Essel Propack eyes HUL's oral care packaging deal

Essel Propack is eyeing a contract for the packaging business of Hindustan Unilever Ltd’s oral care brands Pepsodent and Close Up in the domestic market.

The packaging company already has oral care clients such as Colgate, Dabur and Vicco in India.

“We are looking at the possibility of getting HUL’s oral care portfolio, as globally we do packaging for Unilever and also handle exports in the domestic market,” said Ashok Goel, Vice-President and Managing Director, Essel Propack.

HUL is the second largest oral care player after Colgate.

At present, companies such as Betts, SRM and Borkar are handling the oral care packaging of HUL, say industry sources.
Adequate demand

Essel Propack, with 65 per cent share in the domestic market, is making plastic laminated tubes, catering to both oral and non-oral care companies in the FMCG and pharma categories. Though there has been a slowdown in consumer demand in the FMCG category, the company is undeterred about growth prospects.

“We have a large portfolio and have not witnessed any shrinkage in packaging demand in the oral care category. Even non-oral categories such as skin creams and face washes have been growing,” said Goel.

According to analysts, FMCG companies have been pushing for volumes to tide over the slowdown effects, due to which there is adequate demand for packaging contracts.

Typically, FMCG companies spend 3-8 per cent of their sales on packaging costs.

Globally, Essel Propack sells packaging to the top four oral care companies - Procter & Gamble, GlaxoSmithKline, Unilever and Colgate.

“We tackle around 20 per cent of oral care packaging of the global majors. These are long-term contracts with fixed margins and returns, and currently we have a 33 per cent share in the global markets,” Goel said.
Non-oral care business

Essel Propack is also planning to grow its non-oral care portfolio, in categories such as beauty, cosmetics, pharmaceuticals and foods in both India and overseas.

“We expect our global revenue to go up to 66 per cent of total sales. Having patented our innovations and won contracts from multinationals such as P&G and L’Oreal in the global markets for the non-oral care business, this would not be a difficult task,” the MD added.

In India, Essel Propack has been catering to clients such as Emami, Dabur, Shehnaz Hussain and Avon in the non-oral category.
Capex plan

The company’s capital expenditure for the year stands at ₹140 crore, which would mostly be used for capacity expansion across its manufacturing facilities in India, China, Europe and Columbia.

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