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INTERVIEW

“Most people prefer cooking at home so the packaging industry has become very prominent”
Monday, 05 April, 2021, 08 : 00 AM [IST]
HSIL Limited, Packaging Products Division, AGI Glaspac (better known as AGI) established in the year 1972, is engaged in the manufacture of high-quality glass containers to meet the stringent and demanding quality standards for the packaging needs of food, pharmaceuticals, soft drinks, spirits, beer, wine, and other industries.

Today, AGI has positioned itself as one of the leading container glass manufacturer in the country. With two state of the art manufacturing facilities, one in Hyderabad and the other at Bhongir (Telangana) both strategically located in South – Central India, where key raw materials are available in abundance and the shipping of finish goods by road, rail as well as by sea (through ICD) is extremely cost-effective. With Hyderabad and Bhongir facilities put together, AGI melts 1,600 tonne of glass per day.

Rajesh Khosla, president and CEO of AGI Glaspac, shares his insights on impact of packaging sector, future of glass industry and more in a telephonic conversation with Vijetha Iyer. Excerpts:

In the current economic downturn, what kind of impact has been made on the packaging sector? What are the visible trends?
The packaging industry was doing much better during and after the pandemic rather than the other sectors in the economy. Now, people have become hygienic and earlier people were much dependent on outside food so there was a bulk purchases by hotels and restaurants which has now transformed into household purchases wherein people go and pick-up in smaller volumes as per their household requirement. The hygiene sector has become very important. Most of the people prefer cooking at home so the packaging industry has become very prominent and the pandemic did not hit the industry much rather it helped the industry in a better way.
For example, in glass packaging, there has been a good demand in the food segment. The food segment compared to 2019 is doing wonderfully well, liquors and beverages are also doing reasonable well in the overall industry. The demand of glass packaging in food segment, beer segment and liquor segment and in other segments is high these days. The recycling ratio has come down. The older glass which people consume they come back to us for re-melting now people are not disposing it in right way, so our scrap collection has come down drastically. Earlier, it used to be 40 per cent on India basis which has come down to 30 per cent now.

Since 1972, your company has been engaged in the manufacture of high quality glass containers to meet the quality standards for packaging in various sectors. Tell us something about the same.
During 1972, most of the sector was either liquor or soft drink basically. These are the major sectors where glass was used in those times. Today, glass is used in various segments like liquor, beer, food, pharmaceuticals and beverages, etc it is entering into all the areas right now. Since, we are also investing almost 220 crores and there will be furthermore investment and there will be 154 tonnes of clear glass which will cater the special segment of glass packaging where high end packaging material will bemade and supplied to pharmaceuticals, cosmetics, perfume and liquor.

What are the challenges in the packaging sector? What are the visible trends?
The recycle glass is not available. Our customers are not able to forecast their demand as they are not sure about how the economy is going, Covid situation, lockdown, sanitation because of this there was no demand forecast by the customers. Even from supplier’s point of view, transport hurdle was there, the small suppliers were not able to start their factory so supply chain was drastically affected.

What are the tools and techniques used in developing your business?
Glass industry is highly technical and automated industry. With the new IOP business scenario we are not only automating each and every part we are also digitalising the machineries. Optimisation is a new thing which is used drastically and we are also planning to use it widely in all our areas.

As your company is into various sectors, can you tell which sector are you more focussed on?
We are more focused into beer, food and pharmaceutical segments. We are importing raw materials and lot of equipments, machineries to produce good quality products. We are also exporting food grade packaging material and pharmaceutical packaging material in various part of the world. We supply to USA, Africa and other places.

The company has announced geographical expansion with an estimated investment of Rs 700 crore in the eastern part of India. Elaborate.
The project is on hold for some time due to the pandemic. We may start this in early 2021. The project is about glass containers in eastern part of India.

How are you ensuring safety of your products in the two state-of-the-art facilities?
We have automatic inspection machines; we have stringent parameters so we are ensuring safety of our products. We have all the certifications and factory norms are being taken care. We are also being audited socially, it happens every year by top agencies and inspected by top customers by Nestle and other companies to see if we are following all the norms or not.

What is the future of glass manufacturing in India?
Right now, in India, the consumption of glass manufacturing is poor. We are 5-6 times lower than China.

What are the problems faced in terms of import/ export of raw materials?
Transportation and shipping challenges were there. Now, things are getting to normal.
 
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