For Sakata Inx India, it is a mixed situation after demonetization. With oil prices going down in 2016, customers expected a reduction in prices but the market was witnessing a slow-down even before the currency demonetization in November. According to industry experts in both cartons and flexibles, the packaging sector, which had been growing at 10-12%, lost about 15% of its expected turnover from November right till the end of the financial year on 31 March 2017. At a time when many industrial segments were finally looking at the prospect of better growth, which was getting postponed from quarter to quarter over the past couple of years, the consumer product and packaging industries were among those quite badly hit by demonetization.
Compliant brands offer scope for quality growth
VK Seth speaks about consumer product packaging, which is very sensitive in terms of quality and regulatory compliances—and whose volumes require flexible packaging gravure presses to be run at 400 to 450 meters a minute. Major companies such as Coke, Pepsi, Nestle, Britannia, ITC, P&G, and Cadbury are very conscious of the regulatory environment. They are keen to comply and want to ensure that there are no negative list ingredients or products being used for their packaging and that wastage is minimized in the entire process.
Inks and coatings play a vital role in the entire supply chain as packaging volumes and speeds of converting, labeling and filling and sealing machines require more stringent specifications if they are to perform with efficiency. For these packaging supply chains, Sakata can provide a technology-based and cost-effective suite of solutions. New packaging designs with innovative pouching and closures also create special needs of substrates, inks and coatings. Often these new designs require specific or strategic solutions from suppliers, and as Seth says, “Sakata is the first choice for new developments .... We have to demonstrate to customers by repeated trials how we are able to either provide solutions by way of our technology or value for money. So, while we are aware of the volumes, we are also aware of the technology need-gap, which is there on the customer’s side.”
According to Seth, scale will be as crucial for businesses across India just as it is in China. Whether it is Coke, Pepsi, Nestle, P&G, or any other major consumer product company, everybody has tailor-made packaging solutions for their products and especially prices—that are tailor-made for India. In the long run, the small order manufacturers would find it very difficult because the name of the game here is ‘volume.’ Automation, continuous bulk production, the efficiencies of production, wastage reduction, and volumes—these will be the mantras of success.
Sakata’s role in inks for food packaging
Seth points out that the idea of ‘food grade ink’ is a misnomer because there is no ink available that is edible. In fact, inks should not have any direct contact with food under any circumstances and there should be sufficient barrier between the ink and the food item. Even though the ink that is used to decorate a package is not supposed to have any direct contact with the food inside, there are many issues in the course of printing and converting that are still being overlooked and in many cases not yet specifically regulated in the packaging supply chain, especially in our market. Nevertheless, guidelines are there in regulations like UPAI (European standards) and Japanese standards, which forbid certain raw materials and ingredients, particularly in packaging inks.
Sakata is a step ahead in complying with those regulations and Seth says that his company produces inks that are environment-friendly and fully compliant with international regulations. They are also odorless and have very low solvent retention. Some of Sakata India’s ink products are exported to Europe, and within India, the company has a 40% share of the flexible packaging ink market, which it is confident of retaining and even extending further.
For food packaging in cartons produced on sheetfed offset presses too, the demand for low migration inks is increasing. Inks made with mineral-oil-free and cobalt-free ingredients and that are compliant with food safety standards are now readily available from Sakata in India and these are steadily gaining market share.