Essel Propack, part of the Essel Group, is the world’s biggest player in laminated tubes, which are used for various products like toothpastes, ointments and creams.
Essel Propack, part of the Essel Group, is the world’s biggest player in laminated tubes, which are used for various products like toothpastes, ointments and creams. Essel also produces plastic tubes, which are used for premium FMCG products, and flexible packaging, which includes sachets and packets for wafers and biscuits. For the quarter ended September 30, excluding the sale of its medical devices business last December, Essel’s consolidated revenues rose 17% to Rs327.22 crore and net profit grew 160% from Rs5.18 crore to Rs13.46 crore. Vice-chairman and managing director Ashok Goel spoke to DNA about the company’s capacity expansion plans and the recovery in its overseas markets. Excerpts from the interview:
How much do exports contribute to your business?
We have plants all over the world for tubes, which cater to the local markets but we do export raw material for the tubes, which is laminates. They are supplied to all our plants across the world only from India and China.
What kind of capex do you have for this year and how much has
been spent?
About $18 million and 60% of it has been spent. In China we have opened two new plants for tubes. In India we have expanded or are in the process of expanding all our plants. We have six of them for tubes. Our biggest expansion would be in Goa and Wada (in Thane district). And we have two facilities for flexible packaging in Pondicherry and Uttarakhand.
Are there any fundraising plans?
No, we don’t need to raise money.
How’s the response to your relatively new product Etain been?
Etain is an environmentally-sustainable product, which we introduced a year-and-a-half back. About 35-40% of the plastic used in it is consumer-recycled or industry-recycled. There have been more talks than sales. It’s more expensive than normal tubes.
Any more new products coming up?
That’s a continuous process.
Do you develop products primarily in response to demand from your clients?
Yes, but we also come up with something and show it to them.
Is Q3 normally your best quarter?
Yes, it is. This year it would be even stronger.
How are the overseas markets doing?
In China for a short period there was a blip. Europe has kind of bounced back in terms of offtake. US was sombre particularly in March-April, after that it has kind of stabilised, at least for us.
Is India your biggest market?
India and China are our biggest markets, in terms of quantity. In terms of revenues, India would again be the biggest, about 30% of our global revenues and China would be next.
Are there any acquisitions on the cards?
If you are talking of this financial year, I would say no but you never know.
But are you on the lookout?
We are constantly scanning the horizon. But we could do some different kinds of things which we can’t talk about right now.
What about margins in your business?
Our global average is about 18-19%. In India it’s 20%.
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