Identifying India’s growth markers
The growth of housing developments in India is set to drive the paint can market
Saket Bhatia, president of Delhi-based can manufacturer, Hindustan Tin Works, discusses the opportunities and challenges for India’s three-piece market with Alex Rivers
All images courtesy of Hindustan Tin Works
Hindustan Tin Works is one of the leading companies in three-piece can making. Established in 1958, the Bhatia family acquired the company in 1977, with Saket’s father, Sanjay Bhatia, taking over the role of managing director.
Originally, the family’s operations involved trading in tinplate. Saket explained that Hindustan Tin was a customer of the family venture, but eventually the opportunity arose to buy the company.
The 1990s was a pivotal turning point for the Bhatia family, as the leading can maker in India at the time – UK-based Metal Box – went bankrupt. “This meant that homegrown companies such as us started to receive opportunities from bigger customers like Nestlé, Heinz and other companies that were packaging baby food and infant and nutritional formula.”
This surge in demand allowed Hindustan to invest in automation, with Soudronic lines installed, as well as high-speed bodymakers – although Saket mused on how far this technology has come now. “In those days, a production speed of 70 to 80 cans per minute was considered impressive.”
The company still uses Soudronic technology for its bodymakers and slitters, and printing and coating lines from Crabtree. “The downlines are from a mix of companies depending on the application – some are from China and others from Asian countries,” said Saket.
“We also have a completely dedicated component shop and a dedicated in-house tool room. Overall, on the production floor, we have more than 80 presses making different sizes and different types of components, which are eventually fed onto the fabrication line and exported out of the country as a finished product.”
The company’s relationship with Nestlé in particular was strengthened in the mid-nineties, once Hindustan became a public company. Saket explained that “Nescafé cans used to be packed in India and exported to the European and Russian markets from here; India is one of the leading coffee- growing countries and Nestlé had a packing line in the south of India. To meet the demand for those cans, we had to raise capital from the public. We went for a public issue and in 1995, we established a larger, state-of-the-art factory in Sonipat (HARYANA).”
Saket joined Hindustan Tin between 1999 and 2000. He explained that, at this time, milk powder, baby food and coffee made up around 70 per cent of the company’s sales, so internally, a strategy was formed to not become so heavily dependent on only a few clients supplying these products, and instead expand the customer base.
“We also focused a lot on export of components, which initially represented only five to ten per cent of sales and now represent more than 25 per cent of company sales.”
The company has also announced building of a greenfield export components project close to the main plant.
“We have diversified into food cans, paint cans and aerosol cans. Other local products have been added to make our offering varied and to encourage more sustainable packaging choice,” he said.
In the year 2000, Hindustan also consolidated its factories into one plant at Murthal, to “lower costs and have better control, with everything in one place,” according to Saket.
Outside of India, Hindustan works with other can makers and some food companies with their own in-house can making lines. “We supply a lot of components, tops and bottoms and printed sheets which are assembled in their respective countries. That’s an area where we’ve been able to carve a niche. We supply to almost 25 countries now, including developed markets like the US, Europe, Australia and the Middle East.”
Three-piece market and product trends
“In the last two decades, we’ve seen a rapid shift toward cheaper packaging in many segments. Whatever is now remaining in cans is staying in them due to technical requirements, which only a metal can is able to fulfill, whether that is in terms of stability or shelf life,” said Saket.
“Having said that, I think an area driving positive growth in the three-piece market is processed food,” Saket continued, explaining that, with the middle class expanding, and people returning to work in-person, people in India are finding less time to cook and so food in cans is becoming more preferential.
Decorative cans for traditional sweets, which are gifted to celebrate, for instance, Diwali or Holi festival, are also “doing very well” after Covid-19, Saket noted. The travel and tourism industry took a big hit during this time, but now “international travel is at an all-time high,” he said, despite higher travel costs. However, gifting and “the duty free side” of this is something can makers could focus more time on, Saket commented, as India’s volumes of metal packaging are “very low” for duty-free p ckaged products.
The aerosol can market, however, has grown more than double digits during the last few years, said Saket, who noted that it continues to grow “because affordability in India is improving. More people have disposable income, and aerosols are considered premium products in India.”
The paint segment is also burgeoning. “Because India is now a developing economy, the government is really putting a lot of trust on infrastructure. Development and even housing societies are gaining traction, and more roads are being built as well, so there’s a lot of action from that side, which is going to drive paint consumption in the country,” said Saket.
Regarding consumer perception of metal as a sustainable packaging material, he believes that “a lot of awareness still needs to be created. India remains a cost-driven market,” and brand owners continue to launch products in cheaper materials like plastic and paper. However, Hindustan is constantly working on informing brand owners of metal’s sustainability advantages. Indeed, Saket’s father, Sanjay Bhatia, holds the position of president at the Metal Container Manufacturers’ Association (MCMA), which promotes the benefits of metal containers and their associated products in India.
Challenges & moving forward
In scrutinising the market, Saket commented, “As a can making industry, I think what we are lacking in India is the availability of technology and machinery players. In terms of growth, I would encourage machinery manufacturers to look at localisation. The lead time, cost and effort of working with overseas suppliers takes a toll on development, and some companies even fly in engineers still just for basic service, so local support and local availability of machinery is one area that has great potential to help save costs and aid in business growth.”
For Hindustan, “new shapes and sizes on the decorative side are always encouraging to look at,” Saket said. He added that “easy open ends (EOE) for food cans are still being imported, but imports have been curbed by BIS regulation in India, which has disturbed the supply chain substantially.”
The Bureau of Indian Standards (BIS) regulation authority states that can makers cannot import any component unless BIS approved tinplate/TFS is used, Saket explained. “While it has created huge supply chain constraints, I think this also creates opportunities for entrepreneurs to localise the components which were being imported, and primarily, easy open ends is an area the industry should be looking at for this. Hindustan Tin has recently installed new machines to produce domes and cones for the aerosol segment which was being earlier managed through imports to meet the BIS regulations.”
“Having said that, again, the challenge will always be to work with overseas suppliers, which has its own limitations and service cost. Unless the scale is there to sell the capacity, this will never be viable, so one must make a calculated call.”
Saket concluded by noting that his other business venture, Innopac, (Innovative Packaging Solutions, established in 2019) – manufacturer of crown caps – is currently increasing its capacity, having recently been qualified with Coca-Cola. “We are making further investments there and looking to innovate with metal closures to create even more opportunities for this company,” he said.
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