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Sab Saath Baadhein

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ECF `mishti` boxes help ITC board sales 29 Jan 2006

Business Standard

Sumana Guha Ray

As the Indian industry of food packaging board grows at a rate of eight to ten per cent per year, ITC Limited's market share of the industry has grown from 17 to 25 per cent in the last year, Niraj Shrivastava, general manager for market development of the paperboards and speciality paper division of ITC Ltd said here today. A substantial part of this increase can be attributed to higher sales of elemental chlorine free (ECF) paper, he added. Last year, ITC produced about 90,000 tonnes of ECF value added packaging boards, which accounted for 35 per cent of the total volume of paper boards produced by the company in that year.

The revenue generated from boards last year amounted to 50 per cent of the total turnover of the ITC paperboards division. "This year plans are on for increasing production of ECF paper to 1.20 lakh tonnes", said Shrivastava. ECF used a pulping process that eliminated chlorine and hypochemicals in the manufacturing system, producing healthier food grade, non-contaminating and odour-free packaging material, explained Shrivastava. He said that over the last 18 months, ITC had succeeded in marketing its ECF packaging material in the organised sector and to pharmaceutical units.

He said that all Indian pharma exports to USA or Europe had to be packaged in ECF paperboard. Companies were using ECF material for domestic product sales as well. The challenge before ITC was to get the sweets, or 'mishti' industry in the country to switch to ECF board from the recycled packaging boards being used at present, said Shrivastava. With almost 50 per cent of India's 'mishti' industry being based in eastern India, ITC has launched a campaign in Kolkata, said Shrivastava. Almost 18,000 tonnes of food grade packaging was used in the eastern region daily.

The region offered good trade potential for EFC paper, Shrivastava said. ITC had conducted awareness campaigns about the advantages of using ECF packaging board among end-users, he said. However, without a government mandate making use of ECF boards for food packaging compulsory, it was an uphill task, Shrivastava admitted. Last year, 1500 shops were tapped in Kolkata and 100 of these agreed to use ECF as packaging material for their products.

The users included Chappan Bhog, Kamdhenu, Hindusthan Sweets, Makhanbhog, Sharmas and Bhikaram. He said Flury's was using ECF boxes for some products and Amul ice-creams was using it for family packs. In most cases, said Shrivastava, the switch-over was complete from recycled packaging board to ECF. Bodies like the Paschimbanga Mishtanna Byabashayee Samity (PMBS) had helped promote ECF packaging. ECF boxes cost approximately 30 per cent more than recycled board packages, admitted Shrivastava. A 250 grams ECF sweet box would cost 60 paise while a recycled board box would cost 45 paise. He said ITC was educating buyers about the goodness of ECF packaging so that they would want traders to use it. Sellers, in turn, would then switch over to ECF products. Box manufacturers were not being directly targeted by ITC.

These units were being instructed by sweet shop owners to use ECF board. ITC had invested more than Rs 750 crore in the last two years in its paperboard business and was the only ECF paper manufacturer in India. The company would be using endorsements, personal relationship campaigns and awareness programmes to increase use of ECF products.

To increase product visibility, the company had launched a campaign in the Kolkata Metro and on FM radio channels in the city.

Shrivastava said that the other category which should switch over to use of ECF products for food packaging were restaurants and ITC would target them as well.

Shrivastava said ECF was an international quality product preferred by end-users overseas and in India once they became aware of its benefits.

© ITC Limited