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INTERVIEW

“We meet 20% of glass container demand in the country”
Monday, 06 January, 2020, 08 : 00 AM [IST]

HSIL Ltd’s packaging product division, AGI glaspac, (better known as AGI) was established in 1972. They manufacture high quality glass containers to meet stringent and demanding quality and standards for packaging  needs of foods, pharmaceuticals, soft drinks, spirits, beer, wine and other industries. The company has positioned itself as one of the leading container glass manufacturers in the country. Currently, the company melts 1,600 tonne of glass per day.

In an interaction with Akshay Kalbag, Rajesh Khosla, president & CEO, AGI glaspac, talks about the company’s growth, prospects of glass replacing plastics, technology innovations and so on.

Excerpts:
Take us through the history of AGI glaspac, from its inception to the present day.

AGI was established in the year 1972 with a capacity of 80 tonne/day (TPD). In 1981, HSIL Ltd acquired AGI and upgraded the furnace capacity to 180 TPD. In 1996, we achieved its first ISO 9000 certificate. In 2000, the first new furnace (F-2) was added, which increased the capacity to 450 TPD. In 2004, the second new furnace (F-3) was added to raise the capacity to 600 TPD. In 2009, a new greenfield plant was started at Bhongir with the third new furnace (F-4) of capacity 500 TPD, which raised the capacity to 1,100 TPD.

In 2011, the company exported its first consignment. In 2012, the fourth new furnace (F-5) was added, which increased the capacity from 1,100 TPD to 1,600 TPD with a colouring forehearth. It is also the largest container glass manufacturing facility at a single location in Asia. In 2016, electrostatic precipitators were installed to reduce SOX, NOX and CO2. In 2017, the company introduced TPM, LEAN and Six Sigma. In 2019, we invested in natural gas to curb carbon emissions. We also installed machinery like end-of-the-line packaging for robotic case packer, case palletiser, cullet washing system, automated dry optical sorting system etc.

How is the glass packaging industry performing in India? What is the rate at which the company is growing?
The glass industry in India is quite old and well established. It remained largely a cottage industry for a long time. In recent years, the industry has transformed from rudimentary mouth-blown and hand-working processes, to adopt modern processes and automation in a big way. However, Indian per capita consumption for glass packaging (1.8kg) is much lower compared to other nations. The following graph shows the comparative consumption in other countries:

Per Capita Consumption
The company currently meets approximately 20 per cent of the glass container demand in the country. It plans to increase its capacity by more than 50 per cent in the coming three years.

We are present in all the important segments of the glass containers. We are working closely with customers to deliver value in the supply chain and to identify micro opportunities and cater to them. The company has invested in resources like R&D, machine-building, machinery and automation so that the best products can be delivered to our customers with the present infrastructure.

What are the prospects for the growth of the glass packaging sector in India?
Despite the low per capita levels, the country’s glass container industry is buoyant, with downstream demand from local beverage, alcohol, food, pharmaceuticals and cosmetics industries. The industry is experiencing a surge in demand, due to the growing purchasing power, urbanisation, modern retail and increasing awareness about health and hygiene among consumers. The industry’s prospects are likely to improve even further in the future due to rising disposable income and India’s GDP rate in the short- and medium-term. The local economy, which remained mostly unaffected by the global financial crisis, has been a major aid for the glass container industry, allowing manufacturers to grow even during these uncertain times.

Tell us about your clients in the food and beverage industry.
We deliver our products to segments like beer, chemicals, food, coffee, liquor, pharma, soft drinks, beverages, wine and water bottles. We also have our retail B2C segment, with a brand called “Greendrop Glassware,” where we sell our bottles in e-commerce sites like Amazon, Flipkart, Snapdeal etc.

Our clients from the food industry are The Global Green Company, Heritage, Reitzal Koeleman, Nestle, HUL and from beverages, Coca Cola, Parle Agro and PepsiCo.

Our clients in other segments include ABInBev, Bira91, UB Group, Avantor, Thermofisher, Dr Reddy, GSK, Pfizer and Diageo, amongst others.

What are the prospects of glass replacing plastics?
We are gearing up to support India’s vision to replace plastic with green and environmentally friendly product glass. We have expanded our capacity to meet the rising demand. Since plastic is lighter in weight and easier to use, glass uses new technology to match the characteristics of plastics. NNPB can produce the best glass bottles, and the current trend is tempering, using appealing colours and other value additions. We are also tailoring our supply chain to cater to the market. One of the initiatives is our retail segments Greendrop Glassware, which deals with B2C and with e-commerce.

What are the challenges currently being faced by the glass industry in India?
Glass packaging continues to face fierce competition from other forms of packaging in India. Competition from alternative materials is increasing. Some reasons why customers do not use glass are loadability, breakages and unit cost. The industry needs to develop more lightweight bottles and improve the durability of its finished products to compete in the market.

In the past, the local container glass industry has concentrated its efforts on such objectives as traceability to restrict counterfeiting. Such an initiative would involve the use of permanent engravings on containers, showing the quarter and year of manufacture. This system could be helpful to protect consumers from any harmful practices employed by spurious product manufacturers.

What technology innovations are you adopting?
We are trying to set new trends in the industry by leveraging technology to create innovative products that will help meet the already existing demand more efficiently.

Some of them include:
?    Adopting new tempering method for strengthening glass containers
?    Creating lightweight containers in different geometric shapes
?    Using newer technologies like single-stage forming to produce thinner but stronger glass containers
?    Developing a coating on the surface of the glass to avoid strength loss
?    Creating heat-resistant Pyrex glass
?    Creating internal embossing glass bottles

Tell us about the plans of the company.
We have already invested in the upgradation of our plant. Our investments are in technology upgradation, inspection, packaging systems, warehousing and logistics. We are also looking at increasing our volumes by at least 50 per cent in the next three years.
 
Our customer base comprises a host of multinational and Indian companies in various business segments. The domestic market is our priority, and we have a clear policy that we would not like to export at the cost of domestic demand. The additional capacity is used for exports to regions like North America, Europe, Africa, Canada, as well as the APAC regions.
 
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