Cosmo Films recently announced its plans of expanding the capacity of its BOPP film manufacturing capacity by over 40 per cent by installing a modern line at its Karjan plant in Gujarat. We have Pankaj Poddar, in this exclusive exchange with Projectmonitor, discussing the rationale of this capacity expansion. He also throws light on the factors that have led to a buoyant BOPP film industry in India.
Tell us about the new 10.4m BOPP line that Cosmo Films intends to install at the Karjan plant in Gujarat.
BOPP (bi-axially oriented polypropylene) films are fast becoming an important part of the laminate structure of products. This is because most of the flexible packaging options used for food today are film laminate based. Keeping in mind the future demand for BOPP films, Cosmo Films has decided to install a new 10.4 mtr BOPP production line by early 2017. This new BOPP line has already been ordered and is expected to increase the company’s annual BOPP production capacity from 140,000 to 200,000 tonnes per annum (tpa).
This new production line will be installed at the Karjan plant site near Vadodara, an existing facility with the company which already houses BOPP lines, extrusion coating and chemical coating lines, and a metallizer. The new line will prove to become the most advanced line available in the market today in terms of its width and output. This high speed line equipped with automated changeovers will lead to an increase in power savings thus maximising overall operational efficiencies.
Where has the machinery been sourced from?
The machinery to be installed at the Karjan site is the Bruckner line and it has been sourced from Germany.
What is the estimated outlay of the Karjan plant expansion project?
It is an estimated Rs.200 crore.
What was the rationale in expanding the Karjan plant capacity?
BOPP film is one of the most popular raw materials used by the flexible packaging industry all over the world. Moreover, the growth in demand for this film has been substantial in both developed as well as emerging markets due to its recyclable nature and applicability in various of non- food and food products. BOPP films are used in array of flexible packaging, pressure sensitive tapes, labels as well as lamination applications.
The annual global demand for BOPP films is around 7 million tonnes and in India it is around 0.4 million tonnes. Flexible packaging is expected to grow by 15 per cent per annum will continue to drive the growth of the BOPP industry. Estimates suggest that BOPP consumption growth will be in the same range in the short to medium term.
Moreover, India continues to have lower per capita consumption of BOPP films as compared to other countries. In addition, there is also an opportunity to supply to international players that are looking to source their packaging requirements from cost efficient locations. Added to that the Karjan area in Gujarat, in particular, provides good infrastructural and developmental opportunities for companies to expand their base.
We understand that China has built huge BOPP capacity, which is far in excess of local demand. With the recessionary trends now being witnessed in China, do you anticipate higher imports from that country into India?
Importing BOPP films from China is not a feasible alternative for multiple reasons. Some of the challenges associated with importing from China are:
- It’s not very easy to import these films into India due to operational, transport and policy issues
- The film that is imported then has to be cut to size which increases over head costs
- The film is more expensive than the variants that are produced in India
- There is always an inherent risk in importing such films
What is currently the total BOPP capacity of Cosmo Films coming from domestic and overseas plants?
Cosmo Films has two BOPP film production facilities in Aurangabad, Maharasthra; one in the Karjan, Gujarat and one each in USA and Korea. The annual capacity of BOPP film production is around 140,000 tonnes.
How much of your company’s output is exported? What are the major export destinations?
Cosmo Films manufactures a number of BOPP films which enjoy a great popularity in the Indian as well as international packaging and commodity sectors. We are a proud supplier of choice to some of the world’s most discerning customers in the packaging, labeling and thermal lamination industry. With almost 50 per cent of the demand for our products originating from customers (coverters/printers) abroad, our customer base is extended to more than 90 countries all over the world.
What the major growth drivers for the BOPP film industry in India?
Multiple factors have led to rise in the demand for BOPP films over the years. Some of these are:
- Growth in the sales of packaged food, stimulated by the increase in the food retail sector coupled with higher personal disposable incomes
- Growth in convenience foods packaged in BOPP films such as fruit and vegetables, salads, snacks and confectionery
- Investment in new converting and packaging equipment allowing BOPP film to be used in a larger number of applications
- Environmental legislation has paved the way for flexible packaging methods
- Capability to substitute other flexible packaging materials such as BOPET, BOPA and other specialty films, specially coated label papers and aluminum foils