Flexible packaging is witnessing a staggering growth in the Middle East. Increase in population and the rise in the living standards in our region especially UAE have contributed to this growth. For offset printers flexible packaging is unfamiliar terrain while they also believe it is a safe bet for future investment. To understand more about this industry we met with Rajiv Batra who has been at helm of Emirates Technopack and Kangaroo Plastics for past 4 years. In this article he explains the trends and ups and downs of a packaging technology that touches our everyday life.
Producing flexible packaging has always had the potential to be a lucrative market and a few big players in the UAE, while keeping a low profile, have been quietly enjoying a positive period. This is not unreasonable for it is a highly specialised sector requiring a high level of investment. Commercial sheetfed printers are making forays into packaging- primarily in the rigid sector which is more attuned to their skills and instincts – but as the strong growth in flexible packaging continues some sheetfed operators are beginning to see flexible as having a future and a safe bet for investment. The reasons are clear for this interest; population is growing, the demand for food products is on the rise but to get a better idea of the potential in the world of flexible packaging ME Printer visited Emirates Technopack (ETP) and Kangaroo Plastics Middle East (KPME) located in Dubai’s Jebel Ali free zone.
Both companies are part of Corys Industries, a major manufacturer of piping systems and flexible packaging. Corys Industries is also part of Green Coast Enterprises, a private group owned by the Abdul Ghaffar Hussain Family and established in 1977. Kangaroo Plastics was conceived in 1976 based on the vision of Green Coast Group’s chairman and founder Abdul Ghaffar Hussain. In 2003 Emirates Technopack was born as a spin off from Kangaroo Plastics to cater for the flexible packaging sector and Kangaroo focused on film production (both printed and unprinted) along with retail shopping bags for Duty Free establishments and geomembrane liners. Over 350 people are working in these two facilities and the group as a whole employs around 1000 people.
Rajiv Batra the man at the helm of both companies says although he has an automotive background he finds flexible packaging an exciting and innovative industry: “I am a mechanical engineer and before joining Kangaroo plastics 4 years ago, I was working with Tata group in India and I had no prior experience of the packaging industry. Fortunately the decision makers at Corys were looking for somebody from outside the industry with executive skills to bring a different perspective to the business so I’m really excited to be in this position,” enthuses Batra. He adds, “While the flexible packaging market in GCC has been growing at a CAGR of 8%, ETP and KPME have been growing more strongly – around 15-20 % in the past 3 years. Business has benefitted from a regional hub status, with many organisations packing commodities on behalf of larger global brands in UAE. The bulk of customers at ETP are from overseas though at Kangaroo which is into secondary packaging, most of our orders are coming from local suppliers. There has been phenomenal growth in the processed food industry due mainly to the modern lifestyle enjoyed in our region, and in the UAE in particular. This has led to a significant increase in the demand for flexible packaging.”
Everybody loves 20/20
KPME and ETP operate with a variety of high capacity printing systems along with associated converting equipment making the two probably the biggest flexible packaging operation in the UAE. KPME boasts a complete blown film extrusion line from Italian manufacturer Bandera, Gemini and Uteco flexo presses, laminators from DCM, a bag making and film pouching machine, cast extrusions line for cable and tiles along with a host of other equipment and accessories. ETP has a range of state of the art equipment from Bobst group including two Rotemec 9 colour rotogravure presses, as well as a Titan slitter rewinder. Lidding and pouching plus lamination facilities, coating and lacquering machines all go to make ETP a power house in the flexible packaging sector. To enlarge its capacity, ETP recently placed an order for an all new Rotomec rotogravure press. This new 9 colour high spec machine will have a top speed of 400 meters per minute.
“Almost all of our equipment are from top European manufacturers, so we can offer high quality printed products. We use all kinds of films such as PVC, PE or BOPP as well as paper, aluminium often in combination to produce a wide range of packaging products and we are able to produce our own PE films. However to source other types of film specially BOPP we rely on several leading packaging film producers in UAE and across the world.” He remarked that they work in a highly price sensitive environment so dealing with reliable suppliers is absolutely crucial to get the best deal.
The business catchment is large and he explains: “We have customers in all GCC countries as well as Africa and this includes Sudan and Ethiopia. Our biggest customers in KSA are from leading diaries and mineral water companies. For these particular customers we use a printed single layer aluminium foil which is then cut to form of lids. Another of our specialties is lacquering.” Lids are made for major dairy and mineral water producers.
The most popular flexible packaging material in the region Batra believes is called 20/20 and consists of two layers of 20 micron films. One layer is transparent and the other is metalised. This type of flexible packaging is widely used in food products such as wafers and toffees. In terms of consumption it is probably the most popular flexible packaging material in the region. Another popular packaging material is a triple laminate used in the production of small sachés for ketchups and other sauces used in the fast food chains.
Riding the storm
The business for KPME and its offspring ETP has not always been smooth Batra points out: “The slowdown in the construction industry in UAE due to the global financial crisis affected our sales at KPME, which has a sizeable business in this sector. To counter this we shifted our focus on to the retail and industrial supplies sector. ETP was also affected by the crisis; however since 2010 it has managed to recover and has almost doubled its revenue during the last 4 years. “Other factors play their part,” he says: “Governments in the GCC are promoting domestic food processing, so the demand for food packaging is also increasing and this has helped our business. We have managed to grow our business consistently at a rate of 15- 20% over the last 5 years.” Batra then adds: ‘We have also been blessed with loyal and long term customers who have helped us ride out the financial storm. Many of our jobs are repeat orders with our priority being to cater for key customers..
KPME has a modern flexo prepress department, equipped with a CDI plate imager from Esko and a large graphic arts department. The economics of an in-house rotogravure cylinder engraving system is difficult to justify Batra says: “Cylinder engraving is a complex and highly specialised process. We have studied the implementation of a complete rotogravure prepress system in ETP and came to the conclusion that for the moment the investment and the effort to install, commission and run such system is not in our interest.” He says that specialised centres offer these services efficiently and customers are rather keen to work with their preferred engraving centres. He observes: “Some flexible package printers who have already bought such systems now have issues regarding capacity utilisation
Batra remarked that the company also studied the possibility of adding digital printing capability to its portfolio, but the systems available in the markets are at present really only suitable for short runs: “In the food packaging sector the runs are normally high so digital technology still has some catching up to do in this sector. But I do believe for pharmaceutical packaging digital technology is an ideal solution. Runs are short in pharma packaging and personalisation plus versioning is strongly in demand. We are closely following developments in digital technology and eventually we will opt for some kind of digital solution to cater for shorter runs,” opines Batra.
Gravure or Flexo, that is the question
For many outsiders, especially the advocates of environmental issues, the flexible packaging industry doesn’t generate a lot of enthusiasm, given the part plastics play in the process.
Yet in Europe and US there are tough environmental regulations and food manufacturers are moving away from rotogravure process and are embracing flexo technology very strongly– particularly when solvent recovery systems are installed. This trend has led to an increase in flexo quality to a point where some even argue that flexo is now able to offer a similar quality to gravure.
Batra recognises this trend has yet to reach the region: “When it comes to flexible packaging Middle East is still pretty much a gravure market and we are committed to the environmental regulations of UAE. For example the use of biodegradable PE film is now mandatory, though in Europe and US flexible packaging printers are also required to use biodegradable BOPP film which is not available here so maybe this will be the next step for our region.” Environmental issues figure strongly for him: “We are a HACCP (Hazard Analysis Critical Control Point) certified company and certification was awarded to us for our systematic preventive approach to food safety. We take immense pride in maintaining the greenery around our facilities and we also adhere to the standards prescribed for effluent disposal. Last year we were awarded an ‘Environmental Excellence Certificate’ From the Ministry of Environment and Water. We have also started with manufacturing of biodegradable bags at KPME,” Batra concludes.