Mold-Tek Packaging : Future Prospects

Recently India's leading rigid plastic packaging manufacturing company, Mold-Tek Packaging Ltd reported its Quarterly results for the quarter end of the financial year 2022.

In its Quarterly results, the management of Mold-Tek Packaging has guided for a Capex of Rs.2 to 2.5 billion over the next 24-30 months. Capex will be used for developing the capacity in Injection Blow Moulding packs for pharma and cosmetics, establishing new facilities in Kanpur and North India, and expansion of capacity in Mysore and Vizag facilities. 

Capex for FY23 will be about Rs.0.8 to 1 billion and will be majorly spent on the Sultanpur facility (for IBM products) and increasing IML capacity by about 70%. 

Management has guided for volume growth of 15-20% for FY23 driven by: 

a) Approval received for three new moulds by top MNCs like HUL and GSK.

b) Commencement of production for Injection Blow Moulding's over-the-counter product from June 2022. 

c) Increase in offtake by Asian Paints from Mysore & Vizag plants. 

d) Increase in volumes at the Kanpur plant with commitments from Berger paints and Nerolac

e) Food & FMCG segment to deliver growth of 30-35% YoY.

For April 2022, overall volume growth has been 18.9%. The Food & FMCG segment has grown by 30%. Prospects from ice cream, restaurants, and fast-food segments are beyond expectations.

A good response is received from restaurants, confectionaries, and Indian stores in the US market. The volumes are expected to rise considerably in the years ahead. The only challenge is the high freight cost.

Dispensing Pumps: The trial order lot by Himalaya has been received but they are stuck with a drop in volumes, so commercial production has not yet started. Wipro has postponed its Hyderabad unit and is likely to commence in December 2022. It has committed 2 million pieces which have Rs.10-12 million revenue potential per month.

Injection Blow Mouldings: The Sultanpur plant is expected to start production by Oct'22. The pilot IBM project at Sultanpur is slated to start trial production by July 2022. Injection Blow Mouldings over-the-counter products may start sales in Q2FY23. No contribution is expected from the Pharma segment in FY23 as approvals will take over 6 months. The company has an internal target of reaching Rs.2 billion in revenue by FY25. The revenue is expected of Rs.100-120 million in FY23.