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PACPROCESS-DRINKTECH 2019 SHOWDAILY 12 DECEMBER 2019 | SUPPORTED BY PACKAGING SOUTH ASIA & INDIFOODBEV
The other way would be to
move more extensively on the
surface and have a broader
range of machines in the local
portfolio but with higher im-
port content of critical com-
ponents of the machines from
Germany. These are the two
different models of manufac-
turing which have been used
from time to time in a nice
balance, depending on the re-
quirements of specific market
segments.
In some ways, our custom-
ers dictated this journey. They
wanted us to build maximum
machines as fast as possible, so
in the first phase, we commit-
ted ourselves to offer a wide va-
riety of machines from our lo-
cal portfolio. But since we took
a lot on the plate, we focused
initially on getting the most
critical parts from Germany
and offering value addition in
terms of assembly, testing, in-
stallation and project manage-
ment services while producing
many non-critical parts locally.
This benefited our customers
with a high level of local cur-
rency transactions while, at
the same time, providing us
the breathing space to develop
a suitable infrastructure to aug-
ment our portfolio in the days
ahead.
Besides the time saved by
manufacturing in India,
how much money can your
customers save in import
taxes?
Indian customers have had to
pay import taxes in the range
of 5 to 10% when importing ma-
chines from outside. One might
say it isn’t substantial saving,
but you are right on one point –
the time factor. The real saving
for the customers is on timely
service and availability of spare
parts, more so during emer-
gency break-downs, during the
entire machine life span of over
20 years. This saving is hugely
boosted when suppliers have a
local manufacturing set-up.
Our primary aim was to cut
down the capital cost of the ma-
chines when building in India.
We realized that operating in a
VUCA world with the minimum
inventory of parts will help us
to limit risks and remain cost-
effective. A local plant would
not, on the other hand, help us
to cut machine-building time-
lines, but lowering capital cost
was a more preferred trade-off
for our customers.
This trend amongst our cus-
tomers, I must add, has slowly
but significantly changed over
the years. They are now ask-
ing us for much faster delivery,
which has pushed us to aug-
ment our inventory of long-
lead components so that we
also can cut down the delivery
times.
Do you see that the actual
plastics debate is changing the
customer’s strategies as well?
You are right that the plas-
tics discussion has forced our
customers to think different-
ly. And I believe that plastics
are not as harmful as they are
made out to be in the debates,
but our customers always have
to respect the changing per-
ceptions of consumers. And
this perception has hugely
changed against plastics; there
is no denying that fact. Looking
at the sordid conditions of our
oceans and waterways and the
deadly effects on marine life
and environment, you can’t
blame governments and regu-
latory authorities, too, for com-
ing out with strict measures
against SUP (single-use plas-
tics). However, the problem in
hand is not an easy one as vi-
able alternatives are hard to
come by. And some solutions
implemented with good intent
but in haste might turn out to
be the problems of the future.
Our customers are seri-
ously brainstorming on the is-
sue and implementing specific
proactive steps. There is no
clear trend emerging yet that
they wish to move their prima-
ry beverage pack away from a
plastic bottle to a metal can or
glass bottle. Most of them are
focusing on a robust post-con-
sumer bottle collection and re-
cycling route while also explor-
ing options in parallel, around
bio-degradable plastics.
But we do see an emerging
trend to cut out plastics in the
secondary packaging area. I
give you an example – a shrink
packer with shrink film – cus-
tomers are trying to get rid of
that first. They can still have a
PET bottle, which can be put
into a paper carton instead of
a film shrink-pack. In this way,
they can show to the consum-
ers or the larger world that they
are sensitive to this plastic pol-
lution menace and have started
taking the first steps while con-
templating more concrete steps
for the future. Yes, they are do-
ing that, and we see the poten-
tial of changing procurement
patterns in the coming years.
But, at the same time, we have
to understand that there are no
easy or real alternatives today
to replace PET. For instance,
trying to shift even half of the
Indian PET beverage market to
glass or can seems a daunting
task in my view due to various
reasons, including but not lim-
ited to – the much higher car-
bon footprint of glass and can,
higher cost and less conveni-
ence to consumers, and inad-
equate glass production facili-
ties in India.
You said, PET is not as bad…
The benefits of PET as a pack-
aging material are multi-fold,
and, with the latest techno-
logical advancements, PET
can provide answers that were
traditionally available so far,
with glass or can packaging
only. However, what is wrong
or rather very bad is the litter-
ing by consumers and the lack
of adequate collection and re-
cycling of post-consumer PET.
This can be resolved by imple-
menting appropriate anti-litter-
ing regulations, awareness pro-
grams, innovative collection
systems, and finally, recycling
– initially ‘down-cycling’ but
with a final goal of bottle-to-
bottle recycling. Biodegradable
PET or returnable PET could
be other routes to explore, al-
though they have their unique
challenges too. As I said before,
knee-jerk reactions by indi-
vidual segments (for example,
7
banning SUP) of society might
harm our environment fur-
ther – as topics like increasing
carbon footprint, water deple-
tion, deforestation and climate
change are no less important
than plastic pollution. Solu-
tions that are being discussed
now are trying to tackle this
plastic problem on a superficial
level without taking a holistic
view. This ‘thinking in individ-
ual silos’ approach, in my opin-
ion, is not a good way to solve
it, but if public perception is
driving it, and governments
are forced to make legislation
on it, then the industry has to
follow too.
2nd Part of this story to continue
on Day 2
2
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