Market scenario - in brief
Today, HPPL has 14 factories in the country. That's a fairly expansive manufacturing footprint to have - more so if all the factories are running at 80 percent of the practically possible capacities.

The Company caters to a wide range of sectors and SG says that many of these industries are driving HPPL's growth. He acknowledges that HPPL is indeed growing but also adds that it is not growing the way he would have wanted it to.

"We are actually growing in line with the market growth. At present, the volume growth in FMCG is just about seven percent. But the good thing is that while the big players are also growing, we are seeing the emergence of small businesses across the sector. For example, if you go to Big Bazaar, you will see lot of products of these small players on the shelf. These small entrepreneurs are doing a good job today. Amongst 100 such small entrepreneurs, there are five who make it to the next level and these are the ones who are giving the big boys a run for their money. So, we also see these players driving the growth for us."

While HPPL had always been focussed on the international players, about 20 years ago it also started focusing on the Indian brands. And it has seen some very interesting scenarios in the market with the rise of Indian brands. "For example, we have seen that the sales of foreign brand chocolates became flat because Indian mithai started getting packaged well! Of course, the chocolates segment is growing again now but the fact is that small business innovation is also driving growth."

SG notes that the last two years were not so good for pharma but now it too has started reviving. "In fact, we are setting up a new unit in Sikkim for pharma packaging. We will be in production by first half of 2017. Sikkim is now an organic state and that's reason why a lot of pharma companies are going there. Part of the reason why we have so many manufacturing plants is because we go where our customers go, he shares. "HPPL is also setting up a flexible packaging facility in Guwahati, Assam. "The first phase of that plant should also be up in about six months or so," SG adds.

The e-commerce phenomenon
SG acknowledges the emergence of the e-commerce segment and is closely watching its impact on the packaging sector. "But my biggest complaint is that the FMCG companies are not doing enough about primary packaging," he says. Packaging is primarily split into two categories - primary and secondary.

"Primary is the product contact packaging, where the product is directly in touch with the packaging. For example, a packet of chips is a primary package. When you have several such chip packets packed in a corrugated packaged then that becomes the secondary packaging.

"We went and spoke to the e-commerce players and we also spoke to a lot of FMCG players about the lack of primary packaging specifically designed for the e-commerce segment. The challenge is that the major FMCG players do not believe - as yet - that e-commerce is a core area for them. While the e-commerce segment is growing quite fast in India, for a big FMCG player, it constitutes only about five percent of its overall sale. We are ready with our thoughts but we want people to come to us and tell us that we want your packaging. As far as secondary packaging is concerned, it is being designed for e-commerce but it is being designed by the e-commerce companies like Flipkart, Amazon and so on," he informs. 

SG observes that about ten years ago, as a country, we had grown to 8 million retailers - that's almost a crore of shops for branded consumer goods. "Today, that number hasn't grown much. Why? The problem is that consumer goods companies are not spreading distribution. But some clever e-commerce companies have seen the gap and they are spreading distribution." In consumer goods of any type, two things are very important - reach to the consumer and innovation. "Give the consumer something new, which offers better value and then see the difference. Well, that's what we have been doing so far," he says. 

The vision
SG believes that today HPPL has acquired a certain status in the market. "I believe that even five years from now this company should be the standard bearer. If you take a vote now of 100 customers, 98 will say that this is best packaging company in India. Today, that is true. Five years from now too, 98 must say that this is the best company in packaging," he says explaining his vision for the organisation.

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