SIG to invest 100 million euro on Gujarat plant, expects India to be in top ten markets
Leading packaging solutions provider SIG has expressed its optimistic outlook for India’s market, with plans to make significant investments. The company’s CEO, Samuel Sigrist, announced that SIG expects India to be among the top ten markets globally. In light of this, the company is prepared to invest approximately 100 million Euros (equivalent to Rs 878.8 crore) to establish its first manufacturing plant in the country.
SIG entered the Indian market in 2018 and has since witnessed remarkable growth. Samuel Sigrist emphasized that India has played a pivotal role for the company and is expected to continue doing so in the future.
The company is particularly encouraged by the growth of the beverage industry in India. Factors such as the expanding economy, rising incomes, and increased consumption of packaged food products have contributed to this positive outlook. SIG’s CEO also highlighted the company’s impressive five-year compound annual growth rate (CAGR) in the packaged dairy business, which stands at around 15-17 percent. He expressed confidence that India will evolve into a substantial market for the company in the years to come, emphasizing the growth opportunities and the company’s excitement about its prospects in India.
While acknowledging that India’s current market size for SIG is relatively small, Samuel Sigrist stressed that it is growing rapidly. He emphasized that with the establishment of the new plant and the ongoing expansion of the beverage industry in India, the company’s presence and scale in the country will increase significantly.
SIG has taken a significant step forward by laying the foundation for its first aseptic carton plant in India. The company is investing 60 million euros (approximately Rs 525.98 crore) in capital expenditure (capex) for machinery and an additional 40 million euros (Rs 351.36 crore) for the lease agreement for land and building in the first phase of the project. This initial commitment amounts to nearly 100 million Euros.
Commercial production at the Ahmedabad-based plant is expected to commence by the end of 2024. The facility will cater to the growing demand for dairy and non-carbonated soft drink packaging in India. The investment will be phased over the period of 2023-2025 to achieve a production capacity of up to 4 billion packs per annum.
Subsequent investments are anticipated to further expand the capacity to up to 10 billion packs per annum. This substantial investment underscores SIG’s commitment to expanding its presence and production capabilities in India to meet the rising demand in the country.
In the initial phase of its operations in India, SIG plans to use imported materials to manufacture its aseptic cartons. However, in the subsequent phase, the company intends to transition to sourcing raw materials locally, further aligning with India’s manufacturing ecosystem.
SIG has already made significant strides in India, with the installation of 40 packaging machines. The company has established partnerships with some of India’s prominent players in the juice and dairy sectors, including notable names like Amul, Parle, Coca-Cola, Dabur, Varun Beverages, and ITC. These collaborations highlight SIG’s commitment to meeting the packaging needs of leading brands in India’s thriving beverage and dairy industries.
Additionally, SIG commended India’s economic environment, characterizing it as “business-friendly.” This positive assessment reflects the company’s favorable experience and outlook on conducting business operations in the country.
On a global scale, SIG plays a substantial role in the dairy sector, providing approximately 70 percent of the packaging for products ranging from cow milk and yogurt drinks to cream and sweetened condensed milk. The company also contributes 20 percent of packaging solutions in the beverages sector and 10 percent in the foods segment, showcasing its diverse presence and impact across various industries.
SIG anticipates that its dairy segment will experience robust growth in the coming years, reflecting the increasing demand for dairy products and related packaging solutions. The company, known for its collaborations with global brands like McDonald’s and Starbucks, is also eyeing potential opportunities in the Quick Service Restaurant (QSR) industry in India. The QSR segment is demonstrating rapid growth in the country, offering SIG opportunities to provide its packaging solutions to this dynamic market.
In addition to its focus on the dairy segment, SIG is actively engaged in the bag-in-box and Spouted Pouches business in India, diversifying its product offerings to cater to a wide range of packaging needs.
Established in 1853 and headquartered in Neuhausen, Switzerland, SIG is a well-established and globally recognized packaging solutions provider. In 2022, the company achieved significant production volumes, manufacturing 49 billion packs and generating 3.1 billion euros in revenue. This strong presence and performance underscore SIG’s position as a leading player in the global packaging industry.