Liz Gyekye / PackagingNews

India poised for “gargantuan” flexible pack growth

India represents 5% of the world’s flexible packaging market and is poised for “gargantuan” growth, according to new research.

The new report is by PCI Films Consulting and is called The Indian Flexible Packaging Market 2011.

The report states that India represents a US$ 3bn market that is expected to continue growing at around 15% a year until 2015.

However, researchers warn that businesses and investors need to understand the business environment before they can expect to be successful in India.

According to PCI, India is a “land of opportunity” in flexible packaging and is poised for gargantuan growth.

‘Purchasing power’

The report suggests that Indian consumers have the “purchasing power to match their counterparts in the West, and the Indian retail sector is rushing to satisfy them”. It added: “India is poised for huge growth within the retail sector, as well-developed, major retailing expands within Indian cities.

“With only 5% of food currently packaged, and Wal-Mart only last year allowed to move into retail, the opportunities in flexible packaging are clearly enormous. Added to that are large, mostly coastal, government-supported food manufacturers manufacturing cash crops for export throughout Asia and beyond.”

Two-tiered

The report claims that the Indian converting industry is distinctly two-tiered: serving the major food producers are “very well” developed converters producing European standard flexible packaging with German and Italian equipment.

Outside the main centres, there is a less organised market, with a large number of small converters producing flexible packaging of generally lower quality, according to the report.

According to the study, “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 recognising the high quality available from the major contractors.

‘Challenging political landscape’

The report concluded: “Many commentators have expressed the view that the Indian flexible packaging market will develop on the same lines as the Chinese. As the report demonstrates, however, the dynamics of the two territories are completely different.

“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, while it may well be time to ‘dip a toe’ in the Indian market, there are still substantial hurdles to clear.”

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