Packaging: In the route of advanced technology The highly fragmented packaging industry is estimated at Rs 8,000 crore.

s 8,000 crore. The industry is growing at the rate of 22-25 per cent per annum. In the next five years, the sector is expected to triple to around $ 60 bn. The net profit of the packaging industry spurted 104.5 percent during Q3 FY08, against a growth of 29.5 percent in the December '06 quarter. The large growing middle class, liberalisation and organised retail sector are the catalysts to growth in packaging. More than 80 percent of the total packaging in India constitutes rigid packaging. The remaining 20 percent comprises flexible packaging. There are about 600-700 packaging machinery manufacturers, 95percent of which are in the small and medium sector located all over India. Indian packaging machinery imports are $ 125 million. The import (customs) duty for packaging machinery is 25.58 percent for 2007-08. Germany and Italy are the latest suppliers of packaging machinery to India but focus is now shifting on Taiwan, Korea and China. Indian packaging machinery exports are rapidly growing. India's per capita packaging consumption is less than $ 15 against world wide average of nearly $ 100. The total demand for paper is estimated to be around 6 mn tones, of which about 40 percent is consumed by the packaging industry. Laminated products including form-fill-seal pouches, laminated tubes and tetra packs are growing at around 30 percent p.a. Food: A thriving industry with a large untapped potential India is the world's 2nd largest producer of food next to China It is the 2nd largest vegetable and 3rd largest fruit producer in the world The growth of food processing sector has nearly doubled to 13.7 per cent during the last four years. It ranks second only to Japan in inland sector fish production and produces about 6.57 million metric tonne fish every year. Of the world's total annual spice trade of 850,000 tonnes, India accounts for 44 per cent in quantity and 36 per cent in value The beer market in India is pegged around 12 million hectoliters. Functional foods had the market earned revenues of over $ 185 million in 2007 and this is expected to reach $ 1,161 million in 2012. Factors instrumental in driving growth and investment (FDI) in the Indian food industry are: Effective distribution network and supply chain Product range that is customized to suit local market requirements Superior processing technology Brand building and marketing Pharmaceutical: Opportunities for growth in the post WTO regime The sector is growing at a rate of over 13 per cent annually. The sector is estimated to be worth $ 6 billion. Indian pharmaceutical industry ranks 4th in terms of volume (with an 8 per cent share in global sales) globally. In terms of value it ranks 13th (with a share of 1 per cent in global sales) and produces 20-24 per cent of the world's generic drugs (in terms of value).

India is one of the top five active pharmaceutical ingredients (API) producers (with a share of about 6.5 per cent). The industry is in the front rank of India's science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. Indian pharmaceutical companies supply almost all the country's demand for formulations and nearly 70 per cent of demand for bulk drugs. Indian pharmaceutical market is a $ 7.3 billion opportunity with the domestic retail market expected to cross the $ 10 billion mark in 2010 and be worth an estimated $ 12-13 billion in 2012. The industry ranks 17th with respect to exports value of bulk actives and dosage. During April 2000 to October 2007, drugs and pharmaceuticals are the tenth largest FDIattracting sectors in India. Factors making the Indian pharmaceuticals an industry to reckon with are: Self-reliance- displayed by the production of 70 per cent of bulk drugs and almost the entire requirement of formulations within the country India has the largest number of FDA-approved manufacturing plants outside the US. The country has close to 100 such units. Low cost of production Low R&D costs Innovative scientific manpower Strength of National Laboratories Increased outsourcing of manufacturing processes to India with supported clinical trials

Automation: Triggering growth Technologies to improve business efficiencies and competitiveness The globalisation of the Indian economy has exposed the domestic companies to the free market dynamics. With no protection from the state, these companies are learning to be more efficient and are re-engineering the business processes to compete with the global businesses. Among other things, deployment of IT has been extensive in the better-managed companies and the one field where it is being successfully deployed is the management of the supply chain. This has brought the focus on the Automatic Identification and Data Capture technologies, which in several companies is integrated with the ERP/ EDI applications. The entry of MNCs and the retailing shifts have also contributed to a higher use of barcoding and auto id technologies. The killer application for these technologies, however, is expected to be in the field of egovernance with not only the central and state governments adopting the technologies in ID projects and driving licenses etc., but also local administrations like municipal corporations and village panchayats expected to use the technologies to stream line administration. The AIDC industry that includes Barcodes, smart cards, RFID, biometrics and EAS is probably the fastest growing segments of the economy anywhere in the world. Though the base is still small in our country, the over 40 percent growth that is taking place year on year is increasingly becoming significant. The incremental growth is large enough already to catch the eyes of the largest global players. The factors that drive the domestic requirements all indicate that the demand itself will ensure the present rate of growth in the years to come. If the Indian industry can leverage its IT strengths and grab the opportunities that are coming its way, it is not inconceivable that India can be a major hub to provide the software, integrated solutions and finished products in these fields to the entire world. Barcodes The barcode industry is around Rs. 2.5 billion and is growing at over 30- 35 percent every year. The hardware- Printers and scanners contribute equally to the 50% of this turnover while the consumablestags, labels and ribbons contribute 35% and the services account for the rest. The industry has around 50 players with 5 large players having a turnover of over Rs. 100 million. There are other 10 companies that have turnovers of between 50 - 100 million. The major international suppliers- Symbol , PSC, Metrologic

& Unitech for bar code scanners and Zebra, Intermec, Printronix, Sato, Toshiba & Datamax for barcode printers have their presence in India. Ean India, an affiliate of Ean International has played a large role in creating awareness about barcodes while developing and implementing standards across the industry. AIDC Technology Association has helped organize the industry by forming this association of all stakeholders of this technology. Courier and logistic industries are the active user of barcodes. The auto industry uses barcoding for auto data capture of information about its materials and supplies during receipt, storage, Work in progress (WIP), dispatch and sales operations. In retail sales of auto parts spares and accessories, this is used to facilitate stock control, track and trace, consumption forecasting, etc. Pharma and healthcare are another large user of barcodes. They are used effectively to track distribution of the drugs in the market place and to recall them if necessary. They are also used provide quality service by tracking expiry dates of medical supplies, patient identification and billing, hospital stock management and order replenishment etc. The largest growth segment is however, organised retail. The use of barcodes is already well established in major retail sales institutions. The proliferation of malls and food bazaars is driving the growth in this segment. Logistics contributes around 10% of the barcode industry. Retail contributes around 40% and nearly 50% comes from all other industries like auto, pharma etc. Smart Cards Over the last few years, the awareness of smart cards and its applications have gradually increased among the potential users in India. Significant growth has taken place in wireless cellular applications, retail loyalty applications, healthcare applications and driving license and vehicle registration applications. Several pilot projects have also been implemented for multi-application campus cards, banking, ID, automatic fare collection, toll, healthcare, etc. With the smart card market expected to grow from the current base of 40 million cards to 400 million cards in the next few years, both Indian as well as foreign smart card companies are showing keen interest in this market. Schlumberger, Gemplus, G&D, Obethur, VCT and Orga are the globally recognized card manufacturers who also dominate the Indian market. Shonkh, Rolta, Smartchip, CMS, Siemens (SISI), CA Satyam and E-Cube are the major system integrators. STMicroelectronics, Philips, Infineon, Reneseas and Atmel are the chip manufacturers who are already present in the the country. Though the SIM card market has driven the growth in the last 5 years, the rate of growth in banking and retail sector is expected to be larger in the coming years. The usage in the transport and health care sectors is also expected to increase. However, the industry is looking at the government usage and the much-touted national ID project for a spiraling growth in the next few years. Though the SIM card market has driven the growth in the last 5 years, the rate of growth in banking and retail sector is expected to be larger in the coming years. The usage in the transport and health care sectors is also expected to increase. However, the industry is looking at the government usage and the much-touted national ID project for a spiraling growth in the next few years. Biometrics As both the private and Government sector organisations search for more secure authentication methods, they increasingly become aware of biometrics as the killer technology for near foolproof security. It may not be long before all password and card based systems currently in vogue get replaced with biometric devices. The little over Rs. 1.5 bn market in India is growing at anywhere between 70- 100%. While there is a growing demand for both physiological and behavioral biometrics devices, fingerprint recognition is the current hot favorite. Lack of infrastructure, standardisation in the industry, high costs and duties are the impediments in the growth of the industry. Most of the biometrics hardware is being imported from USA, Germany, Israel and in recent times from China. Indian manufacturers are also getting into the act with some fingerprint scanners now being made available in the market. RFID

Worldwide, RFID is being driven by an electric mix of researchers and businessmen of Indian origin and provides an unprecedented opportunity for the country to export services and software. The technology whose applications are limited by ones imagination is primarily finding use in fleet management, inventory and asset management, warehouse automation, asset tracking, quality control, packaging, security and access control, hazardous material management, advertising and promotion, delivery and smart card based payment systems. The application is happening in many industry segments but still the areas of focus are retail and supply chain management. The technology has got a new impetus with the emergence of Electronic Product Code (EPC), a set of standards that weaves basic RFID technology into a numbering scheme as they move across the business supply chain. As the benefits of the RFID-EPC technology become evident, more industries are investing their research effort into product development to lower the cost of RFID tags and weed out the teething problems. With its highly skilled workforce and strong IT base, India is a natural choice for firms engaged in RFID product development. India is also being used as a center for executing RFID implementations for the entire Asia-Pacific region. The country by itself is also a huge market for RFID solutions. Already, the interest in the technology is evident with the Indian pharmaceutical, defense and export sectors being the early birds in exploring its use. As a part of the supply chain for multinational corporations, the Indian companies are also expected to adopt the RFID-EPC technology. Logistics: Attracting investments Indias logistics sector attracted investments worth Rs. 23,200 crore in first half of 2008. It outclassed some of the major sectors including aviation (Rs 20,890 crore), metals and mining (Rs 8500 crore) and consumer durables (Rs 6000 crore) among others. Mumbai has emerged as the preferred location for the development of logistics parks with an investment of approximately $ 200 million. The development of seven to eight logistics parks are in pipeline on 600 acres around Mumbai. A large number of upcoming SEZs have necessitated the development of logistics for the domestic market as well as for global trade. Indian logistics industry is expected to grow annually at the rate of 15- 20 percent, reaching revenues of approximately $ 385 bn by 2015. Market share of organised logistics players is also expected to double to approximately 12 percent during the same period. About 110 logistics parks spread over approximately 3,500 acres at an estimated cost of $1 bn are expected to be operational and an estimated 45 mn ft2 of warehousing space with an investment of $ 500 mn is expected to be developed by various logistics companies by 2012.

Bulk Packaging The Indian bulk packaging market started moving significantly only in the 1990s as the industries acquired bulk handling capabilities to compete in the globalised world. The markets really took off at the turn of the new millennium spurred by an export led and domestic growth in the agro produce & food; bulk drugs & generics; chemicals & pesticides and Petroleum & lubricants. The market grew at around 28% for the first 6-7 years and then settled down to a 15-20 % band largely bucking the world wide slowdown. The Rigid Packaging industry that comprises of Drums and Containers made from Metal, Plastics, Fiber Board and Composite materials is growing at about 13% PA. Within the industry, there is a migration to plastics and the major metal drum manufacturers have joined the bandwagon themselves by setting up parallel facilities for manufacturing Plastic containers. The 6 million units Plastic Drum market (INR 5 bn.) is growing at over 16% while the 10 million drum steel market still manages a positive growth of 2% and is valued at around INR 2 bn. The fiber drum and composites valued at INR 4 bn. is also growing at around 10%. The INR 140 bn. flexible bulk packaging industry that includes woven sacks, leno bags, wrapping fabric, and flexible intermediate bulk container (FIBC) is growing at over 20% with FIBC containers expected to grow three fold in the next 5 years riding an increased industrial production and a shift toward higher-

value containers offering enhanced performance and supply chain efficiency. In fact, the global slowdown has been an opportunity for the Indian FIBC manufacturers as the production cuts by the companies in Europe and USA has resulted in the sourcing shifting to India adding an important factor to the growth story.

Converting: Opportunities Galore

The Indian economy is growing and so is the Packaging industry. As growth rides on increased industrial production and international trade, demands on package converters have become more intense and sophisticated. Within India, increasing penetration of organised retail (including foreign players who are large consumers of flexible packaging solutions) and increasing preference for branded products has added fuel to the demand for flexible packaging solutions. Machines and advanced technologies for printing and converting packaging materials for the Flexible Packaging Industry has come up to meet the rising requirement. The Indian Label Industry is growing at a rate of more than 15% with several press manufacturers and label converters gearing up to challenges. The industry has rapidly evolved and is global in its outlook and delivery. There are close to 5,000 box plants scattered throughout the subcontinent in classic developing-country industry fashion, mostly fragmented and family-owned. So how does the country meet this ever increasing demand? The larger Indian converters have been adopting the latest technologies and several high-end machines have been installed in the country in the past few years. These machines are largely imported from the western countries, with Germany and Italy accounting for almost 45% of the total packaging machinery imports. However, as the need to upgrade is felt by the smaller converters and corrugators and many commercial printers diversify into package printing, there is an increasing focus on machines made in Taiwan, Korea and also China. Meantime, the Indian machinery manufacturers have also geared up and are today making machines that are lapped up by the growing industry in India. Some of these machinery manufacturers are also making inroads in the export markets and are moving beyond the traditional Asian neighbours and the countries in the Gulf to South Africa, East Europe and even South America. However, the present per capita consumption of packaging in the country is dramatically lower than the global averages. All the pointers indicate that the packaging industry is set to move to a higher level of growth between 20-25% from the present level of around 12-15 percent. The packaging converting sector is growing at 15-18% and there is a marked shift from the unorganised segment becoming more organised. The industrial growth in India has seen top players in the A and B tier segments reap high benefits. More importantly, this growth has acted as a catalyst for the aspirations of the C and D tier packagers who are making a concerted effort to move from unorganised to organised operations; from manual to automation. This has led to greater demand for converting machines. The potential of growth is much larger and unrealized.

Flexography: Growing Demands

World over, Flexography has become the pre-dominant medium for package printing. The use of flexo has also been growing in India. Several sophisticated CI flexo presses have been installed in the past six months. The booming label industry is riding a narrow web flexo invasion as folding carton manufacturers also take a look at this technology.

As India slowly adapts to the global trend where flexo occupies the predominant position for package printing, hosts of opportunities are opening up for Indian converters and the suppliers. The Indian corrugators have been increasingly adopting flexo printing with water-based inks. The coming years should see a larger share of printing going to flexo in the converting and corrugating industries.

Corrugation: Future Trends

The packaging industry in India has been registering a constant growth rate of 15%. The Corrugated packaging industry is however finding itself at the crossroads. Increasing prices of kraft paper, non availability of international standard papers at affordable prices, resistance of corrugated box user industry to offer sustainable prices, increasing competition, non viability of automatic plants are proving to be hurdles in the growth path. Despite these adverse circumstances, the industry is all set to take on the challenges and look at the future opportunities. As global companies set up their manufacturing bases in India to meet the growing demand for consumer and white goods the need for high quality boxes is appearing evident. Progressive Corrugators are setting up automatic board/box making plants to increase production and enhance performance of boxes. In house printing on corrugated is becoming imperative. All this portends well for the industry. Insurgence of corrugated packaging machines from neighboring China and Taiwan will prove to be a threat as well as a great opportunity considering the inherent capabilities and experience of Indian Corrugated Machinery Manufacturers. Strategic alliances with overseas machinery manufacturers are already happening and will soon become a norm.