FNB News - “Value of packaging industry is `70,000 crore”

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INTERVIEW

“Value of packaging industry is `70,000 crore”

Monday, 28 July, 2014, 08 : 00 AM [IST]

The food processing sector probably is exclusive in respect of using the most varieties and forms of packaging and packaging machinery. In an email interaction with Libin Chacko Kurian, P V Narayanan, secretary-general, Institute of Packaging Machinery Manufacturers of India, spoke about the packaging industry in India and emerging trends. Excerpts:

What is the current value and growth of the packaging industry in India compared to the world?
The value of the packaging industry is estimated at Rs 70,000 crore. This however is very low compared to the global industry value placed at around US$600 billion. Of this, 20% is accounted by Asia region with Japan and China in the lead. The per capita consumption by spend is only one seventh of the world average clearly indicating the potential for the growth and opportunities for the packaging industries in the country.

What is the potential of packaging industry in India with respect to the food processing sector?
As it is true of the situation in most countries, around 50% of the total packaging production is consumed by the food sector. The food sector probably is exclusive in respect of using the most varieties of package types and forms including machineries.

Does India rely on other countries for its food packaging needs?
The food sector primarily caters to the domestic resources of packaging materials/packages. Whereas they also source specific technologies and packaging machinery and system for higher ends and exclusive needs.

What are the recent developments in the food packaging industry of India?
The industry has witnessed considerable new trends moving from simple pre-packaging to vacuum packaging, gas flush packaging, CAP/MAP (Modified-Atmosphere Packaging / Controlled-Atmosphere Packaging), smart and intelligent packaging, retort and asceptic systems, barcoding and RFID (Radio-Frequency Identification) and various types of collation and unitisation are specific areas of interest.

What are the operations and challenges involved in food packaging?
Food packaging lines vary considerably depending on the product state, quantities required, variations in the product characteristics etc. The retail and consumer end needs like dosages and conveniences also play a role. FFS (form fill seal)-vertical and horizontal, thermoform-fill and seal, lined carton system, stand up and spouted pouches, flow wraps are typical in this industry.

What are the types of packaging formats used for various food products?
The varieties of packages vary from simple PP (polypropylene) bags to high barrier packages and asceptic packages. Single layer polyolefin bags to pouches, 2-5 /7 layer flexible laminates, 2-9 layer multilayer films, thermoforms from PS (polystyrene), PVC (polyvinyl chloride), PET (polyethylene terephthalate), PP, PE (polyethylene)and co-extruded structures besides semi-rigid and rigid metal, glow, plastic formats are very common types of packages used by the food sector. These primary packaging media are supplemented by a group of ancillaries like labels, caps and closures, wads, and reinforcements. Developments in these areas are indeed very commendable like dosage caps, smart labels, security/tamper identification labels, coding and marking systems, child-resistant and elder-friendly caps.

How balancing of innovations and risks are important in the packaging industry with examples?
Innovations within the industry and value-added packages are specific areas where possibly the packaging industry has tremendous scope. Responsibility lies both between the package buyers and package suppliers. No doubt this is cost-oriented but soon will become an entity if the industry has to become more and more competitive. India being identified as a good source for development and supply has therefore necessarily to acquire the infrastructure and buildup as a good and dependable source of recognition, globally.

What are the challenges faced by manufacturers of food packaging?
Both package conversion and packaging operations are considered reasonably developed. The existing level, however, need to be constantly updated towards higher technology levels. Opportunities are open for improvements and new material and material combinations with higher functionality. It is equally true of the machinery sector in terms of versatility, ergonomics, eco-friendliness, reduced turnover time, pollution-free, easy changeover and multi-product oriented.

How food packaging plays a role in safety and health standards of food materials?
Food needs to be safe and nutritious. More scope exists and innovation opportunities are higher in packaging possibilities. Consider the global scene - the one point agenda is to save food and reduce losses and make food available to all irrespective of season, location and at uniform price. The FAO/UN (Food and Agriculture Organisation/United Nations) has estimated that about 1.3 billion tonne of food is wasted. Poverty alleviation and removal of famine is only possible if such waste is curtailed. The common enemy seems to be “mindset,” lack of education or importantly poor understanding of the benefits or inadequate convincing and persuasion.

Comment on how flexibility factor will change the future of food packaging industry.
Primarily the laws and regulations should be clear and this yardstick can have no tolerances. Standards and specifications should be drawn up both in respect of materials and process and details should appear on the packages. If the system needs to be effective monitoring at the manufacturing / processing sites may not be enough. Market samples should be drawn and quality inspection should be done. Any malpractices or shortcomings or deviations should be dealt with expeditiously with stringent punishments. This cannot be a mere fear complex but an effective baton.

What are the issues about which manufacturers of food packaging have to be cautious?
Primary issues related to package manufacturing are raw material quality, process of manufacturing site conditions, machinery and system, quality of output and their conformity to requisite standards and specification complying to statutory and other stipulations.

How Automatic Identification and Data Capture (AIDC) is important for the packaging industry from a consumer point of view?
Consumer safety, health and hygiene being the core of food, food processing and packaging all data right from procurement, in-site manufacturing and supply chain are extremely important and essential. Coding and marking-barcodes/RFID and AIDC are helpful tools in this direction.

With new food mix and products emerging, what is your message for manufacturers and traders involved in the industry?
Product mix - in-depth and width will have to expand. Substitutes and alternates and modifications are part of the game. They will continue to be on the anvil all the time. RTE (ready-to-eat), RTC (ready-to-cook), RTP foods are typical examples. This is irrespective of the food sector - meat and meat products, dairy, flour-based foods etc.

There can be no single answer for packaging needs of these. Also a given package cannot be the answer for all foods and all market conditions. Each product needs to be treated on its own merit considering its characteristics, shelf life, supply chain conditions. It also should be noted that “a package” is a good vehicle and guardian. It will keep the product as it is processed and packed, and therefore ”what is put inside” and “at what conditions” are equally important.

What are the new trends in raw materials used for packaging and how eco-friendly are they?
Lot of discussions are seen in respect of bio-friendly packages. They are debated under different heads. Commercialisation always is governed by availability and cost. These probably are the constraints. Possibly more inputs are needed. Polymeric and coatings( barrier) will find more applications.

What are the challenges and responsibilities in front of the new government to help the packaging industry?
The packaging industry has been under various constraints which affect its expansion and growth. Most of the converting sector were under the reserved category. The shift in early 1990s clearly paved the way for their expansion and modernisation and over the last and half decade one could witness the sea change. The trend set in will continue. The country still processes a very low percentage (less than 5) of the fresh produce. The scope is indeed very large and would have large influence on the packaging sector. With the retail sector growing at a reasonable pace and shelf- ready packages becoming more popular / necessity the demand for packaging will also increase in a good pace. Although the changing lifestyle, small families, more working women, demand for more and more convenience packages have shown a direct impact on the packaging needs, the cost inputs for packages in a packaged food does not seem to encourage large-scale shift, yet. Having identified “food processing” as a priority sector and a large number of financially-assisted programmes put in place by the government, the momentum needs to be augmented.

The foregoing could throw up quite a few measures-industrial and fiscal that the government could review:

Encourage processing and packaging centres at the orchards level.
Create a part of above as exclusive export oriented.
Provide financial assistance for setting up state-of-art processing and packaging centres and review fiscal aspects.
Create and enlarge the cold chain supply systems.
Set up quality assist centres at processing & packaging centres with emphasis for those at orchard levels.
Review the contribution of cost of package to the final product selling price and the part of the duties and levies.
Given the current situation and needs - review the fiscal levies to reduce its impact on the final product pricing to increase volume of processed food packaging.
Encourage developments in source reduction and make packages more eco-friendly.
Encourage easily recyclable and reusable packages.
Introduce and expand returnable packages (deposit scheme).
Fiscal incentives for those falling under the above schemes.
Can the fiscal support include tax holiday system with built-in conditional aspect on steadily increasing volume of packaged foods.
Encourage R&D / Innovation in packaging and extend financial support for those bringing in advantages for the consumers adopting state-of-art technologies and materials.
Consider special incentives for SME (small and medium enterprises) sector in the above areas.

The underlying principle and aim should be “food safety,” food preservation and packaging best suited for tropical countries and those with higher storage and distribution cost. Such developments in all types of packaging – across the cross-section - will add to the choice to meet varying market segments. Packaging food more securely with high productivity and extended shelf life are the technology endeavours today.