Indian flexible packaging market to grow to US$5.2bn by 2015

The Indian flexible packaging market will grow to more than US$5 billion by 2015 and represents a ‘land of opportunity’, according to a new study by flexible packaging materials consultancy PCI Films.
 
PCI’s Indian Flexible Packaging Market 2011 reports the market is currently worth US$3 billion and is expected to grow at a rate of 15 per cent until 2015.  However, it also notes that businesses and investors need to educate themselves on the Indian market to understand andcapitalizeon the opportunities.
 
According to the market study, opportunities arise from India’s retail sector working to meet the demands of the country’s middle class consumers, a demographic the same size as in Europe and with comparable purchasing power.  In addition, only five per cent of food in India is packaged and there are a number of government-supported food manufacturers on the coast exporting cash crops throughout Asia and beyond.
 
But, a 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, means that there are still substantial hurdles to clear to enter the Indian market.
 
The report adds that the Indian converting industry is distinctly two-tiered.  It serves major food producers that are very well developed converters producing European standard flexible packaging with German and Italian equipment.  Outside the main centers, there is a less organized market, with a large number of small converters producing flexible packaging of generally lower quality.  International groups are almost missing, with Huhtamaki the only substantial player.
 
Indian export trade in converted flexible packaging has been growing, with long-run customers across Africa, the Middle East, USA, Asia and Europe recognizing the high quality available from the major contractors.
 
Some of the end uses are rather unfamiliar to Western converters too.  By some estimates, for example, 25 per cent of all laminate sales are accounted for by small sachets of chewing tobacco, although they are the subject of Indian government legislation to combat litter.  Pack sizes are generally smaller to match consumer purchasing power.