INDIA – Indian packaging firms that are catering to the dairy sector are stepping up investment towards meeting the novel packaging requirements for value-added products to help increase shelf life and retain quality.

The increasing investments are focused mostly on maintaining the sterility of value-added products, apart from maintaining their taste and nutrition through aseptic and UHT (ultrahigh temperature) packaging, given the tropical conditions in the subcontinent.

Packaging firms, which offer some innovative solutions to help detect adulteration in dairy products, see nearly a fifth of growth in the business coming from value-added products and are now working on introducing near-field communication (NFC) tags.

Proliferation of ecommerce, coupled with revolution in retail industry in India, is also “pushing the growth of the packaging sector”, said a joint report by Tata Strategic Management Group (TSMG) and the Federation of Indian Chambers of Commerce and Industry (Ficci).

Tropical conditions and inadequate refrigeration facilities in the subcontinent are also influencing the packaging firms to come up with innovative solutions to improve the shelf life of milk and value-added dairy products, said Prabhat Milk’s managing director, Vivek Nirmal.

Some of the latest investments in India’s dairy packaging field to help do away with refrigeration and preservatives include Schreiber Dynamix’s Rs 100 crore ($14.97b) aseptic packaging plant in collaboration with Tetra Pack and Uflex’s Rs 580 crore ($86.81b) aseptic plant.

While the Mahindra group introduced innovative poly pack for its Saboro brand of milk that turns blue on adulteration, Uflex launched a low-cost UHT poly pack to increase the shelf life of liquid milk to almost a month.

“We are seeing high growth in both aseptic and other plastic packaging materials to the extent of 8% and 20%, respectively, apart from good growth in packaging machines coming from the dairy sector,” said packaging material manufacturer Uflex’s chief executive, Ashwini Sharma.

The demand for packaging solutions by the sector is increasing at around 20%, said Rabobank senior analyst Shiva Mudgil, “driven by the increasing awareness among consumers on product safety and growing demand for value-added products.”

Vivek Nirmal of Prabhat Milk said expensive innovative solutions like NFC tags would find adoption by the dairy sector once value-added products attain high volumes to make it viable.

The dairy industry currently accounts for 8% of the total packaging industry, but stands second in consumption of high-end packaging materials after juices, followed by alcohol.

According to the Tata-Ficci report, the Indian packaging industry is currently growing at a rate of 18% a year to reach $72.6 billion by fiscal 2020 from $32 billion in fiscal 2015.

February 8, 2017;