The SIG Group, headquartered in Switzerland and recognized for providing integrated packaging solutions to renowned companies like Pepsi, Coca-Cola, and Amul, among others, is investing around €100 million (equivalent to INR 900 crore) in setting up its first aseptic (free from contamination) carton plant in Ahmedabad, Gujarat.
The facility will boast an annual production capacity of 4 billion carton packs, primarily designated for packaging non-carbonated products such as dairy, beverages, and food items (including soups and ingredients), serving the markets of India and Bangladesh.
“We, at present, supply our cartons and bag-in-box packaging products to companies such as Amul, Pepsi, Coca-Cola, Parle Agro, ITC, and Milk Mist, among others, in India,” shared Samuel Sigrist, CEO of SIG Group, during an interview.
“We expect our Indian business to grow at a compounded annual growth rate of 15-20% over the next few years, and if that happens, in the second and third phases, we will ramp up the manufacturing capacity to 10 billion carton packs,” Sigrist said.
He stated that the €3.1 billion company aims to commence production at the Ahmedabad plant within the coming 12 months.
In the initial phase of planned investments, €60 million will be allocated to the capex component, while an additional €40 million will be dedicated to securing a land lease for the Ahmedabad plant.
Initially, the company intends to focus on the Indian and Bangladesh markets, a strategy driven by Sigrist’s belief in their potential for growth. He anticipates that the expanding disposable income of the middle class and the increasing demand for hygienically safe packaged foods that have extended shelf lives without the need for refrigeration will be key drivers of this growth.
The company is confident that it won’t sacrifice profit margins due to smaller packaging and the competitive market environment in the country. Their strategy hinges on compensating for this potential margin impact by achieving greater sales volumes.
“India, unlike other developed economies, has a large middle class that is beginning to spend on quality and premium-packaged products. Also, the smaller packs like INR 5 pack will help our clients even penetrate rural areas,” Sigrist said. Hence it is going to be a game of volumes, he said.
SIG Group offers a comprehensive range of services, including cutting-edge system filling machines, packaging solutions like carton packs and large-gallon bag-in-boxes, as well as machine maintenance.
“That is our differentiation that stands us apart from competition. Our filling lines can fill large as well as small packs on the same platform and can achieve 100 million fillings on a single machine,” he said.
In the initial stage, the company plans to import the raw materials, including paper, natural forest-based polymers, and aluminum. However, in the subsequent phase, they intend to transition to domestic sourcing, as he explained.
