Introduction:
All major industries create wealth but if
there is one industry that plays a unique role by way of both creation of
wealth through a wide range of manufacturing activities and also by way of
preserving the wealth or value created by many, many other industries, it is
packaging. Apart from the huge value addition and employment involved in these
activities, packaging has served the Indian economy by helping preservation of
the quality and lengthening the shelf life of innumerable products - ranging
from milk and biscuits, to drugs and medicines, processed and semi-processed
foods, fruits and vegetables, edible oils, electronic goods etc., besides
domestic appliances and industrial machinery and other hardware needing
transportation. With water becoming a consumer product, polymer material-based
bottles are becoming an universal presence.
Packaging, as distinct from mere “packing”,
plays it’s most visible and catalytic role in a
modern economy with the widespread adoption
of branding of products and development of consumer preferences. To the extent
that any consumer product is packaged in a manner that meets the criteria of
safety, convenience and attractiveness, it gains market share. In the
aggregate, packaging as a sectoral activity
boosts consumption and economic growth.
Heightened competition in all product sectors
within the country as also the increasing need to look for export markets have
contributed to the rising demand for appropriate, and at the same time
cost-effective, packaging material and technologies.
The packaging industry’s growth has led to
greater specialization and sophistication from the point of view of health (in
the case of packaged foods and medicines) and environment
friendliness of packing material. The demands
on the packaging industry are challenging, given the increasing environmental
awareness among communities.
The World Packaging Organisation’ s (WPO)
slogan, “Better Quality of Life Through Better
Packaging”, sumps up the important place that
packaging occupies in a modern economy. To ensure that public appreciation of
this role and the policy-makers’ support to the industry are not diluted,
attention should be paid to basic issues like collection, segregation and reuse
of synthetic packaging material and observation of regulatory requirements.
Indian Packaging Industry Market:
·
The
Indian packaging industry itself is growing at 20-25% annually. This growth
rate is expected to double in the next two years.
·
Indian
Packaging industry is `20000 crores and
growing at more than 20% p.a. These figures indicate towards a change in the
industrial and consumer set up.
·
However,
the Indian fascination for rigid packaging remains intact. It is estimated that
more than 80% of the total packaging in India constitutes rigid packaging,
which is the oldest and the most conventional form of packaging. The remaining
20% comprises flexible packaging.
Flexible Packaging:
It contains multi-layered laminated sheets of
single or a combination of substrates such as
plastic, paper or aluminium. In flexible
packaging, Aluminium Foil is extensively used for a wide range of applications
especially in pharmaceutical packaging industry for packing of medicines and as
Kitchen Foil.
Keeping pace with the global trends,
Packaging industry for the pharmaceutical products has also undergone a sea
change in the past decade. The packaging for the pharmaceutical industry in
India is considered a sunrise industry, and is growing at a rate of around 20%
annually. The Indian packaging industry for the pharmaceutical products is
extremely competitive and is now bringing this competitiveness to the world
market in many forms. The domestic packaging industry for the pharmaceutical
use is offering the products in a cost effective manner by meeting the
international standards with substantial export to other countries.
As stated earlier, Aluminium Foil constitutes
the most important material for pharmaceutical packaging industry.
Approximately 75% of Aluminium Foil is used for packaging and household foil
and 25% is used in other industries. Its unique combination of properties –
impermeability, flexibility, strength, ductility, corrosion resistance,
conductivity and compatibility with other materials qualify aluminium foil for
an infinite variety of uses.
It prevents the loss of valuable aromas and
protects contents against light, oxygen, moisture
and contamination, which is very essential
especially for pharmaceutical packaging. It
guarantees quality and the best protection
against deterioration for sensitive and valuable
products.
TRH Resources Ltd. is a diversified and
integrated metals and mining group with annual
turnover of `10,000
crores. The principal operations of the company are located in India,
where it has a major market share in each of
the following metals: aluminium, copper. The
company has substantial overseas operations.
TRH Resources has a strong track record in
managing operations and improving costs and
output.
The Company has extensive expansion projects
plan for diversification of its business. Identifying the market potential of
Packaging industry TRH Resources Ltd. is planning to capture a market share in
Pharmaceutical Packaging Segment. For this the company wants to establish a
plant for the production of converted foils that are used in packaging of
medicines.
The Market Research and Analysis Department
of the company carried out a detailed study
about the converted foils.
The analysis shows that there is a fluctuating
demand from pharmaceutical industry throughout the year. The demand in early
quarters are more compared to third or fourth quarter. Further there is
substantial demand in neighbouring countries. Keeping all the factors in mind
the demand forecast for Company’s Converted Foil in the 1st year is
approximately 15,000 tons and as per market trends the demand for company’s
product would increase in subsequent years.
The average market cost of bare aluminium
coil rolls used as raw material for foil production is approximately `135
per kg. The selling price of bare aluminium foil depending upon gauge in market
varies between `180-220 per kg. The selling price of various
converted foil varies between `260- 360 per kg depending upon the end
product and the cost of aluminium scrap is about `50
per kg.
Further studies show that India makes most of
the equipment needed by the industry, including rotogravure printing presses,
laminators, slitters, and pouching machines. A full range of semiautomatic to
fully automated filling, sealing and wrapping machines are manufactured in
India.
These machines are of high quality and are
very competitive in price. There are some 600 to
700 packaging machine manufacturers, 95% of
which are in small and medium sector and
located all over the country.
A brief outline of
manufacturing process is given below:
The various coating processes carried out on
foil surfaces are :-
Ø Shellac Coating - Shellac coating is required
to make the aluminium foil suitable for
effective printing. For this purpose, shellac
solution is used which consists of 3% shellac
dust and 97% spirit. The average coating
weight is .05 gm per metre.
Ø Printing – Rotogravure technology is used for
printing.
Ø Heat Seal Coating – Heat Seal coating is done
on opposite side of the printed or shellac
washed surface. Heat-Seal Solution consists
of 16 % Vinnol 14/45, 12 % Chemplast, 31 %
Ethyl Acetate, 32% Acetone, and 9 % MEK. The
average coating weight is 4.5 gm per metre.
Ø NC Coating – Nitro-cellulose or NC coating is
done to prevent corrosion on the foil
surface. NC Solution consists of 30 % Solid
NC, 35 % Ethyl Acetate and 35 % Spirit. The
average coating weight given is 0.8 gm per
metre.
Ø Poly Coating – Poly Coating or Lamination is
done to make foil tear resistant. For this
purpose, poly of different gauge and width
are used.
Some of the end products that are required by
pharmaceutical industries for packaging are:-
Ø Plain Strip Foil – They are poly coated plain
aluminium foils. These type of foil requires
shellac and poly coating. These are used for
pharmaceutical packages after printing on
them by buyers.
Ø Printed Strip Foil – These are poly coated
printed foil.
Ø Plain Blister Foil – It requires shellac and
heat seal coating. Printing is done by proposed
buyers.
Ø Printed Blister Foil – These are printed on
one side and heat seal coated on the other
side.
As one of the Industrial Engineer of the company you have to develop a
plan for the manufacturing setup and production planning for the proposed new
plant.
Hints for Submission:
Your Solution must include:
·
Suggestion of a
suitable plant location with possible range of end products.
·
A proper plant
layout keeping in mind all the auxiliary functions, machinery and material
handling equipments. Give the plan view of the layout. (Layout should be
drafted in AutoCAD/PROE with exact dimensions.)
·
Cost Estimation,
Costing and Pricing of the product with break-even analysis.
·
The inventory
structure and norms to be followed for smooth production.
·
Master Production
Schedule (MPS) with current resources and projected demand.
·
Extra marks will
be given for stating some measures for increasing the plant productivity.
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