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Prospects in Indian flexible packaging sector

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The report also lists the leading converters in the country: Uflex (capacity of 60 kilotonnes), Paper Products (capacity of 32 kilotonnes), Positive Packaging (capacity of 28 kilotonnes), ITC (capacity of 22 kilotonnes) and Parle Products (capacity of 24 kilotonnes).

Based on interviews conducted with Indian packaging converters and processors, between March and July 2011, the report, titled "The Indian Flexible Packaging Market 2011", says that opportunities are available in the market but that businesses and investors "need to understand the business environment before they can expect to be successful."

PCI also says that the growth of the industry is driven by the rapid growth of the country's middle classes and their purchasing power. To date, only 5% of food sold in India is packaged, with purchasers still resorting to buying fresh produce from markets. However, change is expected to occur rapidly.

The report highlights the two-tier concept of the Indian packaging converting industry. The first tier serves major food producers who are converters producing European-standard flexible packaging with equipment sourced from German and Italian equipment manufacturers. The other tier is made up of a large number of small converters producing lower quality flexible packaging.

Even so, international packaging companies are not prevalent in the country with only Huhtamaki being a major player. But PCI also says that India has been exporting its converted flexible packaging and this business is growing.

Compared to China, India's flexible packaging market is at the beck and call of the country's bureaucratic and challenging political landscape, an increasing focus on environmental issues and the presence of established players (sometimes owned by the very manufacturers they supply). Hence, PCI says, even though the potential is huge, "there are still substantial hurdles to clear."