Packaging major Uflex parks Rs 1500 cr plant at Sanand

The company will invest around Rs 580 crore in the first phase to set up an aseptic packaging

As Gujarat’s Sanand evolves as a fast-moving consumer goods hub besides being an automotive cluster, India's largest flexible packaging company, Noida-based Rs 6,200 crore Uflex, has decided to invest Rs 1,500-crore packaging plant at Sanand, citing proximity to customers such as Nestle, Nivea, Colgate, among others.

The company would invest around Rs 580 crore in the first phase to set up an aseptic (sterile) packaging line that would employ 250 people. While the capacity in the initial phase would be around 3.5 billion packs, it would be increased up to seven billion packs over time.

Trial runs would start by August-September this year. Nearly 90 per cent of the production from this factory would be for domestic consumption, the company said in a statement. Aseptic packaging basically refers to packing an item (typically food or pharmaceutical) in a sterile container.

The aseptic packages are typically a mix of paper, polyethylene, and aluminum, with a tight polyethylene inside layer.

Uflex plans a phased investment of Rs 1,500 crore at its 72-acre Sanand site, which would eventually generate direct employment for 2,000 people, and generate revenues worth Rs 3,000 crore with an operating profit of about Rs 800 crore. The Sanand site would also have facilities for cement packaging, tube and holographic film manufacturing. The company, however, did not give out an exact timeline for the same.

“Liquid packaging business has tremendous potential in India as well as globally. While the Asia-Pacific market is clocking a seven per cent growth rate, the Indian market has been growing in double-digits for the past three years, with last year’s growth being 20 per cent. The Indian market would double from eight billion to 16 billion packs in the coming four to five years,” said Ashwani K Sharma, president and CEO (liquid packaging and new business) at Uflex. He added that even Pakistan has a market size that is double that of India's, while the China market has already touched around 80 billion packs.

According to Sharma, the aseptic packaging market in India is currently dominated by Tetra Pak, a Swedish multinational food packaging company.

Uflex has presence in 140 countries and has facilities at Noida, Jammu and Malanpur in India. India accounts for 51 per cent of its global consolidated turnover, and with the Sanand plant coming onstream, the company sees that going up further.