Impact of Covid-19 on packaging industry

A shift from sustainability to safety

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Photo - Pxfuel

Coronavirus which originated in Wuhan, China, has already claimed more than 45000 deaths worldwide. The virus has spread to many parts of the world, including India, where total cases count nears 2000 and death toll up to 50. To protect the country and  slow down the spread of Covid-19, prime minister Narendra Modi announced a total lockdown of the country and asked 1.3 billion citizens to stay at home starting midnight of 25 March for the next 21 days. However, during this lockdown period, the government has allowed manufacturing operations and delivery of essential commodities like food and medicines to continue.

Packaging is integral to pharmaceuticals, FMCG, food, and a whole host of segments that fall under the purview of the essential services maintenance act. Many packaging plants, along with food and pharmaceutical plants across the country, are operational now. Still, a country-wide lockdown has resulted in short supply of raw materials, lack of workforce, transport restrictions, and more.

Jeevaraj Pillai, joint president – Packaging and New Product Development, UFlex says, “We were among the first who realized the impact of what would happen if we do not meet the demand for packaging in such essential space, during this lockdown. It became even more important for us at UFlex to stand by the nation, and work day and night to meet the country’s requirements.”

Jeevaraj Pillai, joint president – Packaging and New Product Development, UFlex

However, Pillai explains that due to the panic buying trend in the past few days, there is a momentary surge in some specific packaging solutions, especially in the daily use of food and consumer items. But he sees this as a temporary situation since the government is trying to contain and prevent the spread of Covid-19. According to him, if the virus  is contained quickly, this can assist the economy in faster recovery apart from opening new opportunities for growth.

Impact of pandemic on economy

Pillai states that Covid 19 will have a direct impact on the economy and the packaging sector. “In the weeks to come, we foresee challenges in both domestic as well as international markets. The overall impact of it on our business will depend on how soon the world can contain its spread, find its remedy and return to normalcy,” he adds.

He mentioned that during any economic slowdown, the consumption levels by consumers tend to fall and says, “Given that food and medicines are the basic requirements for anyone, the packaging industry will only suffer in terms of the desired business growth rate. There is never really a de-growth.”

Gaurav Jalan, founder, and director of Packman Packaging, who’s operations too, have started feeling the heat but he is hopeful of overcoming challenges when things will return to normal. He says, “The entire packaging industry, including big, small and local manufacturers will face challenges due to restricted transportation and temporary closure of suppliers and customer operations, and drop in export.”

Gaurav Jalan, founder, and director of Packman Packaging

Raw material shortage

In the current situation of lockdown, it is a concern as to how the food and pharmaceutical needs of the nation will be met. The government has allowed the running of packaging plants with minimal strength. Businesses nowadays run on a quick turnaround basis with just-in-time operative capacity. Adding to this, Pillai says, “We can easily manage this pandemic for some time with the available raw material. In addition, we are hoping to get permission to run our chemical plant as printing too is input and also an indispensable fraction of the final packaging to ensure uninterrupted production for daily essentials and pharmaceuticals.”

According to Rajesh Khosla, president, and chief executive officer of AGI glaspac, during such uncertain times, every company needs to evaluate how demands may evolve. They need to manage this demand based on their capabilities. The packaging industry is facing numerous issues on the logistics front due to the lockdown, which is resulting in the delay of supply of resources needed for packaging. However, the state governments have now included the packaging industry under the list of industries exempted from the lockdown. We believe it will reduce transport bottlenecks and help us serve our customers.”

Rajesh Khosla, president, and chief executive officer of AGI glaspac

Sustainability to endurance

Sustainability has been a big trend this year as many big brands have switched to more sustainable and eco-friendly alternatives, by replacing plastic and removing single-use packaging. However, Covid-19 has raised concern over the health and safety of what we are consuming and fuelled once again the demand of single-use plastic. In past months, we have seen a trend of removing unnecessary packaging, particularly in fresh produce. But as people are becoming more aware of coronavirus being transmitted through surfaces, they will hesitate to pick any food without proper packaging. They will instead ask this question to themselves before choosing, who else has touched that banana or orange?

“Sustainability is crucial to our existence and integral to our DNA at UFlex. Our efforts in this space continue unbridled globally, simply because we cannot stop one thing for the other. The fact that plastic has helped fight this battle with its use, especially in healthcare and gone onto save people’s lives should be appreciated. Also, with extra attention being given to hygiene issues, disposable plastic cutlery seems to be back in favor. Though I feel these will remain only a temporary solution, and once we are past the pandemic, everyone will be back to embracing eco-friendly packaging, in full force,” Pillai adds.

Jalan also believes that we have to move entirely towards environment-friendly packaging and says, “However, seeing the current situation, I believe we need to shift to plastic packaging temporarily. As I foresee, the government may instruct manufacturers to maintain complete sanitization of products during supply as well. In this scenario, plastic packaging will keep products inside the packaging safe and secure.”

Disruptions in the supply chain

Stakeholders of food, pharma, and packaging industry agreed that lockdown move by the government is an essential step to prevent the spread of the coronavirus. Since this was declared in a matter of hours, the preparedness to meet food and pharmaceutical packaging requirements for a longer time could not be planned. Uflex is running its plant with minimal staff, as per the mandate by the government. Pillai tells about the transportation and logistical challenges and says, “Now with the latest directive of ensuring the running of transport for essential services, this challenge should be overcome too. We see only a short-term impact on the supply chain of food and pharma packaging. For a company like ours that works across the value chain of flexible packaging, we are well placed to overcome this momentary challenge.”

Snowman Logistics, a market leader in integrated temperature-controlled logistics services, has recently communicated that the company is running its operations 24x7as cold storage warehousing and transportation are under essential services notified by the government to meet the demand for home delivery of food, medicines, and essential goods amidst the lockdown.

 

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Mandeep Kaur
Technical Editor - Mandeep Kaur is working with IPP Group and holding editorial responsibilities for the IndiFoodBev and PSA Healthcare platforms. Earlier she handled editorial responsibilities of food, beverage, and agriculture publications at another publisher. A gold-medalist in M Tech (Food Technology), she has hands-on experience in operating different types of instruments related to physico-chemical testing of grains and flour. She has worked at Evalueserve in the Intellectual Property (IP) division for more than three years handling projects in the life sciences domain.

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