AGI Greenpac Limited (f Rajesh Khosla, CEO, AGI Greenpac ormerly known as HSIL) is India’s leading Packaging Products Company that manufactures and markets various packaging products, including glass containers and Polyethylene Terephthalate (PET) bottles, products & security caps, and closures. Packaging Products Division has six plants in India, located across Telangana, Uttarakhand, and Karnataka. This division has a comprehensive product range, catering to 500+ globally acclaimed institutional clients in India.
Rajesh Khosla, CEO, AGI Greenpac spoke with MT to share insights about the organisation and the future outlook.
Background of AGI Greenpac
AGI Greenpac is a newly formed company. We have recently changed the name of HSIL to AGI Greenpac. There are a few reasons for changing the name of the company. One, HSIL or Hindustan Sanitaryware Industries Limited represent the sanitaryware business. So, sometimes the investors and stakeholders need clarification. Second, we have already divided the company and have separated the manufacturing part of sanitaryware and this has become the total packaging solution company today. And third, our focus is totally on the sustainability part of the business. So, we thought of it when we were selecting the name. Greenpac is very appropriate to say and communicate to the people what we have in the back of our minds to shape up the company in the near future. We acquired Allied Glass Industries (AGI) in 1974. We are now India’s second-biggest container manufacturer. We have two manufacturing locations – one is in Bhongir, which is around 100 kilometres from Hyderabad and the second is in the heart of Hyderabad city itself. The Bhongir plant is spread over 170 acres of land with state-of-the-art manufacturing. It is one of the biggest glass plants in the world at a single location with modern high technology. In April 2022, we started a new plant adjacent to our old one, making containers for cosmetics, perfumery, high-end liquor, and pharmaceutical food.
As consumers and end-users continue to push for more sustainable/greener solutions, what do you think is the biggest concern regarding packaging?
A few years back, sustainability or ESG were buzzwords. Due to climate changes, people have started feeling the pinch in recent years and ESG has become more of an emergency now. Many of our high-end clients like Heineken, Carlsberg, Budweiser or Nestle want to know what we have done concerning sustainable initiatives. They want to see if you are harming and environment. At AGI Greenpac, we have three divisions – glass forms the biggest division, second is the polymer and third is security closures. We are investing in a big way in the glass business as the glass itself is a sustainable product. It is 100% recyclable and can be recycled any number of times, making it an environment-friendly product. Most of our energy or power comes from renewable sources – solar energy in our Bhongir plant produces up to 17 megawatts of solar power. There are a lot of roadblocks to implementing these initiatives, especially at the policy level. Our product itself is sustainable and the processes that we follow are also moving towards sustainability. Besides that, we are also investing in automation and new technologies, which have helped increase energy efficiency. These steps have further helped in making our process and product sustainable. Most importantly, our customers recognize our efforts.
What are the challenges of switching to sustainable packaging?
We can implement a lot of processes in the renewable energy sector. But the policies and the administrative set-ups are roadblocks. For example: as you know, glass can be recycled. Why cannot there be a policy or set-up made mandatory so that glass after use is collected from consumption points like hotels, households etc. and sent to companies like ours? But there are no such policies which are defined. Things are changing, but not to the extent it has to be. The other challenge is the regulations – they are unclear and sometimes biased. The regulations must be clear and strict up to the global level. The next level is customer awareness, and the integration and understanding need to come via institutional education about sustainability and how it can be implemented to protect the environment. A 360-degree approach needs to be formed to make this happen, so that awareness about sustainability permeates the lowest level of business.
What are the five biggest trends/solutions that you see as significant in advancing sustainable packaging right now and why?
One, people are using reusable products; thus, recycling has become an essential aspect. Let me explain – packaging is a non-consumable item. The use of packaging is only during transportation. People used to discard the packaging once it reached its consumption point. Now, there is a change in this pattern – people either send old boxes or the boxes are recycled. Design element also plays a huge role. There is an increased focus on lightweight materials. The next aspect is the biodegradability of a product. Wherever plastic is used, there is a trend of adding a lot of biodegradable materials. A lot of research is being done on ingredients that can increase the rate of biodegradation. For example, lot of plant-based products are used in the market now. The last one I see as a trend now is that many companies are not only focusing on the product but also on the process.
What are the biggest changes to packaging design and production processes that are happening or need to happen to promote eco-sustainability in packaging, and what role does AGI play in this?
We are talking about two parts of sustainability – product and process-wise. For the product to be sustainable, it has to consume less energy from the system and it can be reused of recycled. AGI Greenpac is adding ingredients which can make the product lightweight. Now coming to the process part, we are implementing digital manufacturing practices that help reduce resource waste. This not only reduced the cost of production but also helped us reduce carbon emissions. We have started using natural gas too.
AGI has a full-fledged R&D department, which works on processes and products to make them environment-friendly. Another matter of importance is localization. Localization has a lot to do with sustainability. For instance, earlier we used to get the colour from the USA, but now we have developed the colour locally. So we are saving on the energy used to transport these materials. So, many small practices have been initiated, which have led to environmentally friendly practices.
What are roadblocks in the value chain, and what kind of solutions would AGI like to see addressing the areas of technological innovation, collaboration, and regulation?
In the times to come, there will be a huge push and demand by the consumer for a sustainable product. There is already a carbon tax in Europe, and the same tax will be implemented in India when we export these products to European countries. So, all the companies that cannot comply with the minimum criteria of sustainability will be penalized with this taxation system, which will come up in Europe very soon. These aspects are understood by industries that have global footprints. But midlevel industries or MSMEs need to be made aware of these challenges. Therefore, communication is crucial. Then comes the regulations. From my point of view, GoI needs to make the rules a little more stringent. They also need to facilitate the industry for this transformation as well as make it economically viable by providing tax benefits.
Coming to the point of technological innovation and collaboration: technological innovation means the technologies available right now globally, how they can be made available in India, and number two, how these technologies can be used in India. If this can be done, Indian manufacturers will start manufacturing products locally and can also serve other markets. Technologically, India has to strengthen their R&D systems.
Have any recent policy changes in India indicated greater pressure by policymakers towards better eco-sustainability for packaging?
Recently, single-use plastics have been banned, which is an excellent step. Once there is pressure to find an alternative, solutions will come up. Moreover, India has already committed that by 2025, they will make more sustainable packaging. Though it is a tough challenge, we can come to par with the European countries.
What does your organisation hope to achieve over the next 5 years with regard to the future of the packaging industry?
We want to be regarded as the most respectable and innovative company in the primary and secondary packaging industry. We have to provide the solution to the industry in packaging requirements not only the answer from a technical point of view, but from the process point of view; we make sure that the solution we are providing has to have a minimal carbon footprint in the industry. We want to be one of the front-runner companies in delivering a sustainable packaging solution to the industry most innovatively.