FLEXing Muscles
Leading Indian polyester film cos in acquisition rush
Leading players in the flexible packaging business, particularly those in the polyester films segment are busy setting up manufacturing facilities on foreign shores.
Flex Industries, one of the leading players in the PET films segment, is in the process of investing up to $50m for setting up a PET films unit in Dubai free trade zone, through its wholly owned subsidiary Flex Middle East FZE.
Polyplex, which already has a 39,000 tonne-per-annum plant for PET films in Thailand catering to the US and European markets, is close to completion of another unit in a free trade zone in Turkey, from where it would get a better access to European markets.
Jindal Polyfilms, another major in PET films and BOPP films, made a foray into Europe, acquiring French company Rexor, almost two years back. Rexor, a comparatively smaller company, is into the specialised segment of manufacturing metallised/coated polyester films.
Industry sources say that polyester film companies have set up overseas units to cater to the European and US markets, because a countervailing duty has been imposed in Europe on PET films imported from India. The US had imposed anti-dumping duty on polyester film imports about five years ago.
Turkey is a free trade zone from where products can be moved to other European countries without any additional duties. The case is similar for Dubai.
Shyam Jindal, MD, Jindal Polyfilms, however, denied that their acquisition was targeted to avoid countervailing duties. “Our company’s name had been spared in the EU notification for CV duties imposed on imports from India. The idea behind the Rexor’s acquisition was to carry home the advantage of the high-end technology,” he said.
Interestingly, while PET films majors have been continuously working on setting up overseas manufacturing facilities, none of the BOPP film companies have taken any such initiative. BOPP films segment is also the main competitor to polyester films segment, both of whom supply their products to FMCG clients.
