This story has been in the making for over two years but events kept overtaking it. There was the pandemic, but the flexible packaging industry became stronger, SB Packagings’ new film lines and gravure press arrived and were installed. Equity investment came in. The WorldStar award was won. Further orders for another blown film line and new presses were breaking news even as this story was being written and rewritten with SBP’s inputs. This is the kind of story that will continue to be overtaken by events but one has to freeze the frame somewhere and get it out as soon as one can. – Naresh Khanna
It is very difficult to believe that a company that was still sick less than ten years ago is now setting new standards in the flexible packaging industry and is on a growth trajectory of its own, seemingly oblivious of the competition. SB Packagings was founded in 1991 by OP Banga and established on the outskirts of Delhi in what is now included in the Delhi-NCR. Banga was joined in 1992 by his son Amit after he completed his MBA from a reputed business school. Amit Banga says he would have become a banker if it wasn’t for the opportunity afforded by his father’s business.
Speaking about how the name ‘SB Packagings’ came about, Om Prakash Banga reminisces about his erstwhile partners the Sethi family. Together they founded SB Chemicals, the parent firm that subsequently diversified to packaging as SB Packagings.
The company primarily produces recyclable monolayer PE flexible packaging in the form of both rolls and pouches for a wide range of consumer product companies, in both food and non-food segments. It has championed the use of PE in India and is a leader in the hygiene segments – particularly diapers and sanitary napkins. Initially, SBP was a small-scale unit for manufacturing monolayer PE bags for Unilever for its detergent brands such as Surf, Rin, Vim, and Wheel and this has remained the DNA of SBP.
Each of the past decades has been an extreme roller coaster ride for SB Packagings’ business. The perseverance in resolving the company’s ups and downs has eventually been rewarded with successful expansion in the past decade. In the past year, one of India’s most respected industrialists and investors, Azim Premji has made a substantial investment in the company to take it to the next level.
Reengineering the upward climb
From its first-year turnover of Indian Rupees 20 million in 1993-94, SBP grew leaps and bounds to a turnover of Indian Rupees 700 million over the next decade. Ahead of the times, SBP was the first converter to invest in a CI flexo press, a natural expansion for its PE film business in the year 2000.
Along with the flexo press came a solventless laminator, one of the first in the country. However, a breakthrough into the food business with the new concept of solventless lamination was not easy with high gestation periods for qualification with big brands. Additionally, the flexo process was not able to compete with the well-entrenched gravure printing industry in Asia, especially in India.
On top of these challenges, polymer prices shot up due to the Gulf war and it was difficult to pass on the price increase to its big buyers. This was the perfect storm and thus began the financial downturn for SBP. The losses wiped out its working capital and the company lost many of its employees who left the ship thinking it was sinking. Those who had faith in the promoters stayed behind. Some of the suppliers took the rug out from under the company’s feet while those who knew the Bangas better kept the faith and continue their support.
Amit Banga rolled up his sleeves and took the driving seat. Supported by his father, he gradually invested all the personal assets of the family into reviving the business. Putting up a brave face in front of the banks, worried suppliers, and anxious team members, he set upon the long and arduous task of rebuilding the company.
Its depleted working capital forced the company to stick to more profitable customers and value-added business segments. Reengineering the product mix led to the exfoliation of the unprofitable businesses and a strategy to stick to its core competency – the monolayer PE business. Extrusion of thin PE films for surface printing with gravure and flexo presses was a challenge for the industry and SBP had the capability and experience to take it on.
The upward trajectory, significant investments, and breaking news!
P&G was one of the first new clients who needed SBP as much as the converter needed the brand owner and thus began a long partnership, which remains stronger than ever. With this reengineering of the product mix and a plan to stick to its core competencies, the second coming of SBP gained traction with several clients who had faith in its capabilities. These brand owners have backed the company over its past fifteen years of success and growth.
The downturn beginning in 2003 was reversed by the end of the decade and a new growth trajectory emerged. First came a fresh investment in a gravure press, a PE blown film line, and specialized bagmaking machines in 2014, and then a state-of-the-art 8-color CI flexo press from Uteco and another PE blown film line and additional bagmaking machines in 2017.
Thereafter there was no looking back. More PE blown film lines and bag-making machines followed and then came the big combo of a 10-color press with full automation and a 3-meter-wide PE blown film line from the world leader Windmoeller and Hoelscher in 2020. There is breaking news that SBP has just given a repeat order for the same combination again to W&H. At the same time, there is a repeat order to Kohli Industries for a second gravure press from that company.
Premji Invest comes into the picture
In August 2021, Premji Invest, Wipro chairman emeritus Azim Premji’s family office company, invested US$ 25 million (approximately Rs 180 crore) in SB Packagings for capacity growth and acquisitions. “With the backing from Premji Invest, one of India’s leading private equity investors, we look forward to further expanding our capabilities through organic and inorganic routes, thereby strengthening our position in the Indian flexible packaging industry,” says Amit Banga.
In the last decade, SB Packaging has won numerous Indian and International awards for its excellent PE printing capabilities and environment-friendly packaging products. After winning the IndiaStar and the AsiaStar Awards for 2020, SBP recently won the most coveted packaging award in the world, the WorldStar 2022 Award for Innovative Sustainable Packaging, for its unique innovation of “100% Recyclable Stand-up Pouch with Spout and High Barrier.”
SBP produces one of the widest ranges of PE bags and pouches in the world and has the capability to replace most multilayered packaging (MLP) with 100% PE-based packaging. It has taken on one of the last bastions of multilayered packaging, by winning the WorldStar Award for 100% Recyclable Stand-up Pouch with Spout and High Barrier made of monolayer PE for liquid packaging. The award will be presented at the forthcoming Ipack-Ima exhibition in Milan at the ceremony on 4 May 2022.
“Our perseverance and faith in building a business model around the needs of the society are finally paying off, though it is still a long and winding road ahead,” says Banga. “It is quite amusing to look back and realize that ‘sustainability’ was not a buzzword when we started focusing on environment-friendly packaging almost two decades ago. While there is a lot of noise now, it is just the start of a new journey. The brand owners in India are still waiting for a regulatory push, but for us now, the world is a market. So, we will focus on whoever wants it first.
“With the government imposing Extended Producer Responsibility (EPR) for both the brand owner and the producer of plastic packaging, the obligation to recycle and utilize recycled material has begun and it is critical for brand owners to promptly cut their usage of plastic raw material in order to reduce their obligations. “We are ready when they are.”