E-WASTE RE-CYCLING – BUSINESS OPPORTUNITIES

E-waste typically includes discarded computers and components, cathode ray tubes (CRTs), printed circuit boards (PCB), mobile phones, headphones, wires & cables, and white household goods such as liquid crystal display (LCD), plasma TVs, ACs, refrigerators etc.As per Industry body ASSOCHAM, India’s e-waste generation is likely to increase by nearly three times, from the existing 18 lakh MT per annum to 52 lakh MT per annum by 2020 at a compound annual growth rate (CAGR) of about 30%[1].

Figure 1: E waste across cities and categories

Despite increasing number of registered recyclers/dismantlers in the country and large volume of E-waste generated, only about 5% of it is processed through formal sector. The remaining is either donated or goes to Kabadiwallas.For example, although Hyderabad generates about 32 000 metric tonnes of E-waste annually[2] the formal sector recyclers whose combined capacity is only around 20,000 tonnes do not get adequate waste.

[1]Source: The Hindu – article dated at June, 2016
[1]Source: ASSOCHAM-Frost & Sullivan study, April, 2016

The biggest e-waste recycling market in India is Delhi and approximately 30% to 40% of the e-waste in India lands there.

Process:

E waste recycling process can be divided into two parts; separation and size reduction of metals (aluminium/copper/steel) & plastics andextraction of precious metals. Majority of Indian E waste companies do not have refinery/precious metal recovery facility, due to high capital cost (over INR 8 crores for refinery of 1 tonne per day) and lack of adequate waste availability.

Figure 2: E Waste Dismantling Process

The quality of e waste also plays a big role in deciding the nature of recycling facilities. For example PCB (Printed Circuit Board) around which the business of E waste recycling revolves can be divided into various grades depending on the gold content. As per Umicore, a precious metal refinery in Belgium, the PCBs can be divided into four grades (Table1)

Table 1: Grades of Printed Circuit Boards
PCB  GradesAvailable in
low value (Gold content of 50 PPM or lessTV-boards, monitor boards, printer boards, cordless phones, calculators, shredded bulk material after Al-/Fe-separation  etc
medium value ( gold content of minimum 100 ppm)PC-boards, laptop-and handheld-computer circuit boards, etc.
high value (gold content of 200 ppm ore more)Circuit boards from mainframes, mobile phones, ICs, MLCCs
Source: www.umicore.com

Whilerefining is useful for high grade PCBs, for low/medium grade PCBS manual dismantling coupled with extraction of copper is a more viable option.

Current Players:

The total number of registered E-waste recyclers in India is 178[3]., whereas Hyderabad has 5[4].  Some of the large players are as under

[3]Source: List of Registered E-Waste Dismantlers/Recyclers in the country (as on 29-12-2016)
[4]Source: Telangana State Pollution Control Board

Table 2: National E-Waste Recyclers – India
NameHead QuarterActivitiesCapacity (MT/Yr.)Date of Est.
Auctus E-recycling solutions P Ltd.NoidaDismantling, Metal-Nonmetal separations, Plastic recycling218002011
E- IncarnationMumbaiData security, Refurbishing, Metal- Nonmetal recovery and disposal30002010
E-ParisaraaPvt. Ltd.BangaloreData destruction, Dismantling, & Precious metal extraction8820September, 2005
Earth SenseHyderabadDismantling, Segregation & Disposal> 40002000
Eco Centric Management P. LtdMumbaiE-waste management, CSR initiatives -donations, refurbishment.2500January, 2011
Eco Recycling Ltd. (ECORECO)ThaneE-waste recycling, EPR implementation72001994, Formerly InfotrekSyscom
Greenspace Eco ManagementDelhiDismantling, Refurbishing, Take back programs, etc.600002007
Ramky ewaste recyclingHyderabadCollection, Dismantling, Metal- Nonmetal recovery and Disposal10000
TES AMM IndiaKancheepuramE Waste Recycling, Takeback program300002005

 Capital Expenditure (CAPEX) for various options:

E waste recycling chain begins with a collection centre, which can be set up for Rs. 10 lakhs. However,standalone collection centres are not encouraged to register, unless they are being set up by a recycler/refurbished or an electronic product manufacturer.  A collection centre combined with a dismantling unit can be set up for around Rs. 45 lakhs.  In India, recycling is restricted to separation of Metal and Non-metal and granulation, as the technology for extraction of precious metal is not economical.

Figure 3: Capex required for Setting up aE waste processing unit

Regulatory requirements:

The industry is governed by e waste rules which specify the approvals and infrastructure requirements. The approvals need to be obtained from State pollution control body.

Table 3: APPROVALS
List of Approvals RequiredAuthorising BodyRemarks
CTO – Consent to OperateTelangana State – Pollution Control BodyThese are considered as pre-operations & establishment approvals.
CTE – Consent to Establish
One time authorisationSuch approvals also often have a validity period.
Certificate of registration & Proof of installed capacityDistrict Industries Centre.This is a common certificate of registration under any industry and serves as pre-requisite for approvals mentioned above.
Table 4: A GLANCE AT E-WASTE MANAGEMENT RULES (2016)
ParticularsCollection centresDismantling unitsRe-cyclersRefurbishers
Who can establishProducers/Refurbishers/Dismantlers/Recycler, standalone collection centre are not allowedAny Individual, Company, Society, they must have agreement with e waste generators/producers to procure e waste
ParticularsDismantling unitsRe-cyclersRefurbishers
Restrictions on certain operationsDismantling units are not allowed Shredding or Leaching of; Circuit Boards, Lamps, Cathode ray tubes CRTs, LCDs and Plasma TVs.None provided necessary infrastructure is in place. Not defined
Area required (per tonne of capacity)300 Sq. Metres.500 Sq. Metres150 Sq. Metres

Profitability:

The profitability of e waste recycling company depends on its access to waste and cost of waste. Cost of waste accounts for around 75-85 per cent of total cost of operations. The revenue depends on the quality of waste collected by the company. For simple dismantling operations, the estimated cost of waste and recovery per tonne is as under:

Table 5: Unit Economics of Dismantling 1 Tonne assorted E-waste
Sl.No.Material% Composition (by weight) Price INR/KGValue (INR)
1Mild Steel0.23153,450
2Stainless Steel0.08151,200
3Glass0.275.001,350
4Plastics0.2710.002,700
5Copper wire0.032006,000
6Aluminium0.03902,700
7Other material including precious material0.081008,000
8Hazardous Material0.01
 Overall value (INR)25,400
 Cost of waste (INR)20,000
 Gross Profit (INR)5,400
Source: Paper on Sustainable Electronic Waste Management and Recycling Process by S. Chatterjee, Department of Information Technology, Published in American Journal of Environmental Engineering, 2012

Other than the raw material cost, which has been discussed above, rentis another significant cost,Assuming a dismantling capacity of 5 tonnes per day, the area requirement @ 300 square meter per tonne of waste is 1500 square meters and rent can be up  to INR  3-5 lakhs per annum. Further, there are other fixed overheads such as labour and interest.   As such,one needs to process at least 3-5 tonnes per day, just to recover the costs.

Opportunities for a new enterprise

The e waste sector has grown at a slow pace over the last five years, largely due to lack of awareness about e waste rules,  absence of strict guidelines for disposal of e waste and challenges from the informal sector recyclers who are able to offer a better price for the waste. However, the regulations around e waste are expected to tighten and would bring unorganised sector into mainstream.

While opportunities for e waste recycling are only expected to increase in future, profitability would depend on the value addition done by the enterprise.  Therefore, aspiring e waste companies would also need to build skill sets in e waste segregation and in identifying reusable waste. We believe that

  1. Dismantling can be a profitable option if you are able to establish a network of waste collection centres and develop skill sets to identify reusable waste
  2. Setting up a refurbishing centre, where salvaged computers/phones can be repaired using new or old components should also be attractive.
  3. Recyclers would need a large network of collection centres or need to import waste to ensure capacity utilisation

How we can help you?

We can help you set up E waste recycling unit through a number of services including

  • Market viability assessment
  • Technical consultation and
  • Detailed project report preparation

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Fruits & Spices Processing Industry: Opportunities In AP & Telangana

The fruits and spices processing industry in Andhra Pradesh and Telangana is poised for a significant growth.  Bountiful availability of raw material along with positive policy environment that will build supply chain infrastructure is likely to create many new enterprises. This blog discusses the new opportunities, policy initiatives and funding availability for the industry.

What are the opportunities?

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Enabling environment 
Pic: 1 –  Food Processing Industry: Government Policy

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Note: Enclosed is a link to the Food Processing Policy of AP
Creation of Infrastructure for Food Processing Industry

GOI as part of its Mega food park scheme has sanctioned four food processing parks in Telangana. The details are as under

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Andhra Pradesh has SRINI Food Park in Chittoor, which is operational. Further, the state government has proposed to set up 8 mega food parks. Five of these parks will be located in the coastal districts of Srikakulam, Vizianagaram, Visakhapatnam and East Godavari. Three more parks are proposed in the Rayalaseema in Chittoor, Kurnool and Anantapur.

Funding for Food Processing Industry

A fund of Rs. 2000 crore has been created under NABARD to fund the term loan for food processing industry. The fund is available for food parks as well as units that are located in food parks. Key features of loan are as under:

  1. The loan is available to food processing units located in designated food parks[1]
  2. The list of activities that would be funded include fruits/vegetable/dairy/meat/aqua/herbs/nutraceutical/food flavours, colours, detailed list is available in the link here
  3. Maximum 75% of the project cost would be funded through term loan. Project cost would include site development/machinery/consultancy charges/capitalised working capital/pre-operative interest etc. If the individual is purchasing land (not leasing), 10 % of the land cost would also be included
  4. Term loan would be for a period of 7 years, The rate of interest would be linked to the prevailing interest
  5. Collateral would be required
How can we help you:

If you are interested in setting up a food processing industry, there is no better time than now. We at FineTrain can assist you in starting a fruit/spices processing unit. Our services include

  1. Market viability assessment
  2. Detailed project report preparation
  3. Technical support
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[1] Food parks and mega food parks promoted by Ministry of food processing, food parks/food processing industrial estates promoted by State governments, Food processing SEZ, Any other area that has related infrastructure and has been designated as food park, the MOFPI has provided a list of such entities

 

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Business opportunity: PET recycling

Ever thought about what happens to the cold drink/juice/mineral water bottle after we have discarded it. About 70 per cent of PET bottles are recycled and reused in textile and packaging industry.

India is one of the largest recyclers of PET in the world, next only to China. The industry is growing at a rate of more than 25 per cent per annum. India consumes around 800,000 tonnes of PET resins annually, around 70 per cent of which is collected and recycled. PET recycling business has a turnover of Rs 3,500 crore[1].

PET recycling business is concentrated in Maharashtra and Gujarat, textile and packaging hubs of the country. There are not many PET recycling units in Andhra Pradesh and Telangana. Given that both Telangana and Andhra Pradesh are bountiful in cotton and have identified textile as a focus sector, PET recycling can be an attractive opportunity.

PET Recycling Process

PET bottles are collected by rag pickers and eventually find their way in the recycling factories. Here the bottles are crushed to make PET flakes that are cleaned, cleared of other polymers, hot washed and dried. These flakes can be further processed into fibres (for textile) or injection moulded/ blow moulded for other applications.  The quality of PET is measured in terms of its purity (PPM, particle per million of impurities) and its hardness (Intrinsic viscosity, IV).  The quality of PET flakes is dependent on the input as well efficiency of the washing process.

Market

In India recycled PET (R PET) is not allowed for packaging of food items. The key end use applications of RPET include textiles, PET straps and home furnishing. Nearly 70-80 per cent of R pet is consumed in textile industry.

Products can be made from PET Flakes

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The industry players are of two types, PET flakes manufacturers and integrated players who process the flakes into fibre or other products. The table below describes some of the integrated players.

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Budget

A PET flakes manufacturing unit (comprising PET grinder and washing line) of a capacity of 300 kg per hour can be set up within a budget of Rs. 1 crore.  The land requirement would be around 1000 sft. One also needs to develop a strong network of/chain to collect PET waste.

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We can help you set up PET recycling unit through a number of services including market viability assessment, technical consultation and project execution support.

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[1] Source: http://www.petrecycling.in/ and Reliance industries presentation in

ASSOCHAM’s 4th National Conference on ‘Waste to Wealth

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Business Opportunity: Cold Storage

Cold storages are large refrigerated warehouses, commonly used for storing fruits, vegetables, processed meat, frozen foods and pharmaceuticals. Cold storages serve as an important link between farm produce and final consumer. The demand for cold storage services has been rising due to a growth in food and related industries.   There are over 7000 cold storages in India with a total capacity of 32 million metric tonnes, distributed across the country. A regional break up of cold storages across the country is given below.

Table 1: Cold storages in India

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 Source: National centre for cold chain development

Business models

Cold storages typically have two business models

  1. Food and Agri products storage: Cold storage stores items such as fruits, dairy, meat etc, which are required all through the year. The cold storage needs to be located close to the end customers and should preferably own some delivery infrastructure as well.
  2.  Off season products storage: Cold storage stores products such as chillies, potatoes, seeds for meeting the demand in off season. The cold storage needs to be located close to the source /originator of products. Majority of cold storages in India fall in this category.

A thorough analysis of market, key customers and business model is essential before starting a cold storage.

Machinery and profitability

The cold storage equipment has two important components: machinery and insulation panels. The machinery comprises compressors, evaporative condenser and motors. The walls of the cold storage chambers are fabricated with insulation panels, made of polyurethane.

Many of the cold storage machinery suppliers take up turnkey contracts and offer services to do civil work, install machinery and provide insulation. The cost of cold storage depends on a number of factors such as

  1. Capacity of the cold storage and the number of rooms/chambers in the cold storage
  2. Type of goods stored, typically divided into two categories: Plus temperature storage for vegetable/fruits/seeds and minus temperature for frozen products. The cold storages that offer facilities to keep frozen product would cost higher as compared to the plus temperature cold storage.

The key operational costs include electricity charges and manpower cost. Since both these are costs are somewhat fixed in nature ( electricity bill and manpower charges do not decrease/decrease in line with  increase/decrease in business volumes) the profitability of cold storage depends on its capacity utilization (ability to use its space optimally).

Budget

The cost of setting up a cold storage of around 5000 metric tonne would be close to Rs. 4 crores, excluding land cost. One would need around 1 acre of land to set up a cold storage of 5000 mt.

The subsidy for financing the cold storage  is available under the scheme from Scheme for Integrated Cold Chain and Value Addition Infrastructure under Pradhan Mantri Kisan Sampada Yojana

The  subsidy is calculated based on the cost norms that are provided in the scheme. For example the cost norm for single chamber cold storage are Rs. 8000 per tonne and the subsidy is capped at  35% of project cost. The project cost includes cost of machinery and technical civil work.

How can we help you

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Business Opportunity: Candy Manufacturing

Candy is a confectionery made with sugar or chocolate and flavored with fruits and nuts. Candies are popular with adults and children alike and constitute a large market of around Rs. 6,000 crore[1] which is growing at a CAGR of 14 per cent.   The market is broadly divided into two segments: Hard boiled segment (Mango bite) and soft toffee (Éclair). Hard boiled segment accounts for nearly 30 per cent of the market and is growing at 24 per cent.

While the market has a large number of national players (such as Nestle, Parle etc), smaller/local companies have also been able to grow as they are able to offer differentiated product and sell locally. Some of the Hyderabad based players are as under.

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Candy is manufactured by dissolving sugar in the water or milk to make syrup, the syrup is boiled until it reaches desired concentration. The syrup is then cooled and molded into different shapes. The hard boiled candy is boiled for longer time vis a vis soft candy.

Production Process
Picture: 1 – Stages Involved in Candy Production Line

Candy production line

Picture: 2 – Candy Making Unit

Toffee-Depositing-Machine

Budget

Machinery with capacity 2 Ton per day around Rs. 20 Lakhs and the total cost including Land, Labor and machinery cost will not exceed Rs. 40 Lakhs. The minimum land required to put this plant is about 3000 sqft and the area requirement will increase with increase in machinery capacity.

How can we help you?
  • We can help you start a candy manufacturing business through a number of services including business viability assessment, market landscaping and expert consultation.
  • We also offer support in executing your ideas by connecting you with sector experts and professionals.
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[1] Source: http://brandequity.economictimes.indiatimes.com/news/business-of-brands/ds-groups-pulse-candy-the-sweet-that-has-set-the-candy-markets-pulse-racing/51888159

 

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Opportunity in Tamarind Processing in India

India is the world’s largest producer of Tamarind, with a production of over 2 lakh tonnes[i]. Tamarind is cultivated in Karnataka, Tamil Nadu, Chhattisgarh, Kerala, Andhra Pradesh, Maharashtra and Telangana(See Figure 1)

How big is the market for Tamarind?

Majority of Tamarind production in India (1.5 lakh tonnes) is consumed in domestic market as dried Tamarind, Tamarind paste and pulp. Not just the fruit, even, Tamarind seed powder is extensively used in industries such as Textile, Paper, Confectionary, Cosmetics and Pharmaceuticals.

Domestic Market

In domestic market, Tamarind is mostly sold loose/ as a commodity, whereby shopkeeper weighs the required quantity and gives it to the customer.  The value added products such as Tamarind pulp and Tamarind powder are also sold in small quantities.

Tamarind prices in domestic market vary, depending on the crops output. The chart provided below depicts the average price of seedless Tamarind in the mandis across the country. Prices are lowest in the season (Feb to May) and then increase towards the second half of the year due to lower availability.

 

Source: : Spice board

Export Market

Around 50,000 tonnes of Tamarind is exported in various forms including fresh fruit, deseeded dry tamarind and Tamarind powder.  Product wise exports break up for Tamarind based products is provided in figure 2.

Source:  Director General Of foreign Trade

The majority of Indian Tamarind and related products are typically exported to Saudi Arabia, United Arab Emirates and Egypt.Many Indian manufacturers also do contract manufacring for Middle East based Tamarind brands such as SARAS Tamarind, AAHAA Tamarind, and HARITHAM Tamarind.

What is the investment required to set up a Tamarind processing unit?

Tamarind is a seasonal crop, harvested in January and February and has to be stored in ambient conditions to maintain its color. Therefore, Tamarind based businesses requires ample storage space and cold storage facilities. The budget requirements for various Tamarind based products is available in Table 1.

Table 1: Budget for Tamarind processing plant
ProductUsage / MarketMachinery Total budget
Seedless TamarindMostly used in food preparationsDehulling, seed removing machines, pressing  and packaging machinesThe budget including machinery for a capacity of 2 tonnes per day, working capital and civil constructionwould be over Rs. 1 crore.
Tamarind PulpMostly used in food preparations and beveragesTamarind pulping machine, heating and packaging machinesThe overall budget including the working capital would be around Rs. 50 lakhs.
Tamarind Seed PowderUsed for its sizing properties in different industries such as Textile, Paper, Cosmetics, Pharmaceuticals etc.Three types of machines: Tamarind roasting and skin removing machine, grinding machine and machines to process Tamarind powder into starch.For an integrated plant (with all three machines), the budget would exceed Rs. 1 crore.

How can we help 

We can help you start “Tamarind Processing industry” through a number services including business viability assessment, market landscaping, technical consultation andexecution support

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[1] Source: NHB, production figures are for 2014 -15.

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Business Opportunity: Animal Feed Manufacturing

India’s animal feed industry, currently valued at around $ 15 billion[1] is expected to double in the next five years.  The feed consumption is estimated to be 21.5 million tonnes, of which cattle feed accounts for 7.5 million tonnes, aqua feed 1 million tonne and poultry feed around 13 Million tonnes.

The state of Telangana and AP contribute to a large chunk of Indian feed consumption, as can be seen in the table below. Given the large size of the industry and its growth, it presents an attractive opportunity for small and medium enterprises.

Animal feed industry in AP and Telangana

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Competitive landscape of the Industry

The industry is competitive, with international, national and regional companies vying for the market share.  The table below provides information on important players in AP and Telangana.

Animal feed companies in AP and Telangana

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Manufacturing process and budget

The feed manufacturing operations comprise four steps; raw material preparation, mixing and grinding the feed, palletisation and packaging. The plant capacity typically starts from 2-3 tonnes per hour to 15 tonnes per hour.

Animal feed manufacturing process

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An automated plant with a capacity of 3- 5 tonnes per hour can cost up to Rs. 40 lakhs. Considering the machines and raw material inventory and infrastructure required to store the raw material, the budget requirement for the unit could be up to Rs. 1 crore.

How can we Help

  • We can help you assess viability of animal feed and related opportunities through a number of services including market research, detailed viability assessment and technical consultation.
  • We also offer support in executing your ideas by connecting you with sector experts and professionals.

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[1] As per Yes Bank report on The Indian Feed Industry – Revitalising Nutritional Security

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Flexible packaging: Opportunity for SMEs

The Indian flexible packaging market stands at $5 billion (Rs. 3.36 thousand Crores)[1] and is growing at little over 15 per cent per annum. Rapid development of personal care, pharmaceuticals, and food and beverages industries is contributing to this demand. Considering this growth opportunity, many international players are entering the Indian market through mergers and acquisitions route. In FY 2014, Finnish company Huhtamaki acquired India based Positive Packaging Ltd, in 2015 Australia based Amcor purchased  Packaging  India Private Limited (a subsidiary of Mumbai based Essel Propack Limited), and more recently in 2016,Essentra Plc, a UK based packaging  acquired pharmaceutical packaging business of India’s Kamsri Printing & Packaging Pvt. Ltd.

Flexible packaging is an interesting business opportunity for Small and medium enterprises (SME), as it allow them to do business with other SMEs.  Majority of flexible packaging demand is from food related industry, an industry largely made of small and medium enterprises. Since the clientele are small businesses requiring customized services, they often need a service provider that is also a small business and is willing to devote time and effort to meet their specific requirements.

Flexible packaging is far lighter and can therefore contain more material per pack, flexible packaging’s pack to product ratio is much lower (1:40 vis-à-vis 1:10 in case of PET packs)[2] as compared to that of rigid packaging. Flexible packaging also allowsmanufacturers to produce packs in functional and complex shapes facilitating user convenience such as squeeze ability and reclose ability. Advance technology in printing provides aesthetic features, thus making products attractive to the final consumers.

1. Market:

India’s annual manufacturing capacity is 30 Million Metric Tonnes[3].The overall flexible packaging end-user industry can be divided in Food and Non-food sector. The food sector comprises 48% of the packaging market at 14.4 MMT/annum; the rest goes to non-food such as Pharmaceuticals, Personal care, Tobacco and others.

1.1  Figure 1[4]:

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In the food sector, the highest share is with Milk and dairy segment. India is the largest producer of milk in the world, at an estimated 40 Crores liters per day and a market size of around Rs. 80,000 Crores[5]Given the large opportunity, many international players such as Nestle, Lactalis SA, Arla foods Savera, Danone, etc. have entered the Indian market. Since cold food supply chain is a challenge in India and dairy products are highly perishable, the demand for high quality packaging that extends the shelf life of the product is evident.

Other than dairy, food sector also comprises packaging needs of confectionery and chocolates, processed fruits and vegetables, etc.

The non-food sector is ruled by the Pharmaceuticals. Indian pharmaceutical industry (Valued at Rs. 9.07 thousand crores[6]) is growing at a CAGR 15%. India ranks third in terms volume and 14th in terms of value, in the world. Pharmaceuticals can further be sub-divided into; Bulk/ drug, Formulations and Devices. While  bulk drugs market is dominated by rigid packaging such as PET containers, glass bottles, metals containers and cans etc, It is formulations and devices that drive the demand for the flexible packaging. Packaging market for pharmaceuticals is difficult to crack due to its inherent challenges in Indian scenario. The two major challenges are:

  • Strict regulations: Pharmaceutical industry requires a superior level of safety to that of food packaging and therefore the packaging provider needs to meet stringent guidelines as per Drugs and Cosmetics Act 1940.
  • Counterfeiting threats: Due to lack of patent protection, manufacturers in pharmaceutical industry are reluctant to share the constituents of pharmaceuticals they produce. The knowledge of constituents is required in deciding the composite of the plastic types and grades to be used in the pack.

2. Flexible Consumer Industry in AP and Telangana:

The table below enlists typical consumer industries and major brands under these industries based in Andhra Pradesh and Telangana.

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3. Raw material requirements and technical specifications:

A flexible packaging material is a combination of many films that are laminated together. Most commonly used raw material includes; BoPP (Bi-axially oriented Polypropylene), Bo PET (Bi-axially oriented Polyethylene terephthalate), Nylon, Polyester, Poly propylene etc.

kl

kl1

4. Cost of project for starting a flexible packaging unit:

To start a flexible packaging unit producing a little over 200MT of laminates monthly, the minimum capital requirement would be upwards of Rs. 6 crores including machines, infrastructure and working capital. The budget would also depend on the market you would like to target and therefore the quality of machines.  The quality of printing machine is critical, as bad printing quality can lead of rejection of the material and adds to the cost.

5. Steps to consider before starting a flexible packaging unit:

First step would be to assess demand and supply of the packaging industry in your area, and identify the niche that you would like to serve. You may want to identify key clients that you would target and accordingly choose your marketing strategy.  You would also need to build a strong technical team that can meet client’s quality expectations, create innovative products and minimize wastage. As such, the following aspects need to be analysed before starting a flexible packaging industry

  • Market opportunity: Number and types of various flexible packaging consumer companies in the market such as FMCG, Personal care, Food and Beverages manufacturers, etc, their current vendors, requirements and pain points.
  • Competitive landscape: Number of players in the targeted market, their product profile, their clientele, number of years in business etc.
  • Production process: Raw material, man power & machinery required
  • Fixed and operational costs and profitability: Estimation on total initial capital required, working capital assessment, projected revenues, earnings and profitability.

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[1] As per UflexLtd. investor presentation

[2]Source: FPA flexible packaging association

[3]Source: Business Standard article – January 15, 2016

[4]Source: www.consultmcg.com

[5]Source: Business today article  – June 5, 2016

[6]Source: Wiki, BDMAI, Ministry of Pharmaceuticals.

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Budget 2017-18: Incentives For Small and Medium Enterprises

A number of measures revolving around government’s key schemes of Mudra, Start-up India, Make in India and Digital India have been announced. These relate to increasing access to capital, promoting domestic manufacturing and increasing tax compliance of small businesses.  Details are enumerated below.

Increasing access to capital

  • A Dairy Processing and Infrastructure Development Fund would be set up with a corpus of Rs. 8,000 crores.
  • Lending target under Mudra scheme has been doubled to Rs. 2.44 lakh crores in 2017-18 from Rs. 1.77 lakh crores.

Clean India/digital India- Incentives for filing taxes

  • The corporate income tax rate for companies with a turnover of less than Rs. 50 crores has been brought down to 25% from 30 % earlier.
  • Corporate income tax rate for companies with a turnover of less than 2 crores: Such companies are not required to maintain books and currently 8% of their turnover is assumed to be their profit and is liable for taxes. The presumptive rate of 8% has been reduced to 6 %, for turnover received by non-cash means (Sales receipt received through bank account or other digital means).
  • Start-ups: These benefits are available to start ups registered between April 2016 to April 2019, under start-up India scheme
  • The time period for availing 3 year income tax holiday[1] by a start-up has been extended to 7 years as against 5 years earlier, thus providing start-ups a longer window to claim the benefit.
  • Also, condition of original promoter holding 51% shares of voting rights for start ups for claiming the tax deduction against carry forward losses has been relaxed. As per the new condition, original owner only needs to continue to hold a stake in the start-up.

Make in India – Incentives for manufacturing in India

  • Renewable energy: Customs duty on a number of components that go into making solar power panels /modules has been reduced.
  • LED: Excise duty on components/fixtures of LED lights has been reduced.
  • Water purifiers: Customs duty for parts of RO membrane for household filters has been brought down to facilitate domestic manufacturing of RO membrane. The custom duty on import of RO membrane has been increased.
  • Devices for cashless transactions: Customs duty concessions have been announced for import of POS reader, micro ATMS, finger print reader, Iris scanner.

For detailed information on the changes in excise and customs duty, please click here to refer the Budget Sheet 2017-18.

Conclusion

Budget incentivises small businesses to manufacture locally and to pay their taxes. These are good steps as such and would help the industry in the long run.

How can we help you?

FineTrain is an advisory firm for small businesses. We help our clients grow their businesses. We can help you analyse new business opportunities or generate leads for your existing business.

Contact us

bchhatre@finetrain.com

800 888 4932

 

[1] As per start-up India scheme, the start-ups are eligible to claim 100 per cent income tax deduction under section 80- IAC, however they are liable to pay MAT (minimum alternate tax ,paid on book profits), which can be set off in later years

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Rise of B2B E-commerce: Opportunity For Small and Medium Enterprises

The competition among B2B ecommerce portals has been heating up with the entry of several new players who are looking to expand their presence across products and geographies. These portals are wooing small and medium enterprises to transact on their platforms with offers to support them with marketing, logistics and even credit. The rise of B2B ecommerce presents an interesting opportunity to SMEs who can leverage it to enter new markets and gain more insights on their customers.

Table 1: Leading Indian B2B e-commerce platformCapture

With the advent and increasing use of e commerce platforms, some of the issues faced by small businesses in selling online have eased, as these portals provide much needed marketing and logistics support. SMEs  can harness the power e-commerce opportunity through the following strategies.Small businesses find it difficult to sell online as the competitive landscape for selling goods online is very different from offline market place, where the sale is relationship based and competition is mostly local.  As such, to sell online, the product should be searchable, able to compete with local as well as national products and should be delivered in a timely and efficient manner.

 Key strategies for Small and Medium Enterprises

 Document the sale process

Since sale of industrial machinery part is a consultative process, a SME owner typically spends most of his/her time consulting with the clients to customise machinery to client’s requirements. For example, a ghee machine supplier needs to understand the manufacturing process (manual or automated), raw material (milk, cream or butter), and capacity and cold storage facilities of the client before designing the machine.

SMEs  need to document the sales consultation process in detail, which can then be used to design automated systems that can accommodate different buyer requirements and provide ballpark pricing.

Enable product comparison

In order to differentiate itself among a number of products available online, the SMEs need to provide detailed information on the product quality, raw material, manufacturing process and testing infrastructure available with the company. For example, the quality of a plastic product would depend the manufacturing process (injection moulding machine, extrusion machine or a hand layup process), polymer used and quality control measures adopted by the manufacturer.  Precise product description and comparison would also reduce product return, a major pain point for small businesses.

Segment your market

SMEs  must ensure that ecommerce doesn’t cannibalize their sales from existing sales channels (sales representatives and distributor channels). Therefore it’s important to segment the products into different categories depending on the business size, complexity of the product, buying cycle, discounts offered, geography, demography etc.  Thereafter, the portfolio could be clearly demarcated into segments that would be sold through both the e-commerce and traditional platforms/channels.

There is no better time to start selling industrial goods online. Small businesses should have a strategy in place to select the products to be sold through e commerce route, build capacity to meet the requirements of new customers and to choose the right ecommerce platform.

How can we help you?

FineTrain is a consulting firm for entrepreneurs, we help our clients grow their businesses. We can assist you in getting your business ready for e commerce and in planning your ecommerce strategy.

Contact us

bchhatre@finetrain.com

800 888 4932

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