Food processing is the largest market for packaging machinery industry. It is predicted that it will account for 43 % of global product sales in 2012.
If the above prediction holds true, India's packaging machinery manufacturers would be treated with a double bonanza. India is just the right market for players of packaging machinery manufacturers.
Food processing and pharmaceutical industries, the biggest drivers for packaging, are on growth trajectory. The organised retail market is growing and the government is also contemplating to permit FDI in multi brand retail. The growing middle class population, rising health consciousness, competition from the west, are all the boosters for packaging and packaging machinery industry in the country.
The current value of the market of the world packaging machinery is around $30.9 billion. Top countries producing packaging machinery are Germany (23%), Italy, (16%), Japan (11%), USA (10%) and China (6%), according to VDMA estimates.
Where producing machinery is concerned India is producing the basic machinery, however the growing population is creating a demand for sophisticated state-of-the-art technology. India lacks in the production of high-end sophisticated technology.
“One reason for India's inability to produce advanced technology is that the investments are not taking place, “ says a packaging machine manufacturer.
However, the increasing investments by both domestic and foreign companies in the Indian food processing sector, especially in beverages, dairy products, processed food, edible oil, and marine products have expanded the market for packaging machinery. India processes only 2% of its food produce, that explains the scope for packaging.
One good news for the packaging machinery industry came with the standardisation of excise duties. The excise duty has been reduced from 24% to 16%.
With growing awareness Asia, particularly India, is accepting the idea of instant cooking and thus opened the trade gates for the packaged food industry in the country. Time limited consumer (TLC) is the driving factor for the growth of packaged RTE and OTG products in India.
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The total trade volume of packaged food in Asia in 2009 was around 132 million tonnes. China led the market with a share of around 50 million tonnes, followed by Japan (22 million tonnes) and India (18 million tonnes). India is estimated to reach 25 million tonnes by 2014.
In India's packaged food segment, dairy led the market with a share of around 11.2 million tonnes. It was followed by bakery products (3.5 million tonnes), oils and fats (1.5 million tonnes), dried processed food (0.7 million tonnes) and confectionery ( 0.2 million tonnes). Packaged dairy industry is expected to reach 15.6 million tonnes by 2014, whereas bakery will touch 4.2 million tonnes by 2014. Likewise oils and fats will contribute 2 million tonnes, dried processed food 1.2 million tonnes and confectionery 0.4 million tonnes by 2014.
The main function of packaging is to protect a product, give it a visual appeal, provide hygiene and preserve it during seasonal variations.
From a consumer point of view ease of handling and decomposability are the qualities that make a good package. Accordingly packages are developed and delivered.
Packaging machinery industry in India is labour intensive supported with weak infrastructure. Thus automation with advanced technology is the need of the hour. In product manufacturing, packaging costs around 45% of the total expenditure.
To understand the packaging machinery industry it is important to know that the industry is divided among small players with local presence, medium players and large players. The industry comprises large number of manufacturers of basic materials, converted packages, machinery and ancillary materials.
The unorganised sector provides tremendous opportunities for the packaging machine manufacturers, the need is to work on the cost factor for this market. The organised sector which forms the major supplier to food and pharma companies and score high on quality and hygiene is another big market for machine manufacturers.
Packaging machines like automatic form-filling and sealing machines, Tetra Pak's aseptic packaging machines for sterilised filling and packing of liquids, and testing instruments offer best prospects for the machine manufacturers. Manufacturers of machine can also look at equipment for manufacturing aluminum beverage cans, machinery for cleaning and drying containers; automatic high speed labeling machines and capping machines; sealing machines for cans, boxes, and other containers; machinery for filling, and closing bottles and cans; packing/wrapping machines; and moulding machines which provide immense opportunities.
Some leading companies in the packaging machinery industry are Nichrome India Limited, Multi Pack Machines Pvt Ltd, Hassia Packaging, Heat and Control (South Asia) Pvt. Ltd, Bosch packaging Technology, Ishida India Pvt.Ltd., Larsen & Toubro and S P Ultraflex Systems
In India, rigid packaging has been the mantra for packaging but the trends are shifting towards flexible. Rigid packaging with a share of 80% rules the roost. Rigid packaging is the conventional form of packaging constituting glass bottles, metal cans, corrugated boxes aerosol cans, battery cell cans.
With the gradually growing automation, India's corrugated packaging segment has witnessed a significant evolution in recent years. India has around 4,000 corrugated board and sheet plants spread across the country and it employs around 5 lakh people.
Though on an average around 2 million tonnes of kraft paper is converted into corrugated boxes, however overcapacity, manual operations and low productivity have restricted the prices of corrugated sheet and converted boxes. Also transportation and high freight costs have added to the woes.
Therefore, the small-medium sized corrugated plants are often located within the proximity to consumers..
Flexible packaging is an industry which is fast gaining acceptance in India. Plastic for example being cheaper and easy to handle, is being preferred by the manufacturers over corrugated boxes and tins. Flexible packaging consists of multi-layered laminated sheets of single or combination of substrates like plastic, paper or aluminium.
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