How big an opportunity for you is the government’s plan to ban single-use plastic?
UFlex via its aseptic liquid packaging brand Asepto is making its contribution to sustainable packaging solutions with every move we make. We envisioned the project of paper straws two years back and materialized the process at the beginning of FY2023. Ban on plastic straws in India along with few other countries globally will create an enormous demand for sustainable solutions. Asepto as a pioneer in producing paper-straws in India will certainly have the first mover advantage and will bring relief to the Indian dairy and beverage industry. We aim to produce 6 billion straws annually running at full optimization capacity by Q4FY23. The said capacity of 6 billion straws will be the largest capacity in the world under one roof.
We will be manufacturing different sizes of U-shape paper straws for our customers and this will make us achieve Rs 200-250 crore revenue by FY23-24 at peak capacity.
Can you tell us more about the plans around the production of paper straws for aseptic carton packs at your Sanand plant? By when would it be ready?
UFlex-Asepto will be the first company in India to commission a U-shaped paper straw manufacturing facility offering a production capacity of approximately 6 billion straws annually at peak. The production will commence in Q2FY23. The current market potential in India is approximately similar to our planned production capacity and we are fully committed to supporting all our business partners in the dairy and beverage industry.
This line will be set up at our existing avant-garde aseptic liquid packaging manufacturing plant in Sanand, Gujarat. For U-shaped paper straw manufacturing, we are partnering with the best available technology coming from Tembo BV papers from Holland, a Dutch company which is a global market leader recognized for their high speed, precision and impeccable quality. Our paper straws will be created from sustainably derived papers that are 100% recyclable and renewable.
Do you think there are enough sustainable alternatives to single-use plastic in the market at present? Amul had recently told the environment ministry that there is a shortage of paper straw in the market.
For the sake of our planet, it is crucial to switch to sustainable packaging solutions. Many small and medium size firms have come forward lately with alternatives like reusable metal, glass, silicon or bamboo straws. All these products are potential but temporary solutions to serve in-house/ HoReCa channels but not suitable for on-the-go and spot consumption packs. U-shaped straw is an integral part of the overall aseptic packaging for ready-to-drink beverages like juice, dairy products and energy drinks. The Indian market demand for straws is approx. 6 billion per annum and our upcoming production capacity will be able to cater to this market demand by Q4FY23.
What is the kind of demand that you are gearing up for your sustainable packaging products (for Asepto) this year?
Asepto is now the world’s fastest growing brand in the aseptic liquid packaging industry with a year-on-year growth of 100% since the last four years and we expect to continue with this momentum. We doubled our annual capacity from 3.5 billion to 7 billion packs this year at Sanand, Gujarat. Consumption of aseptic liquid packaging in India stands at almost 14 billion packs per year and the demand is growing at a CAGR of approximately 15%. Asepto is catering to over 120 customers in the domestic market and export to over 35 countries worldwide to customers across dairy, fruit beverage and alcohol segments.
How cost effective is your aseptic liquid packaging as compared to plastic packets?
Paper-based aseptic packaging cartons are comparable on cost front vis-à-vis PET bottles. When we analyse the overall cost to environment, product safety and health, aseptic liquid packaging becomes a naturally preferred choice.
Aseptic liquid packaging has quite a few advantages over plastic packaging. The former is a six layered package for fruit beverage, dairy and alcohol industry built on the 3P’s of packaging – Preserve, Protect and Promote. The aseptic processing and packaging technology enables an extended shelf life of the packed product of 6 to 12 months without the use of any preservatives (depending upon what is filled inside). Moreover, it reduces shipping and distribution costs significantly. Another key benefit of aseptic liquid packaging is that the products can be readily made available to even the remotest corners of the country in an ambient environment, i.e. without refrigeration.
What is the contribution of aseptic liquid packaging to your current stream of revenues and how much growth do you expect in the next 1-2 years?
Asepto has had a year-on-year growth of 100% since the last four years. Backed by a strong order book and our preparedness to cater to industry with sustainable solutions, we are expecting to continue with this momentum.