Essel Propack''s Goel: India can replicate China''s success given the right environment.
Ask someone in the plastics industry to name a global Indian firm and chances are they might venture the name of a software developer rather than a processor. Few would expect a company from the subcontinent to be the world''s leading producer of laminated and seamless tubes, boasting manufacturing operations in 18 locations-spread across China, the U.S., Germany, Russia, Mexico, Colombia, Venezuela, Philippines, Indonesia, Egypt, and Nepal, besides India-and a 30% global market share. That company would be Mumbai-based Essel Propack.
Essel started operations in 1984 with an integrated facility to manufacture in India for multinationals active on the subcontinent. To meet exacting standards, "from day one, we''ve adopted top-rung technology, used the best raw materials, set up international standard manufacturing and operational systems, and built a highly skilled and professional workforce," says Ashok Goel, vice chairman and managing director of Essel Propack.
Over the years, Essel Propack garnered the respect of its multinational clients to the extent they requested the firm to set up plants offshore. The first overseas operation was a joint venture in Egypt in 1993, and "the foundation for going global was laid," says Goel. "Global expansion fit in precisely with our original corporate mission of `go and grow with the customer.''"
Following Egypt, a subsidiary was set up in Guangzhou, China in 1997; a joint venture in Dresden, Germany in 1998; and a subsidiary in Nepal in 2000. But it was in December 2000 that Essel Propack truly made its presence felt on a global scale by acquiring the tubing operations of the Swiss Propack Group. Propack was the fourth-largest laminated tube manufacturer in the world with operations in six countries. "Except for China, Propack had their businesses in areas where we were not present," says Goel.
Continuing its globalization drive, Essel Propack set up a manufacturing plant in Danville, KY to supply laminated tubes for Proctor & Gamble''s North American operations in 2003. In August 2004, the company acquired U.K. firm Arista Tubes, a leading manufacturer of seamless plastic tubes, while it started up a plant in Russia in January 2005. Its latest acquisition, in April 2005, was U.K. laminated tubemaker Telcon Packaging, a producer of standard and foil-free laminates. By virtue of this growth, Essel Propack now has the capacity to turn out more than 4 billion tubes per annum. Sales in 2004 amounted to roughly $145 million.
Essel''s workforce is as multinational as its geographical footprint. "We have a work force of more than 1700 people comprising at least 20 nationalities with about two-thirds being non-Indians." Here, corporate values play a key role in uniting diverse cultures. "Values such as commitment to excellence, teamwork and involvement, and `customer-driven'' bridge and bind diverse cultures," Goel explains.
Technology also plays a key role in Essel Propack''s business. "With the acquisition of Arista, seamless plastic tubes became our next focus area," says Goel. "By developing new technology in this segment, we aim to replicate our global success in laminated tubes." One example is invisible-seam technology, which the firm is close to unveiling. Recently, Essel Propack also introduced technology to produce minitubes, which places the firm in a unique position to focus on the pharmaceutical sector. Its acquisition of Telcon, meanwhile, brings with it foil-free technology.
India has the capabilities and competence to compete with China in manufacturing, but it has to pull its act together, says Goel. "That time is now because opportunity once missed is lost forever." Goel says India needs to follow China''s lead and provide the right environment for investment, develop physical infrastructure, and introduce labor policies centered on "creating employment, rather than job protection."
Stephen Moore [email protected]