safety and Standards Authority of India (FSSAI), Ministry of Consumer Affairs, Make In India, Export Import Data Bank, Department of Commerce, Icegate
Customs Duty on Packaging Material ImportsGovernment Policies
Sl. No.
Product HS Code Effective Duty (in %)
1 Jute packaging 6305 50.5
2 Plastic packaging 3923 31.0
3 Glass packaging 7010 31.0
4 Paper packaging 4819 24.5
5 Wooden packaging 4415 24.3
GOVERNMENT POLICIES: AND REGULATORY LANDSCAPES
Acrobat Pro DCAcrobat Pro DC
Sources: T&A Analysis, Media releases
INDIA SET-UP: CASE STUDIES
Constantia Flexibles
Austria-based world’s third largest flexible packaging producerhas set up world’s first fully sustainable and recyclable flexiblepackaging manufacturing plant in Ahmedabad India.
Sustainable homogeneous material of EcoLam product family,with minimum carbon footprint, is the innovative solutionproduced at the facility.
Schott Kaisha
Schott Kaisha, the Indian joint venture of Germanpharmaceutical packaging major Schott, has planned to investover CHF 65 million during 2018-2020 in India.
The investment is part of company’s expansion plans bysetting up new facilities in Gujarat and North India.
Hoffmann Neopac
Hoffmann Neopac, a leading Swiss supplier of metal andplastic packaging, has entered the Indian packagingmanufacturing space with the acquisition of leading Indiantube packaging firm 3D Technopack.
The Mumbai-based manufacturing facility produces over 120million tubes annually and caters to export markets in Europealong with domestic Indian demand.
Huhtamaki PPL India
Finnish packaging giant Huhtamaki has invested heavily inIndian flexible packaging segment.
The company currently operates 17 manufacturing facilities inIndia and expanded into Indian labelling segment with theestablishment of its manufacturing unit in Sikkim.
Distribution Strategy(based on existing distribution channels)
Flexible Manufacturing
Pan India regional offices
Bulk Paper Manufacturing Distributor network
Eco-friendly Bag
Manufacturing
Mix of local distributors and in-house sales
team
Alternative MaterialPackaging
ManufacturingIn-house sales team
The quality-conscious organized segment,which caters to major food andpharmaceutical companies, can betapped by providing diversity ofinnovative products with a focus onsustainable packaging material segments.
For large companies and multinational corporations,establishment and acquisition of mega product andequipment manufacturing facilities which ensuremeeting the demand of growing retail and FMCGsegments and product standardization technologies isthe recommended strategy.
Unorganized sector, though provides highestopportunity by volume, is highly price sensitive andas a result the profit margins may not be satisfactoryfor a foreign investor with superior and premiumpriced equipment and material
Sector Strategy
GO TO MARKET: STRATEGIES
TRADE STRATEGY
Exports of packaging equipment and products to understand the Indian market
Access to the sector’s established distribution and marketing infrastructure
India manufacturing operations commencement by commissioning facilities around Food and Pharma clusters