Bengaluru: India’s largest flexible packaging company Uflex Ltd’s biggest factory will be operational by end-February and start producing commercially by April-May next year.
The company’s new plant is being built in Sanand, Gujarat, and is expected to contribute Rs2,500 crore to revenue over the next three to four years.
It already has six other factories spread across India and plants in other countries including the U.S., Poland, Mexico, the UAE and Egypt. The one in Gujarat will be its biggest globally.
With the new factory, Uflex is also entering the aseptic packaging industry that is set to grow from $38.25 billion in 2015 to more than $67.47 billion in 2021 worldwide, according to Zion Research estimates published earlier this year.
“We’re coming up with aseptic packaging for the first time with our new plant in Gujarat. With that we will complete our product portfolio," said Uflex’s president and chief executive officer Ashwani Kumar Sharma.
“When I say product portfolio—we already package solids, semi-solids, powdered materials, gels, etc. We were not doing liquids. With this plant we will be doing liquids," he added.
Flexible packaging, which is what Uflex does, is a type of package or container made of materials that are supple or bend easily like paper, film and foil. Aseptic packaging is a method of packing a product in a way that preserves its sterility and freshness.
Uflex, which earned Rs6,200 crore in revenue last year, bought 72 acres of land for the new Gujarat plant and has already built-up 21 acres under the first phase.
Another 21 acres have been set aside for phase two and the rest of the site will be used for other projects in future. The company has invested Rs580 crore on phase one at its new plant and total investment is currently estimated at Rs1,500 crore.
Phase one of the plant will cater to three segments—dairy, beverages such as juices, and alcohol. Uflex’s in-house research helped identify these three key segments. It estimates the size of the Indian aseptic liquid packaging market at around 10 billion packs this year. Of those, juices make up 5 billion packs, alcohol accounts for 3 billion and the rest comes from dairy.
Leaving aside the aseptic packaging foray at its new Gujarat plant, the company has ventured into two other new categories over the past three years—consumer tubes, which could be used to pack products ranging from toothpastes to face creams; and the construction business, i.e. packing cement into bags.
“There is tremendous growth in packaging. Flexible packaging in India we are looking at 15%+ growth. We are around $1 billion sales, depending on how the dollar is moving. By 2021 we are looking at doubling the top-line. So we are looking at $2 billion sales in next five years’ time," Sharma said