Huhtamaki Paper Products has acquired the Indian operations of Ajanta Packaging at an enterprise valuation of 1003 million INR ($16 million USD), on a cash-free, debt free basis. This includes Ajanta’s two plants in India, in Baddi (north India) and Daman (west India).
The Indian multinational label printing company, run by Chandan Khanna, has a total of five plants including two each in India and the Middle East, and one in Southeast Asia. Khanna will continue to run independently the company’s plants in other countries while helping Huhtamaki in India for its operations in that country.
The flagship unit of Ajanta Packaging in Baddi houses two MPS and two Nilpeter presses as well as an Iwasaki intermittent offset press alongside finishing equipment from Grafotronic and Prati. The factory in Daman houses similar machines.
The Indian business of the company grew by about 10 percent in 2017-18 fiscal. ‘We maintained a healthy growth of our company by bringing in more efficiencies, improving our production and getting better systems in place,’ Khanna says. ‘Though the prices are gradually going down, Ajanta Packaging continues to enjoy good business in the country as the focus is on high quality, impeccable service and best production plants with good manufacturing practices.’
Ajanta Packaging started business in Daman in 2000 with an Iwasaki waterless offset label press and opened its second plant in Baddi in 2006, gradually growing its footprint in India. With the dream of making it India’s first multinational label printing company, Khanna started the first plant outside the country in Sharjah, United Arab Emirates, in 2008, which was then followed by another unit UAE in 2012 and then in Thailand in 2014.
Ajanta Packaging prints PS, wet-glue and in-mold labels at its Thailand plant and plans to start printing shrink sleeves soon. This unit now employs 45 people.
It houses one 6-color Iwasaki intermittent offset press, a 7-color Nilpeter MO offset press and a new 11-color Nilpeter FB330S flexo press with a gravure unit installed in 2017. Alongside it also runs an in-mold label die-cutting machine from Iwasaki and two Grafotronic slitting and inspection machines, as well as a hot foil stamping unit from SPGPrints.
‘Though Ajanta Packaging excels in printing labels for FMCG, home and personal care segments, we are catering to a wider segment of industries in this market,’ says Khanna.
‘Thailand is a mature market and still growing, but it is also challenging to do business here because we compete with not only good local Thai players but also many multinational companies operating in the market. One needs to have good infrastructure and high quality to be able to succeed.
‘It is tough to get low hanging fruit, so we are focusing on innovative labels that cannot be printed by many converters in the region. We are now enjoying good growth here and are excited about our Thai venture as we are catering to new segments and have been accepted as an innovative company. Our quality and innovation capabilities are appreciated in the market, and our turnaround time is one of the best.’
Indicating consumer habits in Thailand that makes the country a lucrative market, Khanna explains that consumers like to have packaged goods because they are mostly working couples who don’t cook at home. ‘As a result, a lot of packaged food is sold in the market. Packaged food is also exported from Thailand to neighboring countries including Singapore, Vietnam, Malaysia and Indonesia.
‘In addition, big multinationals such as Proctor & Gamble and Hindustan Unilever, among others, have production centers here to cater to the entire Southeast Asian region. These companies manufacture popular products such as shampoo and conditioners, which are exported to different countries in the region. Personal care is a huge and growing segment in Thailand.
‘Another interesting segment is that of small and medium enterprises that manufacture goods with locally produced products. For instance, if coconuts are grown in an area, then local manufacturers are encouraged by the Thai government to use coconuts to make a variety of products that can be sold in the market. The quantity of these product is small but the variants are many. These products are packaged and labeled before they are sold in the local market. Therefore, Thailand is a mature market and label industry here is big and growing.’
Another venture growing steadily is the factory in Sharjah, United Arab Emirates, which houses six Iwasaki presses and a Nilpeter FB3300S flexo press. The company prints pressure-sensitive, wet-glue and in-mold labels at this site. It has also recently started printing shrink sleeves in Sharjah, to offer its customers a wider range of services, but is not directly competing in the segment.
Clocking a turnover of 175 crore INR ($26 million USD) in 2016-17 fiscal, the Ajanta Packaging Group was growing at 10 to 15 percent year-on-year. The business in Thailand, starting from a small base, grew 20 percent in 2017, and the Sharjah operation grows by five percent a year. Khanna expects all his plants to eventually grow at a steady 10 percent. Following the acquisition, Ajanta Packaging International is investing in a new venture in Egypt in 2018-19, and expansion of its operations in Southeast Asia is also on the horizon.