A sense of nostalgia
Opening 18 months ago, Hong Kong-based GM Metal Packaging’s new plant is located in Hanwella, situated 30km east of the Sri Lankan capital, Colombo. The factory has been built and equipped to produce a wide range of decorative cans. New equipment includes a two-colour Crabtree printer and coating machine and a Meltog 500 automatic body maker and seamer. Ovens and stamping equipment have been imported from China.
GM Metal’s Hanwella factory has started up producing a range of three-piece tinplate tea caddies and other decorative cans used to fill with nuts, spices and other dried foods. Around 100 staff are employed by the plant at present, some of whom have worked for Sri Lanka’s other can manufacturing companies producing food, beverage and general line cans.
The Sri Lankan work force has been quick to learn and staff take pride in their workmanship, according to GM Metal Packaging’s managing director, Sunil Gidumal.
“It took two months for us to reach export quality. The idea was for us to supply the local market first and then build up the export market on smaller runs until we got export quality production established,” he explains. “We thought it would take six to eight months, but after about two months the quality was the same as our China plant for body forming.”
With production quality in the Hanwella factory already at the same level as the firm’s plant in China, GM Metal now is looking to raise productivity in its Sri Lanka plant to the same level as its China operation. The company aims to increase the volume of decorative cans being supplied to new customers in Sri Lanka as well as longstanding clients in Europe who buy a range of decorative cans and caddies to pack tea and other high end gift items.
“Our Sri Lankan staff are concerned with can body colour and quality because of their personal pride, but production speed is slower than in our China plant right now,” Gigumal says. “We have taught each worker a production process. We have hired people with tin can production knowledge and then gradually trained our staff.
“There is still a way to go on production speed as on the manual lines there is a constant change of can body shapes. Now we try to train the workers on different body shapes; we expect this to take another 12 months.”
GM Metal Packaging has introduced a new range of decorative cans and tea caddies especially designed for the Hanwella plant’s local and export customers. Currently a collection of 12 different decorative can and tea caddy shapes and sizes are offered that are designed to hold contents ranging anywhere from about 25 to 500 grams.
Plans call for the tea caddy collection to be expanded as local business grows and GM Metal’s sales team gains a better understanding of Sri Lanka tea exporter’s premium packaging requirements. A number of can designs are available decorated with embossed patterns, Gidumal remarks, noting GM Metal Packaging taught local toolmakers how to make embossing tools so that tooling requirements can be sourced locally.
“We have had tools made for our Sri Lanka plant. We make different can shapes there compared to our China factory,” Gidumal says. “The major industry we supply in Sri Lanka is the tea industry. Our three-piece tea caddies are all made of tinplate.”
In additional to teaching local toolmakers how to supply its tooling requirements, GM Metal Packaging has instructed local plastic manufacturers in how to produce plastic accessories and fittings that are attached to some of its cans.
Gidumal notes that Sri Lankan exporter customers can now claim their packaged tea, nuts and spices are produced completely in Sri Lanka.
“Some tea companies here used metal packaging that other companies supplied before we set up here. So, we are introducing new can colours and shapes that they did not have here before. Now more local companies are looking at caddies for packaging,” Gidumal says. “Also, customers from Spain and India are coming for metallic colour tea caddies to put labels on. The majority of the caddies we sell are for tea, but some are for filling with nuts and spices such as cinnamon sticks and cardamom.”
Meanwhile, GM Metal Packaging’s Hanwella plant presently is recovering from flood damage after torrential rain recently caused a nearby river to overflow, overwhelming the factory for a week. The company is ramping up production as normal operations resume. In fact, the recent flood impact on decorative can production has coincided with a downturn in demand for tea imports in the Middle East and Russia. These together with India and some European countries are important markets for Sri Lanka’s tea exporters, a growing number of whom have started to supply tea in three-piece tin plate caddies since GM Metal started up local production.
“The Middle East and Russia are big markets for Sri Lanka’s tea exports but the oil price is down,” Gidumal explains, “The Middle East is buying tea in bulk while Russia’s currency has collapsed and they have cut the use of luxury packing such as our decorative tea caddies.
“We have had the flood and delays getting in tinplate from China. The market has picked up but delivery is slower because of the flooding effect. Also, some orders we have transferred to our China factory.”
Meanwhile, GM Metal’s decision to set up a factory in Sri Lanka follows a large increase in labour costs over the past five years in southern China, where the company’s main production plant is located in Dongguan city in Guangdong Province, about a one hour drive from Hong Kong.
Although GM Metal has tried to streamline production processes for various decorative can models, many designs involve expensive labour intensive production processes forcing the company to seek a new lower cost production base to transfer part of production from the company’s Dongguan plant.
“We have moved part of our production to Sri Lanka to be cost effective. We looked around and found Sri Lanka to be the better place to set up,” Gidumal says. “Costs have gone up in China, though the renminbi has weakened recently. Also, China does not permit the import of our automatic Meltog machine so we have decided to install it in our Sri Lanka plant.
“Labour is available in China but it depends on how much you want to pay. Wages were stable last year as all markets have been hit by the economic downturn.
“Previously wage costs in China were rising every year. During the past five years we have seen an 80 per cent increase in labour costs in local currency.”
GM Metal Packaging employs around 200 staff at its Dongguan plant which is equipped with 14 production lines that can produce up to 90,000 decorative cans per day depending on the can shapes being made and the number of shifts worked. Unusual can shapes are available as well for printing according to buyers’ requirements.
“Tea and coffee are still the big markets for decorative cans,” Gidumal remarks. “We have noticed the Asian coffee boom as we produce two cans fitted with gas release valves which allow gas from coffee beans to be released but do not allow air into the can.
“These one way valves come from the United States and meet international standards. Customers need to have equipment to seam the valves on and to gas-flush them.
“Most of the coffee cans are for the United Kingdom market. We are trying the United States but there is some resistance there as they use bags for coffee beans.”
GM Metal Packaging supplies customers in about 20 countries from its Dongguan plant. The two largest markets are the United Kingdom and Germany. Export orders have slowed over the past 18 months due to adverse economic conditions affecting consumer spending in various countries. Gidumal observed that buyers generally are more cautious and place smaller orders than previously as many prefer to hold reduced stocks in present market conditions.
Meanwhile, nostalgia is back in fashion in many countries as consumers choose classic decorative can designs from a bygone era.
“We have seen a trend to the old fashion design look – right angled with a curled-in base and flush fitting corners; this is the nostalgic look from the post-war 1950s,” Gidumal says. “Some of the shapes then looked really good. They have not been copied since as they are expensive because of the tooling and the steps needed to produce those shapes.
“Now some customers want those shapes but not in large volumes for chocolate, tea, cookies and liquor such as whiskey. We are recreating what has been done years ago. All our markets are looking at these designs.”
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