Thread by @ankitlongterm

#HUHTAMAKI PPL, is amongst the prestigious flexible packaging companies in India with rich experience of over 8 decades. Company became a part of the Finland based global food packaging major Huhtamaki Oyj in 1999, one of the top 10 consumer packaging companies in the world.

HPPL offers a wide portfolio of packaging solutions that include Flexible Packaging, Labelling Technologies and Specialised Cartons. They have a Pan India presence backed by 18 manufacturing sites and 5 sales offices.

A Small Cap MNC company with Market Cap of 1600 crores and CMP of Rs 213.
•Promoter holding is at 66.94%
•Debt reduction from Rs 403.11 crores as on 31st dec, 2018 to Rs 272.6 Crores as on 31st Dec 2019 (a reduction of 32% Y.O.Y)
•ROE and ROCE of at 25.81% and 22%

•Net profit and Cash flow from operations of 2019-20 stands at 170 crores and 285 crores respectively (Note: Reduction in tax rates and also tax credit of earlier years resulted in increase in net profits)
•Reserves and Surplus of Rs 682 crores
•Book Value/ share is 95.13

HPPL renders services to the entire major fast moving consumer goods which includes:
•Biscuits and Snacks (Example: Bourbon, Milano, Good day, Dark fantasy, Britannia treat, etc),
•Cereals (Example: Kellogs, Chocos, etc),
•Confectionary (Kitkat, Cadbury, Kinder Joy,

Soups and Sauces (Example: Maggi, Knorr, Fun Foods, Chings, etc),
•Ready meals (Haldirams, Maggi, Knorr, Chings, etc )
•Ice Creams (Cornetto, Magnum etc)
•Diary & baby Food

Top most clientele includes:
•Cadbury
•Nestle
•Britannia
•Colgate
•Hindustan Unilever; etc.

Recent acquisitions in 2019-20
•Acquired flexible packaging business of Mohan Mutha Polytech Private ltd on Jan 10, 2020 to increase presence in South India. The deal was debt free. (Deal was to tap flexible packaging market in Andhra Pradesh and other regions in South India).

•New press at Rudrapur: to provide attractive packaging solutions within a short turnaround time, they have installed a brand new 9 colour Rotogravure press at Rudrapur Plant in Uttarakhand.

Advantages of MMPPL acquisition
• Location: Sri City is India’s most well-run private industrial estates
• Infrastructure: Manufacturing and supporting
• Comprehensive product portfolio
• Marquee clientele in domestic and export markets
• Future expansion potential

Key Shareholders:
•Promoter holding is at 66.94%
•Shree Capital Services ltd (promoter of Shree Cement) holding 1.23% shares of the company

Industry Overview
•The industry is estimated to be worth $228 billion in 2019 and is expected to grow at an annual rate of 3.3%, reaching $269 billion in 2024.

•Indian flexible packaging industry is expected to reach a value of Rs 640 billion by 2022-23 up from Rs 375 billion in 2017-18, growing at a CAGR of 10% from 2017-18 to 2022-23.

Revenue from Domestic and Exports
Around 70% of HPPL’s revenues originate from the domestic market, while exports account for the rest 30%.

Support from the Parent, “Huhtamaki Oyj”:
Uses vast expertise, experience and knowledge of different geographical market to identify opportunities and risk related to key customers.

Flexible packaging serves as an excellent format to pack foods with its material efficiency, lightweight and superior barrier products that helps lower green house gas emissions and reduce food waste. It uses recyclable materials, reducing usage of traditional virgin polymer.

Innovative product packaging:
•Huhtamaki Blueloop is a collaborative platform that is driving the move from a linear manufacturing and consumption economy to one that is circular and more efficient

•Using Huhtamaki blueloop platform, they are putting their effort and energy in converting their entire portfolio of stocks to make them easier and more convenient to recycle.
•Using Novel polymer chemistry to make the packaging structures easier to recycle.

•Leading the way to circular packaging: they are developing recyclable mono material solution of plastic and paper that impact the utility of packaging at the end of its life, ensuring greater recyclability in a closed loop.

Product Portfolio
Comprehensive portfolio includes barrier and recyclable laminates, specialised pouching, thermoforms, decorative labels, digitally printed laminates for pack personalisation and tube laminates, pressure sensitive labels, metalised and heat transfer labels etc

Key advantage of Flexible packaging
•Reduces food wastage by allowing packing of smaller quantities that can be consumed without being wasted

•Minimises burden on natural resources in terms of both material and utilities needed alongside emissions generated, to produce the packaging material and transport it to the point of consumption

•Drives sustainability by maximising reuse and recycling: Flexible packaging uses zippers and seal top closures, which allows consumers to use them multiple times before discarding. The materials used in flexible packaging are also recyclable, thus promoting a circular economy

•Maximises customer convenience: It is lightweight and designed in a manner that is easy to open, carry, consume, store and reseal

•Product preservation: Most flexible packaging products are equipped with barriers, which protect the products from moisture, vapour, dust and light. This helps retain the quality, taste and flavour of the products

•Customisation: Using modern printing technologies, flexible packaging can be developed with high-quality colours and logos. This serves as a great advantage for brands that are looking to enhance recognition and awareness

Key drivers of Flexible Packaging:
•While departmental retail is a key driver of flexible packaging in the urban foods markets, unit packaging needs are driving rural demand.

•Growing consumer preferences for ready-to-eat food, juices, processed fruits and vegetables; increase in the spread of organised retail; increasing population of working women; conducive government policies; and investments by international and domestic companies

•The food packaging industry is expected to gain further as consumers are increasingly convinced of the health, quality and the longer shelf-life of packaged foods.

•Innovations in new packaging materials serve to maintain nutritional content, flavours, textures and taste of various foods while extending shelf-life.

•Readymade meals or foods that reduce the long preparation time of traditional dishes, continue to gain consumer acceptance owing to modern lifestyle influences and preferences for greater convenience.

Ban on plastics in major Indian cities
India becoming aware of hazards of plastics with 20 states launcing a blanket ban on manufacture, use, sale, distribution, shortage and use of plastic items such as one time use bags, PET bottles, etc.

Flexible packaging on the other hand uses, recyclable plastic and other environment friendly materials thus creating a niche for itself in the country.

Why brands are preferring Flexible Packaging over traditional packaging?

•Companies are increasingly recognising the benefits of flexible packaging which includes extended shelf life, improved cost economies, lower pack weights, and transport costs.

•Compared to traditional packaging such as glass jar and metal cans, they requires less energy and resources compared to other packaging types.

•Brands in order to tap lower end markets, offering products in small and affordable sizes, Informal retail sector and with India “known as nation of shopkeppers” with its 12 million retailers present in every corner of country especially in rural areas are driving the demand.