1. THE PACKAGING INDUSTRY IN INDIA An Industry Presentation from McG Madras Consultancy Group, Chennai - A Demopack of Select Slides -

2. McG 2 Contents *  Packaging Industry : Global Packaging Industry : Global  Packaging Industry : India Packaging Industry : India  Rigid PackagingMetal Containers Glass Bottle Rigid Plastics Paper Cartons Rigid PackagingMetal Containers Glass Bottle Rigid Plastics Paper Cartons  Flexible Packaging Flexible Packaging  Caps & Closures Caps & Closures  Labels Labels  Secondary & Bulk Packaging Secondary & Bulk Packaging  Packaging Machinery Packaging Machinery  Profiles of Packaging Companies Profiles of Packaging Companies  Consumer Packaging : Select Users Consumer Packaging : Select Users  Regulatory Environment Regulatory Environment * Note : This demo pack has only a few select slides of the contents

3. McG 3  Size of Packaging Industry Worldwide (est.) : USD 600 Bn. ( 2002-03 ) (excluding machinery)  US packaging market accounts for about 24 %  Western European packaging industry is dominated by Germany, France, Italy & U.K  Paper & Board leads with 36% of the world market followed by Plastics  World packaging industry has been growing at a rate of 3 - 5 % per annum Packaging Industry : Global

4. McG 4 RegionValueMarket Annual USD Bn Share (%) Growth (%) Western Europe125 282-3 North America120 261-2 Japan 65 151-2 Asia- Pacific 65 15 8 Latin America 30 7 7 Eastern Europe 15 3 6 Rest of World 30 6 7 Total450100 2-4 World Packaging Market by Region : 2001

5. McG 5 Indian Packaging Industry

6. McG 6 Packaging Industry : India  The Indian market for all types of packaging materials is estimated variedly between Rs. 280 & 300 billion per annum Of this, the consumer packaging market has been estimated at around Rs. 140 billion  Consumer Packaging is highly fragmented, with only a small percentage of companies above Rs.1 billion sales revenue mark  Bulk packaging is primarily in the small scale sector, mainly on account of the Government’s reservation policy for the SSI sector  In the packaging sector, there are very few foreign firms operating in India on a JV basis or as subsidiaries  On the packaging machinery side, while a wide range is manufactured in India, the industry also imports machinery, especially at the high end

7. McG 7 Product Value (Rs. Billion) Flexible Packaging 32.0 Rigid Plastics 28.0 Printed Cartons 24.0 Glass Bottles 16.0 Metal Cans 11.0 Caps & Closures 10.0 Labels 6.0 Others 21.0 Total 148.0 Note : The above excludes bulk packaging, tiny sector and plain films Market for Consumer Packaging : India (2002 - 03)

8. McG 8 Market Share of Packaging Media : 2002 - 03 (by value )

9. McG 9 Indian Packaging - Notable Developments  Metal cans and glass bottles have lost large markets to rigid & flexible plastics and printed monocartons  Flexible packaging has replaced all forms of rigid packaging; the flexible packaging segment has seen many new innovations – the concept of the single use unit pack is now globally acknowledged as a marketing first  Laminate tube has almost entirely replaced the aluminium collapsible tube for toothpaste packaging, now making inroads into the pharmaceutical sector  PET bottles & jars have made a spectacular entry into the Indian market, recording annual growth rates in excess of 20 % per annum; in its wake, the demand for a whole new range of plastic closures has also emerged replacing metal closures PET bottles are used for mineral water, edible oil, carbonated soft drinks and a host of other products

10. McG 10 Metal Cans in India  The market for Metal Cans in India was around Rs. 10.2 Billion in 2001; tinplate accounted for well over 90 % of the market  Tinplate packaging, in India, includes Open Top Sanitary (OTS) cans, 3 -piece General Line cans & seamless cans - all manufactured within the country; Aluminium 2-piece beverage cans as well as limited quantities of OTS cans are imported  The market for metal packaging in India has been nearly stagnant over the past decade owing to the high cost of raw materials and consequent shift to other packaging media  Tinplate is produced in India; large imports take place as domestic production is inadequate  2-piece beverage cans have not yet made an impact

11. McG 11 Tinplate Consumption : India  Estimated consumption of tinplate for OTS, 3- piece and seamless cans was : Year Consumption (000 tonnes) 1985 130 1990 150 1995 155 1997 146 2000 150 2001 143 2002 155  Note : Tinplate for 15 Kg bulk packaging is reported to have accounted for an additional 120,000 tonnes in 2002

12. McG 12 Select Metal Can Manufacturers : India Tinplate (OTS/ GL) Cans  Comet, Silvassa  Hindustan Tin Works, Sahibabad  India Tin Industries, Bangalore  Kaira Can Company, Anand  L & T, Hyderabad (contract mfr.)  Petrox, Mumbai  Shetron Metal, Bangalore  Standard Tin Works, Mumbai  Western Cans, Mumbai  Zenith Tin Works, Mumbai Aerosol Cans  Asian Cans Pvt. Ltd., Mumbai (Tinplate)  Metal Impacts Pvt. Ltd., Bangalore (Aluminium)

13. McG 13 Glass Packaging : India  India has a well developed glass bottle manufacturing industry  Production of glass containers : Year Production (000 tonnes) 1980 320 1985 510 1990 700 1995 730 2000 1100 2001 1170 2002 1220

14. McG 14 Trends in Indian Glass Packaging  Industry growth rate has been around 4 to 5 % per annum  Industry has been under cost pressure in recent years  Profitability has been low historically  Loss of markets to PET containers, cartons, and flexible packaging  Industry has succeeded in making light weight glass bottles, glass bottles of fancy shapes, frosted finish, etc.

15. McG 15 Global Market for PET Containers : by User Segment

16. McG 16 Market for Printed Cartons : India (2002 - 03 ) Total Market : 420,000 Tonnes

17. McG 17 Flexible Packaging Market : Global  The Global market for flexible packaging is estimated at USD 65 Bn.  The US flexible packaging market is valued at USD 20 Bn.  The main end user being food industry at 50 %  Western European flexible packaging industry is valued at around USD 8 Bn.

18. McG 18 Manufacturers Of Lamitubes : India Manufacturer Capacity (Mn. No.) Essel Propack Ltd. (2002-03) 2,800 Sri Rama Multi Tech Ltd. 640 Courtaulds Packaging 120  Essel Propack is the largest lamitube manufacturer in the world

19. McG 19 Caps & Closures : India  The Indian market for Caps & Closures is valued at Rs. 8.5 Billion (2002 - 03)  Industry is characterised by large number of small and medium sized manufacturers and a few large manufacturers like Manaksia Group, L & T, and Oriental Containers  Plastic closures has registered an impressive growth in recent years and is fast substituting metal closures in many applications Innovations in recent years : ROPP:Bulged / embossed caps, pressure holding caps Plastic :Guala caps, pressure holding caps, tamper-evident caps, pourer caps

20. McG 20 Caps & Closures : India Type of closures & applications…... TypeMajor Applications Crown CorkCarbonated Soft Drink (CSD), Fruit Juice, Beer, Ketchup ROPP CapPharmaceutical, Liquor, Processed Foods, Hair Oil, Stationery Lug CapJam, Pickle, Condiment, Cheese Spread, Other Foods Plastic ClosuresCSD, Mineral Water, Lubricants & most products packed in PET, PP, HDPE containers

21. McG 21 Market for Labels : India  The Indian label market for packaging applications is valued at around Rs. 5 billion in 2002 - 03 Including holograms and barcode labels, the market size would be well in excess of Rs. 5.5 Billion  Annual growth is around 15 %  Printed label industry is highly fragmented with a vast number of small printers, spread all over the country; however the label industry in India is nearly on par with its global counterparts  The leaders in the industry are today manufacturing labels that can be compared with the best in terms of graphic design and print quality.  The industry has the capability to print on a wide variety of substrates

22. McG 22 Market for Labels : India (contd.)  In recent years, there has been a shift from simple paper labels to more sophisticated products such as self adhesive labels, shrink sleeves & heat transfer labels  Sophistication within the category of paper labels has also taken place in terms of high quality of printing, use of special varnishes, coating, laminating with films  High end printing machines and pre-press equipment are now visible - multi-station flexo and letterpress machines with stations for screen printing or hotfoil embossing and with in-line die cutting facilities, are now being imported  Barcoding and holograms have recently entered the market, adding to the excitement in the labeling sector

23. McG 23 McG Madras Consultancy Group VI - 2, Habib Complex 3, Durgabai Deshmukh Road R. A. Puram, Chennai 600028, India Tel : 91 (44) 24939161 / 24936321 Fax : 91 (44) 24934862 email : mcg@vsnl.com www.indianindustryprofiles.com www.consultmcg.com Copyright © MadrasConsultancyGroup2004. All rights reserved