Business India ×
  Magazine:
Corporate Report

Published on: July 6, 2022, 2:52 p.m.
Sah Polymers’ mission: Recycle, reprocess
  • State-of-the-art, fully integrated bulk bag manufacturing facility at Udaipur

By Lancelot Joseph. Executive Editor, Business India

“We are not a single use plastic bag company, though our raw material is polymer,” explains Asad Daud, 31, MD of Sah Polymers Limited (SPL) which makes FIBC (flexible intermediate bulk containers), container bags, PP woven fabric and HDPE woven fabric, etc for flexible packaging. An interesting element of the company products is that the bags are used and repeatedly re-used by diverse industries such as agropesticides, basic drugs, cement, chemicals, fertilisers, food products, textiles, ceramic industry and steel. Some of the bags are reused for even ten years and then sent for reprocessing into pellets that go into making furniture and clothing, says Daud, an MSc from The London School of Economics and Political Science.

According to the Packaging Industry Association of India, the India packaging market was valued at $50.5 billion in 2019, and it is expected to reach $204.81 billion by 2025, registering a CAGR of 26.7 per cent from 2020 to 2025. Packaging is one of the high growth industries in India, is growing at 22-25 per cent per annum and is becoming a preferred hub for the packaging industry. Currently the fifth largest sector of India's economy, the industry has reported steady growth over the past several years and shows high potential for much expansion, particularly in the export market. 

The global packaging industry is developing and expanding day by day and the Indian packaging industry is also growing rapidly. This growth is primarily driven by factors like growing pharmaceuticals, food processing, manufacturing industry, FMCG, healthcare sector and ancillary in emerging economies like China, India, Brazil, Russia and a few other East European countries.

Daud explains that polymers account for around 70 per cent of petrochemicals, the reason they are the most important constituent of the Indian chemical industry. Polymers are essentially used in the manufacture of various plastic products and find major applications in packaging for the preservation of food articles, moulded industrial and home appliances, furniture, extruded pipes, etc. Apart from manufacturing the packaging material, SPL is into trading as well, being the Rajasthan channel partner for Indian Oil for polymers which are basically the by-products of crude processing wherein the waste is converted into polymers.

In the consumption of basic petrochemicals, polymers form the bulk of demand with a share of around 55 per cent. The share of polymers in the product mix in India for various crackers ranges from 60-90 per cent. The polymer segment has registered a growth of 18 per cent while there has been an increase of 26 per cent in capacities. Polymer consumption growth for 2017-2022 is 10.4 per cent, GDP growth is 8 per cent and import duty is 5 per cent. As much as11 per cent of India’s total exports are petroleum products.

Sah’s product mix has evolved over the past several years as the company has entered into new product categories, supplying to clients across six states and one union territory. “Globally, we supply to Africa, Caribbean, Middle East, Europe, Australia and the US,” says Murtaza Ali Moti, CEO of Sah Polymers and a qualified chartered accountant. The company has recently acquired a majority stake in Fibcorp Polyweave Private Limited, led by Moti himself.

  • Moti: expanding customer network in India and abroad

    Moti: expanding customer network in India and abroad

"Sah Polymer has been our primary supplier of bulk bags from India,” says Valentina Zanotti, CEO of Italy-based Suprema Bags. “Sah Polymers has demonstrated its commitment to meeting the challenges of the European market by building a state-of-the-art, fully integrated bulk bag manufacturing facility. This company has been a valuable integration partner for our company," Zanotti adds.

"Sah Polymers has been one of our primary suppliers of bulk bags from India. In addition to the typical commodity bags, we have successfully worked together on a number of highly specific applications. Sah Polymers has demonstrated its commitment to meeting the challenges of the European market by building a state-of-the-art, fully integrated bulk bag manufacturing facility," says Stephane D, Founder - Big'Pal.

Sah’s revenue from operations climbed 12.16 per cent from Rs49.1 crore in Fiscal 2020 to Rs55.07 crore in Fiscal 2021, attributable to an increase in sales of manufactured goods which included HDPEC and LDPE bags. Revenue for the nine months ended December 2021 stood at Rs54.01 crore. The consolidated revenue of the company for the nine months ended December 2021 stood at Rs64.78 crore. The company clocked post-tax profits margins of over 6 per cent as per the nine months period financials.

Sah plans to go public and has already filed its papers for the IPO with the stock market regulator SEBI for a fresh issue of over a crore of equity shares, with no offer for the sale component. The IPO proceeds, roughly Rs65 crore as per market sources, will be utilised for building a new FIBC plant and expansion of production capacity as well as funding working capital requirements for new projects, besides repayment/prepayment of certain borrowings.

SPL currently has one manufacturing site in Udaipur, Rajasthan, with an installed production capacity of 3,960 tonnes a year. The company has made investments in its manufacturing infrastructure from time to time in order to strengthen its product portfolio and reach, and as part of its strategic expansion plans, it intends to establish a new facility with an additional installed capacity of 3,960 tpa to manufacture different variants of FIBC products.

Industry standards

“They are perfect and look great,” says Swapnil Deedwaniya, promoter of Deedwaniya Brothers (DB) group. He appreciates Sah Polymers for its understanding of industry standards backed by strong R&D. Working with Sah is very smooth, efficient, transparent, and trustworthy, Deedwaniya says.

“We aim to focus on deepening our penetration in our existing markets, thereby increasing our domestic presence by expanding our customer network in India and abroad,” explains Moti.

There is tremendous demand for FIBC in the international market as Indian products are more cost competitive in the international market owing to its low cost of production and other advantages. Though China was a competitor, the post Covid scenario has had a positive impact on the company, says Daud. The China Plus One option that global companies are looking at now is a good omen for companies such as Sah which has reached its optimum capacity utilisation. “Hence, we are now expanding,” he says.

  • Daud: we are not a single use plastic company

    Daud: we are not a single use plastic company

With advancements in technology and general awareness, the packaging sector in India is also well poised as most raw materials for packaging are abundantly available in the country. Moreover, per capita spending has increased tremendously, leading to changing rural markets and a growing middle class who demand the best of products. Various upgraded technologies are being used in the industry such as aseptic packaging, retort packaging and biodegradable packaging to enhance the life of food products.

Moreover, the plastic packaging market is expanding rapidly, registering a growth of 20-25 per cent per annum and is valued at 6.8 million tonnes while the paper packaging industry stands at 7.6 million tonnes. The packaging industry is poised to grow rapidly led by the increasing use of innovative packaging equipment and the rising flexible packaging market. In terms of packaging, the food packaging industry is one growth area that has seen the maximum number of innovations in terms of packaging and branding. Consumers want their food products to be hygienic, safe and at the same time to look attractive.

When it comes to food packaging, MNCs have a very good ecosystem. They have a dedicated R&D house, which conducts various research-based experiments using the latest technologies, and are always innovating to ensure that the consumer is benefited. This development has led to healthy competition between the local manufacturers to deliver innovative products, and as a result, the entire ecosystem is gearing up for change.

Likewise, local manufacturers are now importing state-of-the-art machinery to ensure that packaging is of the highest standards. If trends are anything to go by – seeing is believing! Consumers who have attended any packaging event of late will be able to identify with the above scenario. Packaging machines for labelling, bar coding and scanning, to metal and plastic packaging – every contraption is now available to local manufacturers, Moti explains.

Special Report

Will Modi’s ‘Mission South’ succeed?

Either way, the 2026 delimitation could be a headache

Focus

Why Gandhinagar and not Mumbai for GIFT city?

Mumbai is more suited as an international financial services centre (IFSC)

Corporate Report

Tribeca Developers: Delivering excellence

Tribeca Developers is ramping up its presence in the luxury residential market

Cover Feature

How soon gold will hit Rs1 lakh, or even Rs2 lakh mark?

Gold is expected to outperform every other asset class on the planet by a mile

E-MAGAZINE
Up, Up and Up
Indian Elections and Markets
Modi 3.0
FROM THIS ISSUE

ESG

Hospitality

CSR

Corporate Report

Corporate Report

Corporate Report

Agriculture

The introduction of black pepper as an inter-crop in the sopari and coconut orchards, has enabled farmers to cultivate crops simultaneously

Skill Development

In 2020-21, the programme reached over 112,482 girls in urban and rural locations across six states in India, including 10,000 across Delhi

Collaboration

The event brought together stakeholders and changemakers to participate in a series of conversations on global trends and recent developments

Healthcare

The programme will focus on educating children on oral health and building awareness around the dangers of tobacco use

Biogas

German BioEnergy enters Indian market

Published on Aug. 17, 2023, 11:54 a.m.

BioEnergy will showcase its innovative biogas technology in India

Mobility

Ather looks to double its market share

Published on Aug. 17, 2023, 11:26 a.m.

Ather aims to produce 20,000 units every month, soon

Green Hydrogen

‘Kerala Hydrogen ecosystem a model for all states’

Published on Aug. 17, 2023, 11:06 a.m.

German Development Agency, GIZ is working on a roadmap for a green hydrogen cluster in Kochi

Renewable Energy

Adani Green eyes 45GW RE

Published on Aug. 17, 2023, 10:45 a.m.

AGEL set to play a big role in India’s carbon neutrality target