Interview with Bharat Kedia, President, EICMA

Media Release: 6th July 2013

bharat kedia

In conversation with Bharat Kedia, President, Eastern India Corrugated Box Manufacturers’ Association on the prominent growth of the sector and the continuous shift from manual to semi-automatic to automatic machinery

What state is the current Indian Carton Box making Industry in?

The Indian corrugated box industry comprises a blend of numerous small and medium independent players located in metropolitan centres, cities in nearby industrial zones and large players with world-class automated plant and machineries designed specifically to meet the growing needs of multinational corporations and domestic retail giants. The industry has been generally run as a family owned business model started by first generation entrepreneurs in the Micro & Small Organised sector; now emerging into organised & professionally run structure.

The demand for consumer goods in India is self generated by the growing population of the country. As people are becoming more health conscious, there is a growing trend towards well packed branded products rather than loose and un-packaged formats. India being a growing country, the purchasing power of Indian Consumer is lower; the consumer products come in various affordable flexible primary packaging, leading to requirement of different pack sizes. There has been a change in the life style & food habits, people are now trying newer cuisines, leading to a demand for variety of packaged food. There has been a great focus on marketing of consumers goods in rural India. In the last decade there has been a significant increase in consumption of boxes in the processed food, fruit & vegetables, pharmaceuticals and electronic industry. The demand for goods & with the proposed introduction of FDI in retail, the prospects of quality packaging with emphasise on printing graphics are bound to grow at a stupendous pace.

Taking cues, industry players have started deploying more profitable automatic box and board plants to cater to the needs of large retailers demanding bulk packaging with quality consistency. The Indian corrugated box market is expected to grow at around 15% in the coming years.

With the introduction of fully automatic machines in the country, how has it helped the Indian corrugators?
correxpo

The Indian corrugated box industry, which initially was completely unorganized, comprising thousands of small players, has taken a U-turn with many new automatic lines turning up. Several high-end machines have been installed in the country in the past few years.

The automatic machineries are not only fully mechanized with least manpower involvement but also have much higher speed of production and are capable of multi-color printing. Unlike manually stapled boxes, the automatic self glued-pasted boxes possess more strength and higher cushion compression to mitigate damages. These unmatched qualities give advantage to automatic box manufacturers over manual/ semi-automatic ones. The technology transition from manual/semi-automatic to automatic box production is backed by huge demand from organized retail sector for which quality consistency and bulk supply is critical. Identifying huge potential, many large players have laid production lines and packaging warehouses across multiple locations such as SEZ offering bulk demand. The industry is now able to cater to the world-class packaging requirements of the exporters.

Hence, the automatic machines have given the Corrugation Industry, capacities to feed the huge demands, increased the per man productivity output in the perspective of dwindling labour force of skilled & semi – skilled people, maintaining specified quality parameters & optimum usage of resources by achieving economies of scale.

How long will India market take to adapt to fully automatic technologies and machineries?

The shift from semi – automatic plants to state-of-the art plants is rapidly increasing. The existing industry stake holders are migrating towards automation either by choice to remain competitive & grow or on the insistence of their customers. Today, every other player is at least contemplating of up grading technology.  The adaption to fully automatic technologies will be gradual, if not brisk.

However, there are many small, unorganized, widely scattered consumers, jointly accounting for a huge consumption. This segment can be fed by Semi Auto Plants with minimal role of Automatic Players.  Reasonable Margin to justifying the investments & small run due to lack of bulk single size order still a deep concern for many Automatic Plant owners.

We can draw parallels with the growth of the box industry in China, which stated importing corrugated boards from Japan about 55 years ago, the first automatic plant was imported from Japan in 1971, emerged as a fragmented industry as in India with 40,000 Units spread across China. Since 1990-91 there has been a major shift to automatic plants in China.

The Corrugation Industry in the sub continent is passing through the same phase; automation is very much on the anvil; sooner than later, by when, your guess is as good as mine.

eicmaWhat are the contributions and achievements of EICMA in last 5 years?

EICBMA (www.eicbma.com) is a regional association representing units in the Eastern part of the country; such 12 regional associations from different parts fall under the parent body, Federation of Box Manufacturers of India (FCBM), having its registered office at Mumbai, India.

FCBM has been instrumental in show casing the emerging technologies in its annual conference & exhibition hosted by regional associations in different cities. In the technical sessions at the conferences, eminent speakers elucidate the advancement in know-how for the industry, the exhibition givens an opportunity to the members to interact closely with the machine & raw material vendors from across the globe. The Federation has organised several business delegations to different countries to attend packaging exhibitions. Regional Associations also offer certificate courses in automation & semi-automation to provide the industry with the personnel required.

We have conducted seminars with farmers, government officials & traders for the development of a new market for packaging of fresh fruits & vegetables. Recently, a highly successful trial packaging of tomatoes in Corrugated Boxes has been conducted in Eastern India. The long term benefits of huge demands from this sector are bound to percolate on a pan India basis, pushing the demand for Corrugated Boxes.

We have been closely working with the state & union governments & have been able to achieve desirable rate of Central Excise Duty, VAT Rates and abolition of Entry Tax on Kraft Paper in a state, all of which have implications on the cost of the boxes. We are also pursuing the Finance Ministry on reduction of Import Duty to make imports of Raw Materials, Plants & Machinery cheaper.

The Federation & Regional Associations are equipped with the latest testing machines for Research & Development to test the quality parameters of Paper, Board, Corrugated Board & Boxes and develop boxes with optimum specifications for new products & sectors. The Federation has several publications technical booklets & studies relevant to the Corrugation Industry.

How do you think forums like IndiaCorr Expo and India Corrugation Summit going to help industry professionals get together and understand market needs for changing times ahead?

Eyeing the tremendous opportunity, huge investments are being made by the corrugated box manufacturers by embracing latest technology-based Automatic Board Plants with the sole objective of upgrading quality close to the international levels. Forums like IndiaCorr Expo (www.IndiaCorrExpo.com) can work with players as a “growth partner” to assist them in multiple ways, by displaying & discussing the global technology available in board plant as well as post board operations & graphic options, by feasibility study of up gradation of establishing plants, customizing & suggesting the right automatic plant to suit the corrugators production capacity & consumer end requirement.

The Expo provides a platform by organising the event in India itself, to enable the corrugation professionals & owners to interact with the leading plant manufacturers’ on a one to one basis, witness the live display of machines and make the correct choice of a plant & machinery best suited for them along with commercials.

For media queries, please contact Siddharth Narain | +91 9971600355 | siddharth(dot)narain(at)reedmanch(dot)com

 

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