Potential of Packaging Industry in India- Opportunities and Challenges

The packaging Industry is taking giant leaps on the growth front along with the the Indian Economy. As overall growth is dependent on increased industrial production and international trade, demands on packaging converters have become more intense and sophisticated.

Increased penetration of organised retail in India as well as increasing preference for branded products has greatly increased the demand for flexible packaging solutions, which has led to advent of machines and advanced technologies for printing and converting packaging materials for the Flexible Packaging Industry to meet the rising requirement.

The Indian Label Industry has evolved greatly and has now acquired global outlook. It is now growing at a rate of more than 15% with several press manufacturers and label converters gearing up to challenges.

There are close to 5,000 box plants scattered throughout the subcontinent in classic developing-country industry fashion, mostly fragmented and family-owned.

So how does the country meet this ever increasing demand?

The larger Indian converters have been adopting the latest technologies and have installed several high-end machines to keep up with the development rate of the country. These machines are largely imported from the western countries, with Germany and Italy accounting for almost 45% of the total packaging machinery imports.

However, as the need to upgrade is felt by the smaller converters and corrugators as well and many commercial printers diversify into package printing, there is an increasing focus on machines made in Taiwan, Korea and also China because of their affordability and quality. These cheaper alternatives have boosted the modernization in packaging sector at unprecedented rates.

Domestic Machinery Manufacturers are not far behind in this race and have also geared up and are today making machines that are lapped up by the growing industry in India. Some of these machinery manufacturers are also making inroads in the export markets and are moving beyond the traditional Asian neighbours and the countries in the Gulf to South Africa, East Europe and even South America, thus opening new growth avenues.

However, the present per capita consumption of packaging in the country is dramatically lower than the global averages. All the pointers indicate that the packaging industry is set to move to a higher level of growth between 20-25% from the present level of around 12-15 percent.

The packaging converting sector is growing at 15-18% and there is a marked shift from the unorganised segment becoming more organised. The industrial growth in India has seen top players in the A and B tier segments reap high benefits. More importantly, this growth has acted as a catalyst for the aspirations of the C and D tier packagers who are making a concerted effort to move from unorganised to organised operations; from manual to automation.

This has led to greater demand for converting machines. The potential of growth is much larger and unrealized.

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