Let’s begin with a question. When was the last time you did not have any packaging material in your house? We’re talking bubble wraps, corrugated boxes, and the like.
Yes, there’s no escaping packaging and even if you decide to get rid of all, there’s always something that is in transit for delivery every now and then.
Higher disposable incomes and the pandemic has catapulted several businesses such as FMCG, pharmaceuticals, hospitals, and e-commerce in the past decade or so. Thanks to the growth in these businesses in India, the local packaging industry is in top gear.
Picture this: India’s packaging industry had a market value of USD70 billion in FY20. This is expected to triple over the next five years, reaching USD205 billion by 2025. That is a CAGR of 25%-27% between 2020 and 2025. Packaging companies in India have quickly become fund managers’ and retail investors’ most sought-after companies. We’ll get to that in a bit, but how does the industry stand amid the growing demand and expectations?
It has become the fifth largest sector in the Indian economy and considered to be one of the fastest growing.
Besides the numbers, there’s this business sense that good packaging brings with it. It controls the first impression on the customer whilst purchasing a product.
Amid cluttered shelves, products that stand out owing to their distinctive packaging directly influence consumer’s choice in a competitive market.
From paperboards and plastic bags to customised wrappers and labels to containers, the growth story of the Indian packaging industry has been that of innovation and adaptability.
Out of the box
Polyplex Corporation, UFlex Limited and Ester Industries, all in the business of packaging, are some of the fastest growing companies in the Indian market.
Polyplex Corporation, a small-cap company, has seen its stock price go up by 250% over the last one year. The company has the seventh largest capacity of polyester film or PET (Polyethylene Terephthalate) films globally. PET films are used for packaging, an area that is growing at a very fast rate.
Last year, UFlex and Ester Industries stocks moved up by 89% and 42% at INR689 and INR170, respectively.
Again, the primary reason behind these companies’ growth is orders from e-commerce firms.
On the other hand, for e-commerce businesses, packaging has become crucial not only because it needs to be attractive, but it also needs to be robust to be carried through various delivery points before its final destination.
The packaging industry has made steady progress not only in terms of profitability, but it is now catering to diversified industries, besides e-commerce, which was not so conscious of packaging strategies earlier.
This brings us to packaging material and its sturdiness.
Besides protecting packaged goods from any kind of damages, breakage, tampering, leakage during the supply chain; robust packaging makes handling and transportation easier too.
Packaging material segments
Depending on the type of material used to make the package, the industry can be classified under the four segments - paper, glass, metal and plastic.
Read More at https://economictimes.indiatimes.com/prime/economy-and-policy/indias-packaging-industry-is-unboxing-double-digit-growth-key-protagonists-e-commerce-and-you-/primearticleshow/90989042.cms