Asepto, the aseptic liquid packaging business of the $1.63-billion Noida-based UFlex Ltd, is likely to start commercial operations at its greenfield packaging manufacturing facility at Ain Sokhna on Egypt’s Gulf of Suez by the end of this calendar year. The company is investing $126 million in the project.
Ashwani Sharma, President and CEO, Asepto, said $108 million of the total investment had already been spent up to June. The facility, spread across 30 acres, is the company’s second aseptic packaging plant and will add 12 billion packs a year to its manufacturing capacity.
Asepto’s first aseptic plant, located at Sanand in Gujarat, has a similar annual capacity. Once the Ain Sokhna facility reaches full utilisation in three years, the company’s total capacity will rise to 24 billion packs annually.
The company expects the new plant to operate at around 30 per cent capacity in the first year of commercial operations, increase to 70 per cent in the second year, and reach 100 per cent in the third year.
Sharma said Egypt was chosen for its strategic access to major international markets. The plant will enable Asepto to serve markets across Egypt, West Asia, Europe and East Africa, and and other international destinations.
Shipping times to key markets range from about five to 30 days. Europe can be reached in around 10 days depending on the destination, while GCC markets such as Saudi Arabia can be reached in two to 10 days. Shipping to markets such as Brazil and major US ports takes around 25-30 days, he said.
Sharma pointed to the country’s trade arrangements with Europe, North Africa, the Arab League and Mercosur countries as benefits, besides its relatively low tariff levels for the US market.
“We started from India in the second half of 2017 and in nine years we are in the top five in the world,” Sharma said. Asepto currently serves more than 200 customers across over 50 countries. The Ain Sokhna facility has been designed as a highly automated and modern manufacturing operation.
Global demand for aseptic packaging is estimated at around 300 billion packs and is led by dairy products, juices and beverages. Pharmaceutical liquids and other specialised applications are emerging as potential growth segments.
Aseptic cartons typically comprise around 70-72 per cent paper fibre, with aluminium and polymers making up the balance. Sharma also expects segments such as liquid pharmaceuticals, protein and vitamin drinks, and plant-based beverages to gain traction over the next decade.
Asepto already has a significant presence in Egypt through its packaging films business, making the country an important investment location for the UFlex group outside India.
(The writer is in Ain Sokhna at the company’s invitation)