Prakash Group is a diversified conglomerate with business interests in steel, mining, PVC pipes and fittings, internet services, and flexible packaging. “Our relation with plastic and plastic products dates back 40 years, with the start of PVC pipes manufacturing. As our country progressed, we found many opportunities that were made a reality by the entrepreneurial spirit of our chairman, Shri VP Agarwal,” says Kanha Agarwal, managing director of Prakash Group.

The company has invested around Rs. 80 crores so far to build a capacity of 14,400 MTPA including backward integration into captive ink plant, cylinder plant, blown film plant. In the current FY, the company is investing a further Rs. 20 crores to take the capacity to 19,200 MTPA.

“Our investment in the next phase will be focused on value-added products such as pouches, new product development, and consolidation such as system integration, efficiency improvement, cost optimization,” says Agarwal.

Agarwal adds, “Our flexible packaging division is growing at a fast pace. We have grown from 50 MT/month to 850 MT per month in the last two years. I believe we are able to onboard and retain customers because we are able to provide quality products with timely deliveries. We do not chase volumes. Instead, we focus on gaining customers’ confidence. Within four months of starting this division and in the very first audit, we received BRC-IoP, ISO 9001:2015, and ISO 22000:2018 certifications, which are in conformity and continuity to date. This has been possible because we had the vision from the beginning to create a state-of-the-art plant with a primary focus on quality and systems.”

Flexible packaging journey

“Four years ago, we were looking to grow further in the plastics industry after we saw an ample opportunity in the flexible packaging industry. The growth of the packaging industry is directly linked with the growth of its customer i.e. FMCG, FMEG, pharmaceuticals, and food and beverage, which has been growing at over 15-18% annually. We further realized that as the economy shifts from unorganized to organized sectors, demand for packed, hygienic products is bound to increase. Being the second most populated country, India still has one of the lowest per capita consumption of plastics at ~12 kg, whereas China’s is ~39 kg, EU ~65 kg, USA ~109 kg. With this view, we made a humble beginning with one converting line. We had decided from day one that our focus will be only on the organized segment, with best-in-class equipment, processes, and product quality.”

Pandemic and the future

Agarwal says, “The flexible packaging industry is one of the few industries which recovered fast during the pandemic last year. Demand was robust as consumers were stocking up. We have been running at 100% utilization levels, with orders exceeding our capacity. We expanded our capacity in the second half of the year, added more brands to our customer portfolio, and even increased exports to 15% of sales.

“However, this year, the second wave has been more painful for everyone as Covid spread deep into every household. As the situation is improving, we are seeing gradual improvement in demand.”

Agarwal believes that in the next year, FMCG, F&B, and the packaging industry will witness a major demand supercycle. “With the majority of the population getting vaccinated, economic activities will start normalizing. Schools, universities, other public places, and tourism will start functioning again, which will bring exceptional demand for packaged products,” he says.