Essel Propack set to buy out Packaging India for Rs 100 cr
In a move that will consolidate its position as the leader in the domestic packaging industry, Essel Propack (EPL) is set to acquire Packaging India (PIPL) for Rs 100 crore.
By MV Ramsurya and Prince Mathews Thomas, TNN |
MUMBAI: In a move that will consolidate its position as the leader in the domestic packaging industry, Essel Propack (EPL) is set to acquire Packaging India (PIPL) for Rs 100 crore. The acquisition will be the Essel Group-company’s largest in the domestic sector and follows a string of buyouts and initiatives in the overseas market.
The Chennai-based PIPL provides packaging solutions to the confectionery, cosmetics, detergent/soap, food and beverage industries and has a production capacity of 6,000 tonnes per year. The acquisition, expected to be announced on Wednesday, will add teeth to EPL’s laminated and seamless tubes business catering to the oral care, cosmetics, pharmaceutical and industrial sectors. Company officials declined comment on the development.
“EPL will also benefit from Packaging India’s almost two decade-long expertise in highly-technical packaging concepts. It boasts of the latest in laminating and packaging machinery,” say industry experts. Shares of EPL ended 0.65% higher at Rs 77 at the BSE on Tuesday.
Earlier this year, EPL had bought 85% in Tacpro of the US and Avalon Medical Services of Singapore for about Rs 50 crore. This marked the company’s entry into the medical devices industry. The acquisition complemented EPL’s polymer-based packaging business and gave it access to the US and European markets.
“EPL, which was known as Essel Packaging till ’00 when it took over the tubing operations
of the Propack group, has banked on the inorganic growth strategy over the years. This is the first time the company has made a major move in the domestic market,” said sources. Claimed to be the largest speciality packaging company in the world, EPL has manufacturing facilities in 15 countries including China, US, UK, Russia, Germany and Mexico. The company claims it has a 32% share of the global market.
In the first quarter of the year, the company had recorded a growth of 11% with net sales at Rs 212 crore and net profits of almost Rs 20 crore.
The Chennai-based PIPL provides packaging solutions to the confectionery, cosmetics, detergent/soap, food and beverage industries and has a production capacity of 6,000 tonnes per year. The acquisition, expected to be announced on Wednesday, will add teeth to EPL’s laminated and seamless tubes business catering to the oral care, cosmetics, pharmaceutical and industrial sectors. Company officials declined comment on the development.
“EPL will also benefit from Packaging India’s almost two decade-long expertise in highly-technical packaging concepts. It boasts of the latest in laminating and packaging machinery,” say industry experts. Shares of EPL ended 0.65% higher at Rs 77 at the BSE on Tuesday.
Earlier this year, EPL had bought 85% in Tacpro of the US and Avalon Medical Services of Singapore for about Rs 50 crore. This marked the company’s entry into the medical devices industry. The acquisition complemented EPL’s polymer-based packaging business and gave it access to the US and European markets.
“EPL, which was known as Essel Packaging till ’00 when it took over the tubing operations
of the Propack group, has banked on the inorganic growth strategy over the years. This is the first time the company has made a major move in the domestic market,” said sources. Claimed to be the largest speciality packaging company in the world, EPL has manufacturing facilities in 15 countries including China, US, UK, Russia, Germany and Mexico. The company claims it has a 32% share of the global market.
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Earlier this month, the Ashok Goel-headed company had announced plans for setting up manufacturing operations for plastic tubes in Poland. This plant will primarily cater to the cosmetics and toiletries industry of Europe. This is was the company’s fourth new venture in two years and is part of the its target to garner 20% share of the plastic tubes market by ’10.In the first quarter of the year, the company had recorded a growth of 11% with net sales at Rs 212 crore and net profits of almost Rs 20 crore.
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