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Uflex to set up plant in Nigeria to increase packaging film output

Wednesday, May 29

 

By Yaruqhullah Khan

 

NEW DELHI – Uflex Ltd plans to set up a new manufacturing facility in Nigeria, to increase production of packaging films by around 50,000 tn annually, Chief Financial Officer Rajesh Bhatia told Cogencis.

 

The Noida-based company garners nearly 96% of its revenue from its flexible packaging operations, which include its packaging film business and aseptic packaging business. Uflex has reached optimum capacity utilisation in its film operations and is setting up new facilities in overseas locations to increase capacity.

 

The company had earlier announced that it would set up a new 71.5-mln-euro (around 5.57 bln rupees) facility in Hungary, through subsidiary Flex Films Europa, which is expected to add 50,000 tn to the company's annual production capacity by 2020.

 

Further, Uflex aims to achieve double-digit production growth in its aseptic packaging business, which produced 80,000 tn in 2018-19 (Apr-Mar), Bhatia said.

 

The company has targeted three major categories for aseptic packaging–juice and energy drinks, dairy products, and liquor.

 

Uflex has sales teams in Bengaluru, Mumbai, and Delhi, to target customers who want to de-risk their aseptic liquid packaging supplies from Tetra-Pak.

 

The company has started supplying to fast moving consumer goods giant Gujarat Co-operative Milk Marketing Federation Ltd, which owns the Amul brand, and is looking to supply around 1 bln packs to the company every year. The company has also tied up with Diageo plc to supply around 1.5 bln packs every year, and 800 mln-1 bln packs each to Indian arms of PepsiCo Inc and The Coca-Cola Co. Uflex had launched its aseptic liquid packaging brand Asepto in January 2017.

 

The company expects its businesses in Mexico, Dubai, Poland, Egypt and the US to reach peak capacity utilisation in 2019-20.

 

Uflex had spent 3.3 bln rupees as capital expenditure in 2018-19, and is looking to bring it down to around 2 bln rupees in the current financial year.

 

The slowdown in capital expenditure is mainly due to excess capacity the company has in its aseptic packaging business.

 

At 1250 IST, shares of Uflex were down 1.8% at 260 rupees on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Akshit Harsh

 

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This copy was first published on the Cogencis WorkStation

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