Speaker: Mr. Pramod Pant, VP- Marketing, Jauss Polymers
12th Sep, 2011.
Introduction to Jauss Polymers:
Realizing the potential of a food grade and recyclable polymer as versatile as PET (Polyethylene Terephthalate), Jauss Polymers Limited successfully ventured in the field of manufacturing of all types of PET bottles, containers, jars etc using advanced Injection Stretch Blow Molding(ISBM) technology. It is one of the oldest PET Bottle and Jar Manufacturers in India. Jauss Polymers was established in 1989 with its first plant in Kurali (Dist. Ropar) 25 Km from Chandigarh. .The Second Plant was commissioned at Surajpur, Greater Noida In 1992. Presently all operations are undertaken at its Plant in Malpur, Baddi, Himanchal Pradesh.
Summary of the guest lecture:
Mr. Pant began by giving us a brief overview of the polyester packaging industry. This industry began as a substitute product for the glass industry in 1965. Production in India started in 1984. Pearl Polymers were the first entrants in India. He also talked about the primary and secondary packaging industry. Primary packaging is the material that first holds the product and envelops it. Primary packaging includes items such as jars, PET bottles, strips etc. Secondary packaging is outside the primary packing meant for grouping the primary packages together. Examples include paper and boards, cartons etc. Carbonated soft drinks constitute 70% of the total PET market with packaged water behind it
He then gave an overview of the production and consumption capabilities at different point of times in India. In 1991-92, the total consumption was 2000 tons, raw material was imported and there were heavy margins. The focus during this period was on developing new end users for the industry. In 1993-94, Reliance setup a plant having a capacity of 2L tons, when the consumption was 5000 tons. Until 1995, the industry was in the development phase and FMCG companies used PET jars as a promotional tool. Today, the consumption is around 3L tons and it is an industry having very thin margins. The industry employs about 3L people in India.
Need for Revival:
Jauss Polymers initially concentrated on developing the market for PET bottles in India. It spent a lot of money on promotion and development rather than on sales. Market awareness improved but sales were still to the same buyers. As a result, around 1995, the debt on the company was three times the revenues of the company and its survival was at stake. The main aim was to repay the debt first and then go for expansion.
Revival of the company:
Jauss Polymers started concentrating on generating revenues. For doing this, they shifted their focus from all of their customers to the few profitable ones. By 2000, they had a settled revenue model; however there was still a huge debt left. Finally they adopted a one customer, one supplier model and became the exclusive suppliers for Wrigley’s. This meant they had only one customer which was a big business risk for the company. But, they managed to exploit the model to their advantage and the company became debt free in 2010. He, however, stressed that this was a dangerous strategy to follow. Jauss achieved success by being proactive and maintaining a successful buyer supplier relationship.
Opportunities and Threats:
Mr. Pant then discussed the threats and opportunities for the industry. He said that there were many manufacturers in the industry and margins are very low and industry has had to go downward price revisions many times. Also, it is not commercially feasible to supply PET bottles beyond 250 km as transportation costs are huge. It is like transporting air. Transporters charge by volume of shelf space used and this is the primary drawback. Also, technological innovations such as reducing the weight of the bottle have a major impact on profits. Recycling is another big issue for the industry. Coming to the opportunities, he emphasized on the fact that there are many industries where there is significant growth potential. These include industries such as liquor, pharmaceuticals etc who are yet to adopt PET packaging in a big way.
He concluded by saying that Jauss Polymers is looking to expand its business by extending its customer base and by entering into related businesses such as making caps for the jars.
12th Sep, 2011.
Introduction to Jauss Polymers:
Realizing the potential of a food grade and recyclable polymer as versatile as PET (Polyethylene Terephthalate), Jauss Polymers Limited successfully ventured in the field of manufacturing of all types of PET bottles, containers, jars etc using advanced Injection Stretch Blow Molding(ISBM) technology. It is one of the oldest PET Bottle and Jar Manufacturers in India. Jauss Polymers was established in 1989 with its first plant in Kurali (Dist. Ropar) 25 Km from Chandigarh. .The Second Plant was commissioned at Surajpur, Greater Noida In 1992. Presently all operations are undertaken at its Plant in Malpur, Baddi, Himanchal Pradesh.
Summary of the guest lecture:
Mr. Pant began by giving us a brief overview of the polyester packaging industry. This industry began as a substitute product for the glass industry in 1965. Production in India started in 1984. Pearl Polymers were the first entrants in India. He also talked about the primary and secondary packaging industry. Primary packaging is the material that first holds the product and envelops it. Primary packaging includes items such as jars, PET bottles, strips etc. Secondary packaging is outside the primary packing meant for grouping the primary packages together. Examples include paper and boards, cartons etc. Carbonated soft drinks constitute 70% of the total PET market with packaged water behind it
He then gave an overview of the production and consumption capabilities at different point of times in India. In 1991-92, the total consumption was 2000 tons, raw material was imported and there were heavy margins. The focus during this period was on developing new end users for the industry. In 1993-94, Reliance setup a plant having a capacity of 2L tons, when the consumption was 5000 tons. Until 1995, the industry was in the development phase and FMCG companies used PET jars as a promotional tool. Today, the consumption is around 3L tons and it is an industry having very thin margins. The industry employs about 3L people in India.
Need for Revival:
Jauss Polymers initially concentrated on developing the market for PET bottles in India. It spent a lot of money on promotion and development rather than on sales. Market awareness improved but sales were still to the same buyers. As a result, around 1995, the debt on the company was three times the revenues of the company and its survival was at stake. The main aim was to repay the debt first and then go for expansion.
Revival of the company:
Jauss Polymers started concentrating on generating revenues. For doing this, they shifted their focus from all of their customers to the few profitable ones. By 2000, they had a settled revenue model; however there was still a huge debt left. Finally they adopted a one customer, one supplier model and became the exclusive suppliers for Wrigley’s. This meant they had only one customer which was a big business risk for the company. But, they managed to exploit the model to their advantage and the company became debt free in 2010. He, however, stressed that this was a dangerous strategy to follow. Jauss achieved success by being proactive and maintaining a successful buyer supplier relationship.
Opportunities and Threats:
Mr. Pant then discussed the threats and opportunities for the industry. He said that there were many manufacturers in the industry and margins are very low and industry has had to go downward price revisions many times. Also, it is not commercially feasible to supply PET bottles beyond 250 km as transportation costs are huge. It is like transporting air. Transporters charge by volume of shelf space used and this is the primary drawback. Also, technological innovations such as reducing the weight of the bottle have a major impact on profits. Recycling is another big issue for the industry. Coming to the opportunities, he emphasized on the fact that there are many industries where there is significant growth potential. These include industries such as liquor, pharmaceuticals etc who are yet to adopt PET packaging in a big way.
He concluded by saying that Jauss Polymers is looking to expand its business by extending its customer base and by entering into related businesses such as making caps for the jars.
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