Uflex, a leading flexible packaging company, expects double digit growth in sales during FY2015-16. "We definitely expect to achieve growth in double digit both in sales volume and value terms during FY 2015-16," R K Jain, Group President, Finance & Strategy, Uflex said in an interview with Myiris.com.

Excerpt from an interview with R K Jain:

1. Uflex is one of the dominant players in flexible packaging in India with global operations. Could you throw some light on how the business is performing locally and the countries where you operate in?

UFLEX is a leader-in the flexible packaging industry in India. It has become synonymous with the packaging Industry. Since its inception, the Company has accorded highest priority to quality and customer satisfaction. Today Uflex enjoys a global reach with manufacturing facilities in India, Mexico, Dubai, Egypt, Poland and USA(Kentucky) catering  to global markets spanning USA, Canada, South America, UK, Europe, Russia, CIS countries, South Africa and other African countries, the Middle East and the South Asian Countries.

We have consolidated our position as a truly Indian MNC (Multinational Corporation) and are expanding our capacity on a continuous basis. We are continuously innovating, developing and manufacturing new packaging products for existing and newer applications for achieving higher growth in the future. To achieve this we are adding manufacturing lines and our value proposition is increasing proximity to the markets, which helps us in addressing faster delivery and optimal service's needs, And our key differentiator - we bring broad portfolio of value added products to clients at competitive price points.

We provide end-to-end solutions to clients across more than 140 countries. Our clients include Procter and Gamble, Colgate, Palmolive, Unilever, Pepsi, Wrigley, Nestle, Gillette, Ranbaxy, Perfetti, Joyco, Monsanto, ITC, Godrej Pillsbury, Tata Tea, Hindustan Petroleum, Indian Oil, Britannia, Dabur, Haldiram, Wockhardt, HUL, Parle Biscuit, Birla 3M, among others.

2. In recent earnings release, Uflex has talked about global expansion and consolidation of its position. Could you share the capacity addition targets for current financial year? How much capex are you planning to incur in financial year 2016?

We are setting up a new manufacturing facility at Sanand Industrial Area in Gujarat for Asceptic Packaging Material for packing liquids, which will have investments of about Rs. 550 crore which shall be operative from FY 2017-18. Consequent to the implementation of this project, Company's capability to offer packaging solution will increase to all product profiles such as solids / powder,pastes and semi liquids and liquids such as juices / energy drinks etc.

During FY 2015-16, Company proposes to incur approx. Rs. 250 crore as normal Capex which will enhance the Company's capability to produce innovative and higher value added products without increasing the overall capacity, but resulting into higher margins due to better value addition.

3. How do you assess the competition in the flexible packaging industry in India and globally?

All businesses are competitive, likewise, flexible packaging also have great degree of competition both within and out of India.  The competition could be beaten by following the strategies of focus on innovation and new development, proximity to customers so as to provide better services to them. Uflex has adopted both since beginning and accordingly could attain the present status in the industry.

4. How do you see overall outlook and challenges for fiscal 2016?

Outlook looks to be moderate during FY 2015-16 easing challenges compared to the past years.

5. Revenues for the fourth quarter of 2014-15 fell marginally by 1%. Going forward, how do you see revenue growth over next few quarters? Do you think growth will move up to double digits in fiscal 2016?

The fall in revenues in Q4 was due to reduction in selling prices consequent to the lowering of raw material prices but the sales volume had grown during Q4 by 10%. We definitely expect to achieve growth in double digit both in sales volume and value terms during FY 2015-16.

6. In the March quarter, the company witnessed pressure on operating profit due to high cost and expenses. Do you see movement of input cost in current fiscal? 

The major factor for lower operating profit during Q4 was due to lower other operating income which varies from quarter to quarter while other operating parameters both in terms of sales realizations and costs were consistent during this period. You would notice that the whole year operating profits have shown growth over the previous year despite lower operating profit during Q4.

7. For the past few quarters, net margin was close to 5%. Do you think the company has potential to improve net margin to 6% level or higher? If yes, then by when you expect to achieve that level?

It is the endeavor of the company to improve the working at all levels including net profit level. This is a continuous process and we expect to reach to next levels quite soon.