In end-October 2017, The Packman met with Anantshree Chaturvedi, vice chairman and chief executive officer, Flex Films International – the global film manufacturing arm of India’s largest multinational flexible packaging materials and solution company Uflex, at the Noida office. Speaking about the key strategic priorities for Uflex currently, Chaturvedi said systematic consolidation is one of the main priorities. During last couple of years Uflex has done a lot of work to grow by projects. “We have developed several new projects and expanded our film manufacturing footprints at strategic nodes across the world to maintain proximity with our customers and offering just-in-time deliveries. Uflex truly has a global multinational presence. Right now, one of our key strategies is to consolidate these assets and start going from a project-based thinking to a product-based approach,” said Chaturvedi.
According to Chaturvedi, Uflex is going to be very product-focused and supply unique products to the markets that want to receive them. “Uflex is now going through a shift wherein we are not looking to expand on a commodity volume play. This is a paradigm shift and we would rather focus on expanding on the basis of the products and associated specialties,” said Chaturvedi.
I would rather have 100% of the strong niche product-centric market and 80% of the small market than 10% of a large commodity-driven market. This is the real shift in our strategy – Anantshree Chaturvedi
Uflex is also looking at how to support its existing businesses like holography, engineering as well as its new business initiatives like liquid packaging (Asepto), which are low to medium in terms of volume but deliver high margins. “Giving these businesses the right kind of support they need right now where they are growing very fast while at the same time giving a different set of management tools, support, and building a different set of competencies for our other businesses which are much more mature – like converting, BOPP, PET, CPP film production etc. – is really important. The company is looking at how to tread on this front to support its various businesses that exist under one unified umbrella,” said Chaturvedi.
Chaturvedi said that Uflex is not looking at gaining market share and is rather focusing on profitable growth. Packaging today as a business is quite fragmented and has many companies fighting for the same share of the pie. The product range hitting store shelves and the number of products that are under a particular country’s ecosystem is huge. Even countries like India, Bangladesh and Pakistan that have a lot of similarities in tastes, likings and consumer preferences have a very wide range of products because of local brands and penetration. “Because these markets are so varied, a strategy to penetrate through lowering prices, achieving market share and then jacking up the price like how airlines have done in the past or may be what they are currently doing in India may not really be valid anymore. Any company which bases its business model on this strategy is doomed to fail. End customer switches to another company extending the same set of courtesies the minute you jack up the price. So our growth strategy today is not market share driven but profitable product driven,” explained Chaturvedi. “Profitable growth, I have often seen comes in lieu of market share where you can drop prices and expand volumes.”
“I am seeing growth in very specific niche sectors of the market where Uflex enjoys dominant presence and supplies products that are unique to the market. Classic examples here would be lens holograms and high barrier substrates that we have recently engineered with unmatched OTR and WVTR. I would rather have 100% of the strong niche product-centric market and 80% of the small market than 10% of a large commodity-driven market. This is the real shift in our strategy. Our current top-line is around Rs. 6500 crore. However, with all the new product innovation that we are doing, by 2020 it should be around Rs. 9000 crore. What you are going to see in this Rs. 9000 crore top-line is actually a far healthier bottom-line! I cannot comment on the exact numbers but my expectation is that the bottom-line will be a lot more solid, which will allow for more growth in the future. It will allow for more profit reinvestment in future than revenue recycling,” concluded Chaturvedi.
Mahan J Hazarika