Cosmo Films witnesses record performance amid Covid-19

Established in 1981, Cosmo Films today is a global leader in specialty films for packaging, lamination, and labeling applications. Its films offerings include biaxially oriented polypropylene (BOPP) films, cast polypropylene (CPP) films, and soon-to-be offered biaxially oriented polyethylene terephthalate (BOPET) films.

Cosmo Films is the largest BOPP films exporter from India and the world’s largest manufacturer of thermal lamination films. The company offers a comprehensive range of specialty films for flexible packaging, lamination, labeling, and industrial applications, including high barrier films, velvet lamination films, and synthetic paper. Its customer base is spread in more than 100 countries with sales & manufacturing units in India and Korea and additionally sales & distribution base in Japan, USA, Canada, and Europe.

Cosmo Films has won several awards for innovation viz. PFFCA, Asia Star, IFCA& SIES, SAP HANA Visionary, SAP ACE, etc. The Company is strategically expanding beyond Films into Specialty Chemicals & Polymers and the pet care business.

Recently, Pankaj Poddar, Group CEO, Cosmo Films, shared insights with FoodTechBiz about the company’s performance in the previous year. The excerpts of the conversion are given below:

FTB - What was the impact of Covid-19 on Cosmo Films’ packaging segment?

Pankaj Poddar - The impact of the COVID-19 pandemic and the related lockdown is felt by all businesses worldwide. For us, the business is impacted positively for some product lines such as self-adhesive labels and food packaging while negatively for wrap-around labels, textile, and lamination films. We have been adjusting to these challenges by re-allocating our capacities based on the customer requirements.

At Cosmo Films, we have seen this as an opportunity to take our business completely digital. Customers can now use our online ordering system to directly order the required categories and quantities without getting on a call with the salesperson.

We have acquired artificial intelligence competence and are working towards complete automation. We are in the process of moving towards the newest version of SAP HANA, which is an in-memory, column-oriented, relational database management system for the customers. Cosmo is rapidly progressing to take the business to a digital epitome. Businesses should navigate the financial and operational challenges of coronavirus and the lockdown along with rapidly addressing the needs of their people, customers, and suppliers.

FTB – How packaging safety fits with sustainability? Please share your views and observations.

Pankaj Poddar - The pandemic has brought in a lot of perspectives in terms of sustainability with efficiency, especially regarding the packaging industry. We have seen a trend in which people are now opting for packaged food items arising due to increased awareness of safety and hygiene.

Manufacturers have taken up the mantle to help brands and the end consumers with packaging solutions that are not only effective against moisture, gas, and chemicals but are also easily recyclable. There is a significant need to shift from multi-material structures to easily recyclable mono-material flexible packaging structures. With its years of research, Cosmo Films now has a range of barrier and heat-resistant films that can be used in completely BOPP-based structures and can be easily recycled.

FTB - How well is the company growing? Please explain this in numbers for this year?

Pankaj Poddar - In Q2FY22, EBITDA has increased by 54% on the back of higher specialty sales (20%+ growth), better-operating margins, and uptick performance by subsidiaries. Enhanced EBITDA, together with lower finance costs and lower effective tax rate led to an increase in PAT by 83%. The increase in EPS was still higher at 96% due to the buyback of shares in December 2020.

During the quarter, the Company had announced the 1st interim dividend of Rs.25 per share (equivalent to the full-year dividend paid in the last financial year), which had been paid in Oct’21.

FTB - How has the year 2021 been for Cosmo Film?

Pankaj Poddar - The year 2021 has been really good for us. The company diversified into pet care and launched its first experience center and website for Zigly, India’s first Omni-channel platform for pets. The brand has a range of products and services, including grooming, veterinary care, and more under one roof for pets. Under our subsidiary Cosmo Speciality Chemicals has launched 41 new auxiliaries for pre-treatment, dyeing, and finishing for the textile industry. We have also been actively researching industrial-grade adhesives and will launch that early next year.

In terms of our films business, sales for our specialty products have seen a 20% growth, our BOPET line will be active by next year, and we have also announced the commissioning of the world’s largest BOPP line which will be commissioned by the year 2024-25.

FTB - What can we expect from Cosmo Film in the years to come?

Pankaj Poddar - Cosmo Films was established in 1981 by Mr. Ashok Jaipuria with a vision to create a future for BOPP films in India and across the world. At that time, plastic was just the third most used packaging material after glass and metal. Over the years, the company has grown to be the market leader in specialty BOPP films globally and exports to more than 100 countries worldwide, with a total production capacity of 200,000 TPA.

With our entry into the specialty chemicals vertical, we see huge potential growth in India and countries like Malaysia, Bangladesh, and Sri Lanka, where textile production is high.

In the near future, we would like to grow all our established businesses like chemicals, masterbatches, films &Fabritizer, and soon to be established adhesives and Pet Care together as one Group Company.