In conversation with Sandeep Sikka, Group CFO, AGI Greenpac Ltd

Our strong sustainable business model has ensured that we continue to excel in the second year of the pandemic, asserts Sandeep Sikka, Group CFO, AGI Greenpac Ltd

The company’s name has recently been rebranded to AGI Greenpac Ltd while the name of its PET business changed from Garden Polymers to AGI Plastek. Can you shed some colour on your corporate rebranding strategy as well as your new vision for the company’s future?  

The name change to AGI Greenpac is a part of the company's transformational journey and with the completion of the divestment of the building products division as of March 31, 2022, the company has now become a focussed packaging player. AGI Greenpac’s motto ‘excellence in packaging’ remains the same, which resonates well with the company’s customers and truly reflects the product portfolio.   

The new modern logo ties the brand closer to its identity as a sustainable packaging company. The word ‘green’ reflects the company’s commitment to offering best-in-class sustainable packaging solutions that have a positive impact on our environment. Green Leaf represents the company’s focus on adopting sustainable best practices. It is the company’s promise to put sustainability at the core of day-to-day business operations.   

AGI Greenpac will now lead the next phase of growth while the management team remains committed to capitalising on the growing market opportunities, expanding its packaging business, and unlocking value for its stakeholders.  

According to you, what are the key emerging trends that the packaging industry has adopted in 2022? How is the company likely to benefit from the same?  

We see accelerated demand for packaged goods to come from online retail driven by the penetration of the internet and smartphones. The continued economic and demographic growth along with the rate of urbanisation translates into increased consumer incomes for spending on consumer goods. In addition to this, the aspiration among a growing middle class to engage with brands and shopping habits will further propel the growth of the sector. Our glass containers business-AGI Glaspac is poised to capture the growth driven by these factors.  

As more people are consuming products such as food, beverages as well as pharmaceuticals on the go, we are seeing an increasing demand for packaging solutions that are not rigid & convenient, and with this, the PET sector is/has become one of the main beneficiaries. And here we are poised to capture this growth with our PET bottles & products brand, AGI Plastek.  

Aligned with our goal of being the first-choice partner for Indian Alco-Bev and pharmaceutical industries, we also have our counterfeit resistant security caps & closures business under the brand AGI Clozure, which is doing exceptionally great since its inception a few years ago.  

For Q4FY22, AGI Greenpac posted robust growth in terms of revenue and EBIT numbers for the packaging business. What are the main factors that have fuelled such strong growth in this segment? Is it likely to continue in the future?  

Our packaging products business continues to grow profitably; it is driven by increasing demand for glass packaging from major end-use industries. Despite sharp rises in commodity, fuel prices & inflation, the company has effectively maintained its EBITDA margin. This is a testament to the underlying sustainable business model that we have built over the years. We enter the fiscal year with confidence to achieve sustainable growth with a dedicated management focus, a strong capital structure, new product offerings, and a strong operational efficiency. Supported by favourable factors, we will continue to be the most profitable glass packaging product company in India.  

What steps have you taken in order to maintain a strong EBITDA margin profile despite a jump in inflation along with supply chain challenges?  

Our strong sustainable business model has ensured that we continue to excel in the second year of the pandemic. By maintaining a strong focus on what we could control, our business fundamentals significantly improved. Our innovative efforts delivered a record pipeline and our long-term investments kept driving productivity while enhancing customer experience. All of these drivers helped us maintain a strong EBITDA margin profile despite a jump in inflation along with supply chain challenges.  

Presently, what are your top three strategic objectives?  

Our go-to-market strategy remains the same. We will continue to work on our sustainable business model to ensure that we remain the most-profitable glass packaging products company in India. We strive for continuous excellence in the business through our continuous innovation, value-added product mix, quality, and designs.   

We are excited about our foray into the speciality glass segment with the greenfield plant in Bhongir (Telangana) with a manufacturing capacity of 154 tonnes of glass. We have started the trial production at the plant and are geared to produce speciality glass for high-value industries such as perfumery, cosmetics, high-end liquor, and pharmaceuticals including vials.   

What is your earnings outlook for FY23?  

On the back of numerous initiatives that we've undertaken in recent years, AGI Greenpac has grown into India's most-profitable glass packaging company. Our current market position and well-defined growth strategy will help the company in delivering value for all shareholders & stakeholders.