Piramal Glass smells good biz in perfume, cosmetics

With demand for amber glass bottles in India depleting, the Piramal Group company is shifting 20 per cent of its pharma-glass capacity to the cosmetics and perfumery (C&P) segment.

Of its total 1,100 tonne capacity produced a day, C&P glass constitutes 330 tonnes, 440 tonnes is pharma glass, and the remaining 330 tonnes is for speciality food and beverages. 

This will soon change to 580 tonnes for C&P and only 385 tonnes for pharma, as overall capacity touches 1,265 tonnes a day.

Takeover

Also, PET (Polyethylene Terephthalate) is taking over the glass bottle segment, as the market for C&P picks up in BRIC (Brazil, Russia, India and China) countries. Consequently, the company is clear — any additional capacity would go only towards C&P. 

“Our capex for the next two years will be Rs 300 crore. Of this, around Rs 220 crore will go towards expansion of the C&P segment and the remaining Rs 70-80 crore towards maintenance,” Mr Vijay Shah, Managing Director of the Rs 1,103-crore company, told Business Line. 

But Piramal Group recently sold two of its key businesses, domestic formulations and diagnostics, and the word on the street is that glass too is on the block. 

“It's absolutely baseless. We are in a growth phase…In fact, the company has not reached its full valuation as yet,” says Mr Shah, detailing plans of the business. 

Piramal Glass' pharma focus will only be on high-value added injectibles and infusions exports, especially to the U S. 

“At present, one-third of our pharma products are exported,” he points out. The company sells to companies including Merck, Pfizer (NYSE:PFE) , Wockhardt and Glenmark, among others.

The acquisition of US-based Glass Group Inc (erstwhile Wheaton Glass) in 2005 helped Piramal's foray into C&P. It gave Piramal access to the world's-largest perfume market, besides latest technologies. 

8 furnaces

Piramal has since invested Rs 800 crore for operational purposes and upgradation of manufacturing facilities. The company has eight furnaces at its factories in Gujarat, Kosamba (6) and Jambusar (2). 

With these investments, Mr Shah says, all efforts are towards “tweaking the product mix in favour of the high-end premium market,” rather than “adding tonnages in a major way.”

In the C&P sector, Piramal supplies Procter & Gamble (NYSE:PG) , Coty, L'oreal, Estee Lauder (NYSE:EL) , Mary Kay, LMVH and others. The fancy bottles of perfume brands like Pur Desir, Chevignon, Puma Flowing and Dior, among others, come from Piramal's furnaces.

“We have relationship with 17 out of the 20 top customers, who constitute 80 per cent of premium market (globally). Any multinational in India if they want anything in glass they buy from us. So bottles for nail polish — L'oreal, Revlon and Tips and Toes — are all made by us. “Ponds' ‘White Magic' and ‘Age Miracle' bottles were crafted here,” smiles Mr Shah, pointing towards the glass factory in Kosamba.