Essel’s reputation as a leading soft squeeze, laminated tube company came from making toothpaste tubes for Chinese companies. And that market continues to do well for the manufacturer today: the “oral care segment comprises 85% of Essel’s total revenue in China as per the last fiscal,” reports business-standard.com.
Now, the company is turning its attention to more lucrative markets. “Cosmetic products have much better revenues, asset turn and value addition compared to the other products in our portfolio,” said Ashok Goel, vice chairman and managing director of Essel Propack Limited, in a press release.
New products from Egypt
To accommodate hair care brands in Africa and the Middle East, Essel set up a new machine in Egypt that makes laminated tubes specifically for hair care and personal care products.
The containers Essel will make to fill the market need are described by the company as Plastic Barrier laminate tubes with Inviseam technology, and high décor thanks to in-house printing.
The company is responding to an industry shift. Current and prospective Essel clients are making “a fast-emerging conversion from jars to tubes in personal care products like hair gels. The major customers are changing preferences from jars and plastic tubes to laminated tubes,” according to the company’s press release.
“Also, in AMESA region, we are witnessing a very high consumption of skin care, hair care and male grooming products. With two decades of experience in Egypt, this new business is certainly set to complement our growth and help us achieve our target of 50% revenue share from non-oral care business,” Goel stated.
More packaging for China
Essel’s new tube manufacturing facility in China has the capacity to produce 160 million tubes each year. There are plans to eventually increase that capacity; so the site will be able to make 380 million tubes per year.
This will help Essel Propack Suzhou meet its fiscal year 2015-16 goal of a 5.1% market share in China’s tube market (for products that are outside the oral care industry). Currently the company has a 3.2% market share in that space.
“The new plant which is our 5th site in China creates a new opportunity for Essel to mitigate any risk with current oral care customer group and could become a strong impetus for EP China’s top line growth in 2015 and beyond,” explained Goel.