Though the concept of packaging is not new to the Indian market, new concepts, design and quality standards have revolutionised the industry following the entry of a number of foreign products. The rising health consciousness, with emphasis on hygiene, has also contributed in propagating packaged products. Moreover, with restrictions on deforestation, wood-based packaging material is giving way to paper and cardboard packaging.

"The cardboard boxes need less storage space and allow cover to be used for advertising. It is also cost effective," argues O P Mohan of Kiran International Pvt Ltd.

Today, when manufacturing fundamentals believe in what all glitters is gold, quality packaging goes a long way in attracting customers. The concept of packaging has grownfrom being just another wrapper to cover and protect your product. Now, size, colour, design, printing and texture are planned keeping target customers in mind.

With the dereservation of the packaging sector, many big companies too have entered this line. "Packaging today is well planned concept and a part of thoroughly conceived market strategy. The importance of packaging is now being realised by Indian entrepreneurs; after we have lost most of the markets to foreigners just because of inferior packaging," says Satish Tyagi, president of Uttar Pradesh Corrugated Box Manufacturers Association.

Crores of rupees are being spent on packaging by many companies. Some of them have such a huge demand for packaging materials that no single supplier can afford to meet their demand.

The size of industry can judged by the fact that 25 per cent of the total paper produced in the country is consumed by the packaging industry.

"Companies, like Reebok and Nike, need around 20,000 boxes per month. This trend hasinspired small players also as they have also started demanding quality packaging," says Mohan.

Though the entry of multinationals has expanded the market, it is also bringing some drastic changes in the industry. Today companies have special packaging developing units where they plan, design and develop the entire packaging matter. "If they are spending crores of rupees on packaging, they are also very specific about the text written on it besides other things," says Tyagi.

The quality demanded by the foreign companies is of very high standards in comparison to what is available in the local market. "We are technologically mediocre and we use different type of paper for packaging," says M C Mehra of Premier Packaging Pvt.Ltd. But changing market demands are forcing entrepreneurs to import new technology and improve quality.

The investment needed to start a packaging unit can be as low as Rs 50,000 and as high as Rs 6 crore, depending upon the scale on which one wants to start.

The infrastructuraldemands include some machines like dye cutting machine, printing machine, corrugating machine, etc. which are readily available in the local market.

A medium size unit needs Rs 15-lakh investment, but the cost can be reduced at initial stages by getting the printing work done outside, buying corrugated material and simply cutting and making boxes. "Thousands of such small units are working in Delhi who take semi-finished work from bigger manufacturers and supply them finished products. They save on machines," says Tyagi.

Packaging requires skilled and semi-skilled labour which is easily available in the local market.

The raw material includes glue and raw paper. Raw paper costs between Rs 9,000 to 25,000 per tonne depending on the quality. Paper costing Rs 15,000 per tonne is commonly used.

Though all seems hanky dory in the industry, it has its own set of risks and problems. Paper shrinkage is one of them. It leads to alteration in size, wrinkles in design, etc.

At times cardboard cracks whichdestroys the entire box leading to total loss of investment. The risk factor has also grown as the multinational companies are very particular about their size and any alteration in the prescribed specification leads to cancellation of entire consignment.

Another problem is blockage of money. Normally the industry works on a month's credit. Moreover, the margins in the industry are not very high but this problem can be tackled by increasing rotation and enlarging volumes.

Small players, who do not work on large volumes, normally don't face this problem as they work on cash basis.

Though the demand for quality product is rising, if a small-scale unit wants to import technology, it will cross the upper limit for SSI.

The ambiguity in government policies has worsened the situation. According to the members of Corrugated Box Manufacturers Association, dereservation of this sector has brought in some big players who with their imported and superior technology are posing a challenge to SSIs. The future ofthe industry hangs in balance since the matter is with the judiciary. Till the problem is sorted out small players of the industry have to cope up with the big brothers through self appraisal and innovation.