Cosmo Films recently announced expansion by setting up a CPP film production line in Aurangabad with an annual rated capacity of 25,000 MT. The CPP line will require an investment of about Rs. 140 crores to be funded through internal accruals and debts and is expected to commence commercial production in 2 years. Pankaj Poddar, Group CEO, Cosmo First, shares some insights with The Packman.
Mahan Hazarika: Cosmo Films has announced expansion by setting up CPP film production line in Aurangabad. When will commercial production on this line start?
Pankaj Poddar: We have commissioned a line for Cast Polypropylene with an investment of about Rs. 140 crore in Aurangabad. The production line which is to be funded through internal accruals and debts is expected to commence commercial production in the next two years.
Mahan Hazarika: What are the special features and production capacity of this line?
Pankaj Poddar: The new production line for Cast Polypropylene (CPP) films in Aurangabad will have a rated annual capacity of 25,000 MT. In Aurangabad, the new production line will result in the addition of 50 new direct jobs and numerous indirect jobs.
Cast Polypropylene (CPP) films offers excellent heat seal strength, good thermal stability, good puncture resistance, good clarity and fair barrier properties. Cosmo manufactures customized CPP films for various use-cases like hot filling and retort applications, high speed application on FFS machines and bakery products.
Mahan Hazarika: With the new line, what goals have you set for yourselves?
Pankaj Poddar: Cosmo Films aims to increase its share of specialty films and become the world’s largest speciality film player. Cosmo Films is also foraying into new markets in order to meet these objectives. We have announced the opening of the biggest BOPP film production line in the world, with a rated annual capacity of 67,000 metric tons, in Aurangabad, India. By the second quarter of 2022, a new BOPET film line will also be commissioned, which will significantly aid the business in increasing production and sales.
We are also breaking into the consumer market by producing window lamination films for heat reduction and control. Rising temperatures across the nation may promote environmental sustainability, a smaller carbon footprint, and less electricity use. We continue to be optimistic about future demand and market conditions and anticipate steady growth this fiscal year supported by ongoing R&D and positive client experiences.
Mahan Hazarika: Can the packaging industry cope with a supply chain in crisis? How Cosmo Films is tackling the crisis?
Pankaj Poddar: COVID-19 pandemic has highlighted that supply chain disruptions are inevitable; so businesses need to be agile and future looking. As for any other business process, raw materials supply needs to be robust and at Cosmo we have built systems and relationships with our suppliers across business verticals.
With Cosmo Films being a B2B firm and a part of the chain of the global supply ecosystem, we have benefitted from the China +1 policy as the world looks beyond one country to expand its distributor’s bracket and spread their reliance across multiple regions.
Mahan Hazarika: How do you think the sustainability debate will evolve in the coming years?
Pankaj Poddar: The packaging business is moving towards a circular economy and embracing mono-material laminate structures. The future world will emphasize multi-pronged strategies to promote sustainable and inclusive growth. This entails implementing clear Environment, Health, and Safety Systems as well as best practices for energy management and green manufacturing.
Cosmo Films is already developing packaging that is more durable, contains monolayer materials, and is recyclable. The company is pursuing a sustainability plan that goes beyond packaging in order to reduce waste by enhancing waste collection and the re-granulation process to increase the creation of useful re-purposed granules.
The goal of the circular economy is one that Cosmo is committed to, and a significant percentage of our investment goes into sustainability. Further, Cosmo Films is increasingly relying on renewable energy as a source of power for its manufacturing processes.
Mahan Hazarika: What will remain a primary business challenge for you in 2022?
Pankaj Poddar: Due to supply chain problems and growing input costs, raw material prices have risen at sustained, high rates over the last 5-7 quarters. The price of every kind of commodity in the world, including steel, aluminum, and plastics, increased. Even the import and export logistics increased. Although the price of raw materials has partially decreased, no significant impact has yet been noticed. There is a lot more cooling that needs to occur. Regardless, Cosmo has continued to deliver great results in terms of growth and EBITDA each quarter.