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Business opportunity: Flexible Packaging

Flexible packaging refers to packaging that can take various shapes and forms. Most commonly used flexible packaging products include chips packets, milk packets, shampoo and medicine sachets and different types of pouches.

Flexible packaging is a large industry world over, with a size of over $ 200 bn[1]. The Indian market contributes over $ 5 bn and is growing in double digits. The key end user industries are food products, beverages, personal products and pharmaceuticals (see pic-1).

Picture 1: Indian Flexible Packaging Market

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  1. * Others includes pharmaceuticals.
  2. Source: Investor presentation of Uflex

 What is the Technology?

The technology related innovations in flexible packaging industry have focused on increasing the shelf life and safety of the packaged product and protecting it from counterfeiting.

Flexible packaging is made of layers of polymers (LDPE, BOPP, BOPET, CPP), aluminium foil, paper and other material. The topmost layer (most commonly BOPP or BOPET) is printed. The printed layer is laminated along with other packaging material, and then slit into different sheets. These sheets are converted into different forms as per the client requirements. The choice of material depends on the end use; for example in food applications where the shelf life has to be extended, different types of polyethylene and poly propylene films are used.

The printing technology varies depending on the material to be printed, and has been explained in the figure below.

Picture 2: Printing technology

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How is the Competitive Landscape?

The industry has two types of players, large players who manufacture packaging films as well as packaging products and SMES who mostly purchase the films and convert it into packaging products. Further, some of the SMEs are manufacturers of machinery or inks.

Table 1: Flexible packaging-competitive landscape

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What are the Prerequisites to start a Flexible Packaging Industry?

The must haves would include a strong technical team that can meet client’s quality expectations, create innovative products and minimize wastage.  Other requirements include land/area (minimum 5000 sqft for Rotogravure printing) and a budget of Rs. 5 crs upwards.

How can we help you?

We can help you start a flexible packaging business through a number of services including business viability assessment, market landscaping and expert consultation.

Reach us:

bchhatre@finetrain.com

Phone:800 888 4932

 

[1] Source for international and domestic market size is Uflex investor presentation -November 2016

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Business opportunity: Medical Devices sector

Medical devices refer to devices and consumables used by the doctors and hospitals in patient care. It is a multi-product industry comprising consumables, surgical instruments, implants and diagnostic reagents. The industry size is estimated to be INR. 30,000 crores, with imports accounting for 70 per cent of the industry turnover. The industry is growing in double digits.

The sector offers huge opportunity for entrepreneurs to offer cost competitive products that can reduce our dependence on imports and make healthcare more affordable and accessible to all.

What are the key segments?

The market can be divided into four categories, as shown below

Picture 1: Indian Medical device Industry

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Source: Recommendation of task force on Medical Device sector in India-2015

Who are the large manufacturers?

The Indian market is dominated by international players such as Abbott Vascular, GE health care, Phillips health Care, Medtronic, Johnson and Johnson, Siemens, Baxter, Stryker, Zimmer holdings and many more.

Among the Indian manufacturers, there are around 800 companies, majority of them are present in price competitive consumable segment.  Some of the interesting Indian players who have been able to offer technology based differentiated products are as under. (See table 1)

Table 1: Medical devices manufacturers-interesting companies

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Where is the opportunity?

The equipment and surgical segment and implants offer attractive opportunity for manufacturing indigenous products that can reduce our import dependence. These segments have been described in the table below.

Table 2: Attractive segments- Medical device industry

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The opportunity can be broadly be divided into two categories:

  1. Manufacturing Products similar to already existing imported products: For example: surgical sutures, dialysis machines, ECG machines, patient monitoring systems etc. Indian companies can offer more cost effective diagnostic equipment or an implant
  1. Opportunities to create new products that are not available in the market before For example- Cost effective diagnostic solutions for poor and rural population. Some of the companies that work in this area include Forus health care (Eye screening devices) and Biosense Technologies (cost effective solutions for checking blood sugar, anaemia etc).

What are the challenges?

As per Dr. Ashutosh Mundkur, a senior medical device industry professional and start up mentor, a medical device start-up faces following challenges:

Inadequate market research: The market assessment about the need for the device and its ability to either cut the healthcare cost or improve user experience has to be clearly established. Many companies discover their inability to sell the product after they have launched the product in the market

Lack of adequate attention to quality and safety aspects of the device: Many a time’s start-ups are too focussed on reducing the cost of the device to make it competitive Vis a Vis imported products and do not pay enough attention to the quality aspects.

Regulatory hurdles: There is lack of clarity on license required for manufacturing medical devices. As per the current regulations, the CDSCO license (Central Drug Standards Control Organisation) is needed for 14 notified devices[1].  For the remaining, it is left to the state Drug controller office/CDSCO to decide whether a license is needed. However regulatory hurdles are expected to clear after passage of new medical device regulation, which is currently under review and awaits parliamentary approval

Funding: Investor interest in early stage medical device start-ups remains low, due to uncertainty about the device’s potential to make it big and long development time. Some of the funds[2] that have invested in health care start-ups include Avishkar, Acumen, Centre for innovation and entrepreneurship (CIE, IIMA), Unitus, Venture East and Viligro

Conclusion 

With the rising disposable incomes and increasing longevity, the demand for better health care is only going to rise. Medical devices are instrumental in making health care more affordable and accessible.  The ecosystem for the medical device companies is expected to improve with government’s effort to promote manufacturing in India.  As such, growing demand and improving regulatory outlook, make medical device manufacturing a very attractive segment.

How can we help you?

We can help you start a medical device manufacturing business through a number of services including business viability assessment, market landscaping and expert consultation.

Reach us:

bchhatre@finetrain.com

Phone:800 888 4932

[1] As per drugs and cosmetic act fourteen devices are notified as drugs. In addition, eight products including Blood Grouping Sera, Ligatures, Sutures and Staplers, Intra Uterine Devices (Cu-T), Condoms, tubal Rings, Surgical Dressings, Umbilicalfapcs, Blood Component Bags also require drug license.

[2] Source: https://yourstory.com/2013/09/ventures-investing-in-indian-healthcare-sector/

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