Packaging Business Ideas in small towns
In this comprehensive guide, we’ll delve into an emerging business opportunity that’s gaining traction in small towns: the packaging business. The surge of small-scale FMCG enterprises in tier two and three cities has spurred an escalating demand for packaging solutions. This article aims to provide a detailed insight into this intriguing opportunity.
Boosting Growth In The Packaging Industry
The emergence of small-scale FMCG companies in lesser-known towns has created a fertile field for the packaging sector to thrive. Historically, these cities relied on big industrial centres like Delhi, Ahmedabad, and Bangalore for packaging.
The Indian packaging market was valued at 358.7 billion units in 2020. As per the forecast, a growth of 6% is expected from 2021 to 2025. The FMCG industry accounts for most of the packaging usage in India, if you refer to data of IBEF will find that Indian packaged food market is expected to double to 70 billion USD by 2025.
Moreover, amid Corona lockdown, the small and local FMCG companies have redefined their niche to do business in a much more robust way than ever before, also during those days government support to SMEs also helped to breathe easy and keep continuing business, eventually with the normalization of the business ecosystem, it is seen to grow amazingly fast as demand increased many folds.
Addressing the Packaging Predicament
For the packaging of finished goods, the local producers of small towns are still dependent on the interstate and distant supplies, which eventually kills the opportunity for price competition and product customization.
The packaging business houses will bring the solution to the local producers by setting up their factories/workshops on the periphery of those local producers.
Concept of the packaging business.
The business as a small-scale industry ideas will venture into the production of package material by factoring in the demand equation in the regional market.
Today every state government encourages SME initiatives in their territory and extends a lot of financial support. Also, central government too has different schemes for the development of SMEs across the nation. With this support and ease of doing business policies it is sure that the business will be able to achieve the goals within a noticeably brief period.
Real world Illustration
Consider a scenario where a small-town SME deals with sourcing and packaging pulses and grains. Traditionally, customized packaging materials were procured in bulk from distant cities. Now, with local access to packaging materials in smaller quantities, cost competitiveness and rapid response to market demands have become achievable, enabling competition with national brands.
Packaging business ideas: Investment, Revenue Model, & Process
As we are referring to the FMCG product line we will take the related packaging line into consideration, for that the business will work with paper, paperboard, plastic, metal, and glass.
The following are the areas of investment.
A. Production Unit (Machinery and Infrastructure). To produce customized paper packets, boxes, metal containers, glass jars & bottles, plastic pouches, corrugated box and wrap materials, and wooden boxes.
B. Print unit
C. Supply chain setup.
- Warehouse
- Carriage and forward
- Distribution.
- Supplying industrial package material to FMCG producers who have their own facility for packaging.
D. Sales and Marketing setup.
E. Licensing
F. Land
The expected capital expenditure is INR 20 million to set up a small unit. [Production capacity of five million worth products]. And working capital should be around half of a million.
Embracing the Packaging Opportunity
With India’s continuous socio-economic progress, the FMCG sector consistently propels its demand. Crossing the threshold of USD 2000 per capita income often triggers an economic boom, and in 2022, we stand at that juncture. The potential within the packaging business is significant and far-reaching.
In Conclusion This packaging business idea offers a gateway to tap into an evolving market with immense prospects. If you’re intrigued to learn more about this promising venture, feel free to reach out.
Wishing you the best of luck in your entrepreneurial journey!
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