Strengthening value-added films production with cutting edge solutions

Delhi-headquartered Cosmo First recently announced the launch of its new business division: Cosmo Plastech. This strategic move aligns perfectly with the company's vision of offering a diverse range of packaging solutions to its valued partners for a wide array of FMCG products, providing enhanced supply chain efficiency. 

Mr. Pankaj Poddar, Group CEO of Cosmo First Ltd.

The strategy behind launching a new business division, Cosmo Plastech, is ideally aligned with the company’s aim of delivering a comprehensive variety of packaging solutions and sheets to valued partners for a wide range of FMCG, electronic, and other industries, hence improving supply chain efficiency, according to Pankaj Poddar, Group CEO of Cosmo First Ltd. This is a huge step forward in the company’s quest for a greener future since positive changes in the packaging sector pave the way for a circular economy. “For the past four decades, Cosmo First has proudly pioneered industry-first solutions. As the demand for FMCG items grows, so does the desire for new packaging solutions. With the establishment of Cosmo Plastech, we want to provide cutting-edge rigid packaging solutions to our clients and consumers while maintaining our steadfast commitment to sustainability,” Mr. Poddar stressed.

Cosmo Plastech looks forward to catering to the industry's changing expectations in an environmentally-conscientious manner and to introducing high-end product range under the new business division. Currently, the packaging containers are made from high-quality materials to ensure durability and reliability using injection moulding and thermoforming techniques. The company’s expertise in rigid packaging solutions, combined with state-of-the-art machinery, ensures that the products are moisture-resistant and tamper-proof. This makes the solutions of Cosmo Plastech an alternative to traditional packaging practices. The containers are round, rectangle, oval square, and many other shapes with special anti-counterfeiting solutions box containers which are the products with most demand. Other Cosmo Plastech’s products are: TF Cups (available for storing beverages, dairy items, ice cream, jams, sauces, etc.),  TF Trays used for sweets and food packaging, thinwall for food packaging containers, Sheets for freezer grade, antistatic, ESD (Electrostatic discharge), hot film, and other electronic industry packaging. Going forward, as per industry demand and expectations, the company may look at introducing more products and ranges. The new business division is targeting INR 100-150 crores (US$ 12- 18 million) in the next three years.

Rebranding to stay ahead of competition

The company rebranded from Cosmo Films to Cosmo First in July 2022 as it aspires to be the first choice for all its stakeholders and will strive hard to always stay ahead of the curve to industry-first solutions.

Cosmo Plastech has been a sought-after global brand for value-added films.

Over the last few decades, it has established itself as the most sought-after global brand for value-added films. The strategic choice to rename stems from the company's expansion of business operations beyond films into specialty chemicals, coating, adhesive, masterbatches, and D2C Pet care. “The rebranding reinforces Cosmo's value and strengthens their emphasis on creating a better life for people, the globe, and the society we live in, based on trust, empathy, compassion, and their core practice of putting people, employees, and their customers first,” Mr. Poddar explains. Today, Cosmo is a four-decade-old Indian corporate conglomerate widely known for its reliance on innovation to create value in a variety of emerging areas such as polymer.  Furthermore, it has also expanded into BOPET, shrink films, and CPP lines, and has introduced new business verticals and products like Cosmo Sunshield (window films) and Cosmo Plastech (rigid packaging).

To date, Cosmo operates various sites and location, including manufacturing sites in India: Waluj (Aurangabad), Shendra (Aurangabad), and Karjan (Vadodara); while sales and distribution centres are located in Canada, the US, Korea, Japan, Germany, and the United Kingdom. Cosmo confirmed that it does have expansion plans for its film business in line. “We look forward to commissioning our 10th BOPP line by 2025 and third CPP line by 2024. Furthermore, we are planning one more site in Maharashtra. We will be focusing on sheets for the rigid packaging business as well,” according to Mr. Poddar.

Several new specialty films have been launched, including shrink for packaging and non-packaging applications. A few other specialty films from non-packaging applications are also in the pipeline and should hit the market in the coming quarters. Having commercialised its specialised BOPET line in September 2022, the company is in the process of launching several new specialty products including window film, security film, and PET-G film. “While the new companies are still in their infant stages, they are increasing their capacity for speciality films. Some of the recent products that that have been introduced in the market are susceptor films, scuff free lamination films, polyester-based thermal lamination films, ID card map and match films,” Mr. Poddar mentioned.

New breed of films for various packaging applications

Cosmo First has also successfully developed a new transparent printable biaxially oriented polypropylene (BOPP) film named “TeploR” which has higher heat resistance as compared to conventional BOPP films. The film has been engineered to work as a printing layer replacing BOPET film in multi-layer laminates for various packaging applications in both food and non-food segments. The thermally stable films have excellent slip properties and good machinability and have good performance on high-speed VFFS and HFFS machines. This film has good thermal stability (no shrinkage) upto 185˚ C as compared to conventional BOPP films of 145-155˚ C.

Cosmo First is embarking on capacity expansion to meet growing market requirements.

To stimulate expansion in specialty chemicals, the company plans to introduce label adhesives, and coating chemicals for their existing B2C customer base this year.

The BOPP & BOPET business had an excess supply in FY23 due to the bunching of numerous new manufacturing lines. Although demand continues to rise, the bunching of supply reduced margins and impacted the whole sector. Cosmo First, with more than two-thirds of its sales from specialised films, resisted margin pressure and outperformed the industry substantially.

Their consolidated revenue increased marginally to INR 3,065 crores (US$368 million) in FY’23 from INR 3,038 crores (US$364 million) in FY’22, after expanding at a CAGR of more than 13.3% from FY18 to FY22 (speciality film sales increased at a CAGR of 18% over three years). Despite a hard economic situation, EBITDA for the year stood at INR 434 crores (US$ 60.76 Mn) demonstrating the resilience of speciality films. ROCE (Return on Capital Employed) and ROE (Return on Equity) were 16% and 20%, respectively. Cosmo is aiming for a top line of roughly INR 5,000 crores (US$ 600 million) in the next 3-4 years, with new businesses accounting for 15-20% of sales.

In the US, Cosmo has multiple sales and distribution centres at different locations and carry slitting for local needs. For the products, in the US market, it has introduced the thermal lamination films which is one of the flagship products. Cosmo is strategizing for the high-margin films in the US market. All its products are available in the US market.

As for the Indian market, growth has been steady in recent years. The demand for film and packaging solutions has been on the rise, driven by various factors, including increased consumerism, e-commerce expansion, and a growing middle-class population. They have recognised this growth and have strategically positioned themselves to leverage the opportunities presented by this upward trajectory.

In recent years, India has well positioned itself as a global market hub and Cosmo has emerged as one of the leading players within the Indian market. It has not only catered to domestic demand, but also successfully penetrated international markets. Its ability to provide high-quality film and packaging solutions has made it a preferred choice for clients not only in India, but also across the world. This expansion reflects its ambition to be a key player in the global supply chain.

Further, with ongoing changes and uncertainties in the China market, many businesses are actively seeking alternatives. They have ensured to keep their supply chains running and stand as a strong and reliable alternative to the Chinese market for their customers. Cosmo’s commitment to quality, competitive pricing, and a customer-centric approach has attracted businesses looking for dependable sourcing options. This strategic positioning aligns with its long-term goals to become a leading player in the global film and packaging industry.

Capacity expansion for specialty films

Cosmo plans to raise its entire film capacity by approximately 50% by FY’26, at a cost of around INR 500 crore (US$70 million), and its film income will increase by approximately 50% by FY’27.  Diversification into new industries including specialty chemicals and pet care has progressed as planned. Both segments are growing and contributing to the company's long-term wealth generation potential. Future goals in the pet care area include expanding the experience centres to 100+ in a few years and pushing the online business.

Year-on-year, Cosmo has introduced several industry-first solutions for its valued customers and partners, susceptor films, face stock films, and heat resistance films are some of the flagship products that they have introduced in recent years. Cosmo synthetic paper is a direct replacement for pulp-based paper in situations where durability is required. It is a white opaque co-extruded polypropylene-based synthetic film that resembles ordinary paper. A few other flagship products that it manufactures are: self-adhesive/ face stock film, lidding film, thermal lamination films, heat resistance films for printing, shrink films, in mould label films, packaging adhesives, think wall containers, and metalized container films.