Moldtek enters food, FMCG packaging market

With the launch of its new packaging technology, Moldtek wants to garner support from FMCG majors

Hyderabad-based pail packager Moldtek Plastics Ltd is entering the food & fast-moving consumer goods (FMCG) packaging market, estimated to be between Rs9,000 crore-Rs13,000 crore, with its newly launched ‘In Mold Labels’ (IML) technology.

“The ice-cream packaging market alone is worth more than Rs150 crore and even if we grab 30% of that, we can add Rs30 crore-Rs40 crore of turnover in the next one year,” said A Subrahmanyam, deputy managing director, Moldtek Plastics.

Apart from the domestic market, Moldtek is planning to expand its horizons to the food & FMCG sectors in the Middle East and Asia Pacific regions. Moldtek is also eyeing IML exports to the EU, USA, Japan and other developing countries, due to its low-cost advantage.

IML allows print and labels to be impregnated directly on products with the help of a robot. In this process, the label becomes an integral part of the end product which cannot be torn or scratched off. 

The packaging industry currently uses sticking gum to brand products. IML technology is already popular in the EU and Taiwan. Although this technology was launched by the company eight months back, manufacturers shied away from adopting this packaging technique due to its high cost.

Moldtek Plastics has now re-started its negotiations with major FMCG players like Amul and Hindustan Unilever Ltd. The company claims to have brought down the production cost by 50% but it is too early to predict whether FMCG players will adopt the technology, considering that Moldtek Plastics will be charging a royalty of 10% on IML. Moreover, any hike in raw material costs is likely to increase the production costs as well.

Apart from manufacturing robots in India, the company is also planning to invest Rs12 crore every year for the next three years which would be raised through internal accruals and term loans.

During the quarter to end-December, the company reported a net profit of Rs1.87 crore on total revenues of Rs29.43 crore.
 

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