Retail boom & opportunities in pharma industry pack good news for Essel Propack
01-Apr-2007 •Value Research
Essel Propack (Idirect Code: ESSPAC) is the world’s largest producer of laminated tubes with a 33 per cent market share. In the domestic market it has a 65 per cent market share — it is a sole supplier of lamitubes to Colgate India.
The company has now decided to leverage on its expertise of polymers and polymer processing to enter new markets. The focus is essentially on the pharmaceutical, cosmetic and food packaging sector. Any product that requires safe and hygienic packaging can be packed in a laminated tube. As a result these tubes find applications in a wide variety of products such as toothpastes, cosmetics, toiletries, pharmaceuticals, food and diary products and many industrial products. The company aims to ride on the retail boom in the country as well as the maturing pharmaceutical industry.
Consequently, the fiscal year 2006-07 was a busy one for the company. The company is taking to inorganic route to grow due to strict quality standards and approvals required in the packaging sector. Towards this end the company acquired Tacpro Inc of US and Avalon Medical Services of Singapore. Both these companies are established players in design and development of advanced medical devices. Under the brand name of Arista Tubes, the company expanded its operations in the co-extruded plastic tubes segment. Its acquisition of Packaging India is set to further enhance its position in specialty packaging. With these moves, fears of a narrow product line have reduced and there has been significant de-risking of the existing businesses. The only worry remains in the ability of the management to implement the new changes in the company.