Big business from small products
Essel Propack’s growth story is proof that even a small product can go on to build a big business. The Mumbai-based company, a part of the Essel Group, today has a 32 percent share in the global laminated tubes market. It has targeted the pharma and FMCG markets, as these segments have the highest projected growth rates. Essel Propack pioneered the laminated tube revolution in India and is the world’s largest manufacturer with manufacturing locations in four continents. The company is a preferred global supply partner to Unilever, Colgate Palmolive, P&G and GlaxoSmithKline, amongst others.
Essel was set up in 1984 with a capacity of around 50 million tubes. The company made its first inroads into the global arena by setting up a manufacturing facility in Egypt in 1993. A wholly owned subsidiary was set up in China in 1997, followed in quick succession with a facility in Germany in 1998 and one in Nepal in 1999. In 2000, the company acquired the tubing operations of Propack AG, a Swiss multinational to become the world’s largest laminated tube company.
The growth of the laminated tube industry is in dental, cosmetics and pharma segments. Currently, dental is the largest segment but pharma also offers good potential. There is a visible increase in OTC products from pharmaceutical companies and most of them are being packaged in laminated tubes. Essel has identified this segment as one of its thrust area and is devoting more resources in increasing usage and innovation in laminates.
Realising the cost advantage of manufacturing in China, Essel was one of the first Indian companies to move in. The fact that it also offers one of the largest domestic markets was an added incentive. The Chinese market has a market potential for lamitubes estimated at three billion tubes per annum for toothpaste alone, this is apart from other major application areas of cosmetics, personal care products and pharmaceuticals with very good growth potential going forward.