Genesis of sustainable packaging at UFlex
I think one of the motivations was that in the mid-90s, our chairman along with the board of the company then—UFlex was a much smaller company then—were always traveling for machinery because India was basically, in the mid-90s and early 2000s, fully dependent upon imported machinery for packaging manufacturing. During those travels, we saw a lot of machine suppliers had machinery being put up for the handling of plastic waste.
Coming from India, I think the board had the foresight to understand that this would become a problem in India in the future.
There would be more migration to cities, more consumption would take place, and more waste would be generated. So this general theme has been quite prevalent at the senior and board level for a long time.
Consumers and demographic change
Indian consumers are extremely sensitised. They want higher standards. In terms of urban standards, the Indian diaspora no longer wants dirty cities or cities with poorly functioning waste management protocols.
Private players are incentivised to set up technology. Then you can organise things in a much healthier manner, because the idea that you will organise now and clean up later is not going to work.
Next frontiers in sustainable packaging
I think one of the first frontiers is to reinforce the point that is already gaining ground, which is to show the industry that the existing set of materials can be recycled. The idea that you have to change packaging design from the ground up and invent an entirely new range of materials is misplaced. There are enough materials today that perform well in a cost-effective manner for packaging, which can be recycled and successfully put back into the value chain, either back into the food value chain or into organised plastic articles where they do not cause pollution and environmental damage, such as injection-moulded furniture or injection-moulded parts that contain recycled content.
That is the first and most important point. Secondly, we should avoid over-designing packaging. Packaging design standards can change so that what was previously over-designed can be reduced. If you are using three layers, and today you have a better material that provides the functionality of the earlier two layers, you can reduce a three-layer packaging design to two layers. You then use less plastic while retaining the same functionality.
Thirdly, plastic barrier properties are improving significantly. In many applications, you will not need aluminium foil. Aluminium foil provides a very good barrier for food packaging. However, because the barrier standards of plastic materials are improving, in many cases you will not need aluminium foil in packaging. This makes it instantly more recyclable because the moment you combine foil with another plastic or paper, it becomes very hard to recycle, as the melting point of foil is extremely high. It is quite difficult to salvage combined packaging material that contains aluminium foil.
There are many initiatives underway. The main idea is for the industry to show that it can grow plastic production hand in hand with recycling. If you increase plastic production without increasing recycling facilities, it will obviously cause problems in the long run.
Embedding sustainability across the value chain
In terms of the value chain, on the input side, particularly the main resins, the problem is not so severe because you can have recycled resins for most of the main materials we produce. In terms of the plant itself, there is no major sustainability challenge because the waste generated inside the plant is recycled within the plant.
The new machines we have are very energy efficient. They use roughly half the energy to produce a unit of plastic compared to what was used decades ago. That is a huge improvement. You have significantly lower energy consumption to produce the same material than you did 15 years ago.
I would say the main challenge arises once you supply materials to customers. A lot of the transport materials used for dispatch, such as pallets and ancillary packaging, could be reused if they are returned. One pallet today, for example a Euro pallet, costs a couple of hundred euros. If customers simply send it back to us in Europe, we can reuse it at least 20 to 50 times. Then you divide the cost of the pallet by 20 or 50 rather than by one. That reflects the true sustainability exposure for that input.
So I would say it is more about incentivising customers and suppliers to exchange materials as much as possible, so that each company with the ability to recycle or reuse those materials can do so. In terms of actual inputs and operational production, the industry is making significant progress and will continue to do so.
ESG in the packaging industry
For packaging, ESG is definitely not a tick-box exercise. Public understanding of plastics has reached a point where, if you do not demonstrate a positive ESG footprint by actively recycling materials or reducing the energy used in production, customers will eventually lose interest in buying from such companies, and those companies will be pushed out of the market.
For the packaging industry, ESG is not a tick-box. It is part of the operational posture of companies now. Whether you are Indian, Chinese, European or American, if you are in the packaging industry, you cannot take a light approach to ESG.
India versus the global industry
I would say the Indian industry is much faster than the global industry in trying initiatives or product ideas that are considered more sustainable. In the UK and Europe, progress has been extremely slow. The talk is much bigger than the actual movement on the ground in terms of changing materials or incorporating sustainable alternatives.
For example, the UK has, for some reason, moved towards paper and plastic combinations because they believe that is more sustainable. However, paper and plastic laminates are inherently difficult to recycle. Either you have a full plastic laminate or a paper laminate without plastic. If you combine the two, you create a situation where recycling becomes very challenging. I do not fully understand the rationale behind that.
So I would say the Indian industry is much faster in trying new things. The only challenge is that public utilities and recycling facilities at state or city level are not yet fully equipped to handle the waste. Vendors need to set up that capacity, even at their own cost, to demonstrate in key cities that it can be done.
