India ? A new window of opportunities and prospects in equipments for contract packaging

In recent times, packaging has come under cost scrutiny of major CPG, F&B companies like never before. One way of doing so is controlling the capital expenditures on equipments. Contract Packagers are in continuous pressures from brand owners to reduce costs, and their inability to invest large capitals on frequently changing package formats. The buyers had earlier started looking in to China with a strong supply base, as a potential low cost opportunity. At the same time, India has also proved itself to be a competent machine source in the low technology space. India has now emerged as a window of opportunity in this front, providing low technology machines at a globally competitive price. This is just the right match for contract packagers, where quick ROI is critical. India has a weak R&D base for packaging equipments. However, by identifying the right machine segments that could be sourced from India engaging with the right suppliers, significant savings can be garnered. This white paper analyzes the different scenarios in the market that has paved way for India, a country with a weak R&D and technology base to become a prominent player now in machinery exports. Introduction: India?s packaging equipment market is estimated a size of 620 million USD in 2013, and is forecasted a high growth of around 16% Y-o-Y till 2017, majorly due to the high growth in domestic packaging market. The domestic demand growth has spurred the region?s machine supply capabilities and is now sharing stage with China and Korea in APAC, towards which the global packaging equipment procurement is gradually shifting. India has become a strong player globally in providing ancillary and low technology equipments, used mostly in contract packaging environments and has made a significant mark in the region?s export figures. India?s low cost and low technology machines might affect the export growths of its close competitors like China, Korea and Thailand, but at the same time it is a welcome opportunity for buyers in the West. Market Scenario of Indian Packaging Equipments Industry Indian packaging equipment exports market is fairly nascent, having become prominent only in the past 4 ? 5 years. In the past, the country arguably had no significant player with advanced technologies and R&D that would match the European counterparts. However, half a decade down, the dynamics of the region has now witnessed a series of changes, with the domestic demand growth soaring at over 15%, and exports growing by over 50% in just 3 years (2010 ? 2013).