Understandi

ng Flexible
Packaging
Presented to
Mr. Amir Younus
Chief Executive

Business Dynamics (Pvt.)

Ltd
From
Zubair Jilani

Abstract:
Globally the packaging industry is considered as 2nd largest sector of the FMCG business
domainit offers consumers an extensive desirable characteristics it is easy to see, why?
From the ease of handling and storage, overall cost savings and convenience flexible
packaging has cemented itself in the packaging world, and has absolutely been a key
contributor to packagings continued success.
Pakistan among International marketer has been framed as large populated country of over
180 million. The annual population growth rate is 3-4%, which is expected to get double in
next 20 years (approx). It has a growing middle class of approximately 30% -40% (approx 60
million of population). Despite the fact of poor law & order situation and the energy crisis,
countrys economic conditions have been improvised in the past decade which led to a
competitive and busy lifestyle particular into Metros of the country.
Consumerism
The consumer of today lives in a fast-paced world that is dramatically different from just a
decade ago. Every single consumer is looking towards the future, for products and packages
that can accommodate their busy lifestyles. To meet their needs, exciting visual and
functional features are being added, one of new trend in the packaging arena is the
development of Pillow Pouch Stand-up Pouches, usage of Shrink Film/Stretch Films,
etc., these designs to add consumer convenience, build brand identity and address the
product.
This pattern and trend have encouraged our economy to spill over in the demand of fast
moving consumer goods (FMCGs) etc.. This trend sufficiently met by various local and
multinational FMCG being engaged in the production and distribution of FMCG Packaging
related products, particularly to MNCs which plays a vital role in the packaging sector as
consumer awareness coupled with the social responsibility massages that encouraged Local
FMCGs to improve the quality of packaging of consumer product as per their international
standards. Though many of the local FMCGs have been converted from the Conventional
styles of packaging, but many are of them still follows as a rule of thumb such as Tin
Containers and Low grade plastic materials which are health hazards due to the presence of
toxins in the raw materials and poor shelf life.

Per Capita Consumption:

As compared to developed economies like China, Germany and India, which have packaging
level consumption per person per annum of 20kgs, 42 kgs and 10 kgs respectively. Pakistans
consumption is at a low 3.7kgs per person p.a. therefore, there is a huge scope for
innovations, entrepreneurships and logistical advancements. Initiatives are required to
convert the large unpacked commodities into packed, processed and well presented goods.

Retail Growth

Zubair Jilani
24 April, 2014

Growth in the retail sector and increased consumption of consumer products provide a boost
to the packaging sector, which further stimulates the demand for plastic packaging materials.
The Pakistan retail market has experienced high growth over the past 15 year with a gradual
shift towards modern retailing formats
According to my least knowledge, the Low organized retail penetration is at 80% indicates
huge growth potential for this market
Pakistan is one of the most lucrative consumer markets in the SEA region carrying 180 million
of population with a growth rate of up to 5%.
Per capita income is expected to grow from USD 100-125 in 2014 which will translate into
increasing expenditure along with rising purchasing power More than 180 million shoppers are
expected to shop at organized retail chains by 2020.

The Industry -Flexible Packaging

Needless to mention, that the Pakistan Plastic Packaging industry is growing at an exceptional
pace. Packaging is an integral part of many sectors across the country and across sectors.
According to sources available, that the total plastic packaging industries in Pakistan at
present at USD 260 billion and by 2016 this is expected to rise to uptill USD 400 billion. The
packaging industry was growing at a healthy rate of 15%p.a. while the global growth rate of
packaging was 5% p.a. This favorable condition has led to increased costs of imports, creating
opportunities for domestic players to generate higher revenues.
Since the creation of flexible films, the packaging industry has been propelled to astonishing
heights. Through the development of these films/laminates, manufacturing and constant
innovations, the field of packaging has been able to grow and evolve to adapt to the needs of
products around the globe. Due to flexible films many desirable characteristics, the
implementation of various manufacturing methods and polymer additions provides the means
to increase appeal to a broad spectrum of products. Flexible films have an illustrated history
in packaging, and there are continual enhancements and improvements, as well as new
products being marketed.

The Key Players

For more than a decade in Pakistan the popularity of flexible packaging films has increased by
approx. 15% growth every year. Using of it as a replacement from Conventional type of
printing/production, is largely based on the continuous push and technical advancement
contributed by the renowned local players few can be named as Packages Ltd., a leader in
the packaging industry for decades, by having its own line of extrusions plus the largest
printing set-up in Pakistan gives Packages Ltd Lahore an edge to retain as the major market
share loaded with all major chunks of Local and MNC clients. The other major film
contributors are Master (having own CPP extrusion), Austropack (Dealing in CPP/PET), Tripack
(producing BOPP), Novatex/Gatron (PET/BOPet), MacPack (dealing in CPP/BOPP), Metatex
(Deals in Aluminum Foil/Metalized Products) and Kompass Pakistan PVT Ltd., gradually striving
to increase their market share. The rest of the market depends on a huge
number of converters deals a large number of customers and fulfilling market
Zubair Jilani
24 April, 2014

requirements, naming as Lucky Plastic, Fazli Sons, Syma Plastics Polypack, Marriott Packages
etc. that undoubtedly have played a key role towards strengthening the industry.

Use of Films
The common use of these films is BOPP and CPP, PET, PE, PVC Rigid, PVC/Nylon Shrink, AlFoil, Metalized films, etc. BOPP is most used for packaging snacks and confectionery items
while PET is more suitable for packing Biscuits. Well, these films are used as a Skin, the PE
and CPP are mostly used as laminates as having high sealing properties that protect leakage of
air, moist or liquids. PVC and Nylon base Shrink films are mostly used for high quality shrinks
or blister.
Key Drivers and Challenges:
Drivers
Demand from packaging industry
Growth
sectors

in

associated

manufacturing

Strengthening of Rupee value

The per capita income continue to grow at
10%
Overall 700,000 trained labor in Mfg. units

Challenges
Rise in Petroleum Prices
Lack of Power Supply
Uncertain democratic, poor law and order
setup make hesitant International investor
Low per capita consumption of polymers
estimated @3.7 per KG lowest in the
region
Growing need of new equipment and
machinery

Demand of Eco-Friendly Packaging

Importance of value equation

Cost Pressure

Price Sensitivity

-The key driver behind the scene is one of the largest and fast growing Pakistani
middle class population in East Asia region at 35%-40% and the growth of the organized
middle sector has spiraled the growth of the packaging industry.
-The retail market in Pakistan is also become the 2 nd largest zone in the subcontinent.
Due to its strategic location, Pakistan has been considered as the 2 nd most favorite
emerging market destinations after India.
-There are approximately 6000 plastic packaging companies nationwide, producing
approx 624K MT out of which only Flexible films contribute 300K precisely. This 624K
MT includes import, manufacture raw materials, machinery, supplies and additional
persistently materials. The processed food manufacturing industry shares a major
chunk of 48% to the consumption of flexible packaging material. Personal care,
pharma, and Misc constitute the rest.
-The plastic packaging industry in particular has registered a growth of
15% considerably higher than India. The flexible packaging industry has
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24 April, 2014

been constantly developing innovative packaging solutions for many sectors and
applications.

QA/QC:
Before the advancement of the industry the quality assurance of packaging was lagging
behind, but now it is no more so, and domestic packaging is now in the reckoning with
packaging of international standards. Importantly, packaging these days becomes a
fundamental part of creating brand value. With flexible packaging, manufacturers are to a
greater extent influencing it to match their products and its specifics.

Market Expension:
Over the past few years following trends have been observed:

Improvised marketing offers for polymer buyers

Shift towards gas based production units
Usage of polymers in the medical sector
The marketing efforts of the manufacturers concerned
Acceptance and increased demand from the consumer
Growing demand of producing biodegradable plastics

The packaging industry is an extremely competitive one. The industry is predictable to

register further growth fuelled by demand for higher barrier films and coatings for longer
shelf lives of products packaged. Also a trend in the food industry of going away from bulk
food packaging to single-serve products will also be an advantage for the packaging
manufacturers.
Rising income levels are encouraging the growth of organized retail which is also increasing
the demand for innovative and attractive packaging concepts
1

ECO Friendly Biodegradable Market

From recent past, the world is becoming more conscious about the hazardous effect of plastic
bags on the environment. To support this, researchers have come up with natural option of
Bioplastics. Plastics are being used all over the world. Right from drinking cups to parts for
automobiles. Plastics are extremely important to the job market as well as for packaging
throughout the world. Since plastics are involved with peoples everyday lives. Therefore the
production of biodegradable plastics to make plastics more compatible with the environment
has become necessary.
Bioplastics are either biobased or biodegradable or combination of both. Plastics are a vital
asset to humanity, often providing functionality that cannot be easily or economically
replaced by other materials. Most plastics are robust and last for hundreds of years.
As resources are limited and human wants are unlimited, it is important for the
marketers to utilize the resources efficiently without waste as well as to
achieve the organization's objective.
Zubair Jilani
24 April, 2014

Green Marketing The Future

There is growing interest among the consumers all over the world regarding the protection of
the environment. Worldwide evidence indicates people are concerned about the environment
and are changing their behavior. As a result of this, green marketing has emerged which
speaks to the growing market for sustainable and socially responsible products and services.
Thus the growing awareness among the consumers all over the world regarding protection of
the environment in which they live, People do want to set down a clean earth to them.
Key Challenges Bio Degradable/Green Marketing
Based on my best knowledge and experience, what I have found that only 5% of the marketing
campaigns are communicated, but unable to proof due to the fact that there is no
standardization to authenticate these claims.
Plastic pollution is a major concern to environmentalist all over the world, therefore there is
a huge demand for bio-degradable products in the industry today. Since the inception of
Consumerism, Retail market use a large number of plastic bags every month. Using our
biodegradable bags they will be able to contain the pollution to the environment by a great
percentage.
As per the recent R&D conducted by a renowned international consultant, following work has
been taken place to develop accordingly:
-Biodegradable Plastics: Its collide due to bacterial infection.
-Oxo-degradable (D2W) Bags: Thermal / Light degradationcan be degrade at the
appointed time.
-Degradable/Compostable Plastics: A recipe of both.
Nevertheless, these degradations are also depends on location of disposal site and so to
degradation age. Important to note, that the degradation period one cant compare similar to
degradation of a tree leaf.
One of the unique benefits of using D2W technology is that d2w plastics can be engineered to
start to degrade in as little as 60 days or as long as 5 - 6 years, depending on the
requirements of the product.
Unfortunately, due to poor will there no standardization policy currently in place to certify a
product as organic. Unless some regulatory bodies or any Environmental Protection Agency
should get involved in providing the certifications, there will not be any verifiable means.
A standard quality control board such as PQCA needs to be in place for such labeling and
licensing.
The consumer and customer both needs to be educated and made aware of the environmental
threats regularly.
The investors and corporate sector, both should view the environment as a major long-term
investment opportunity, as a marketer I suggest we should look-into it as longterm. It will require a lot of patience which eventually will convert into results.
Zubair Jilani
24 April, 2014

Like having said its new concept and idea, it will have its own acceptance period.

Key Suggestions to promote D2W:

In order to increase and encourage the demand of D2W share, I would humble suggest that we
should simply adopt following as to our core strategy:

Educate customers:

To let Customer what they do and what to do!

Being Truth & Transparent:

What we claim is genuine.

Reassure the Consumer:

To create a sense of believing.

Play with Pricing Strategy:

????

Government Pressure:

Push them for a meaningful support.

That is all at the moment; however any feedback or comment will be highly welcome.
Thank you for your time and patience.
Yours sincerely
Zubair Jilani

Zubair Jilani
24 April, 2014