Satia Industries gains on association with Zume for manufacturing packaging products

Satia Industries Limited (SIL) informed the bourses about its formal association with Zume, a US-based global brand in the sourcing of packaging products used for meal boxes, beverages and face masks, etc. 

Zume has agreed to share its patented rights with SIL for manufacturing packaging products as desired and demanded by the global market. The expected average realisation will be between Rs 250-Rs 300 per kg, which is higher by 40-50 per cent compared to the local market realisations. SIL expects approximately 2,000 MT of orders annually in the first year from Zume. 

SIL has installed two table cutlery machines, each with an annual capacity of 2,000 tonnes. The erection & installation work is in progress and is expected to commence commercial production in the current quarter i.e. Q1FY22. 

Zume has a global presence for sourcing patented paper cutlery products with an agenda of creating sustainable packaging products & solutions using advanced, molded fiber, using 100 per cent compostable raw materials such as bagasse, wheat straw, hardwood, softwood, and bamboo pulp. 

SIL proposes to enhance its expertise through this association with Zume in providing customised moulded fibre packaging solutions across multiple industries such as food, consumer packaged goods (CPG), electronics, cosmetics, healthcare & pharma; thus, expanding its product offering basket. 

The company’s management stated that the market potential for this is estimated close to Rs 80,000 crore while paper packaging products are likely to capture a substantial share out of this. Its product shall be fetching better realisation because of the patented custom-designed product, resulting in high EBIDTA margin of 35-40 per cent approximately. 

With this, the stock of Satia Industries was trading 5.4 per cent higher at Rs 89 from its previous close of Rs 84.45 on BSE.