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Satia Industries ties with US-based brand Zume for supply of patented paper cutlery products

The Company expects approximately 2000 MT of orders annually in the first year from Zume.

May 04, 2021 11:42 IST | India Infoline News Service
Satia Industries Limited, one of the largest Wood and Agro-based paper manufacturers in India with a fully integrated manufacturing facility, has entered into a formal association with Zume for supply of Paper Cutlery products from this quarter i.e. Q1FY22.

SIL has entered in a formal association with Zume, a US-based global brand in sourcing of packaging products used for meal boxes, beverages and Face Masks, etc.

Zume has a global presence for sourcing patented paper cutlery products with an agenda of creating sustainable packaging products and solutions using advanced, molded fiber, using 100% compostable raw materials such as bagasse, wheat straw, hardwood, softwood and bamboo pulp.

Zume’s proprietary design, prototyping & manufacturing technologies enable replacement of singleuse plastic with 100 percent compostable plant fiber-based products while enhancing consumer experience and providing a viable alternative to plastic and Styrofoam packaging across the globe.

Zume has agreed to share its patented rights with SIL for manufacturing packaging product as desired and demanded by the global market. The expected average realization will be between Rs250 - Rs300 per kg, which is higher by40-50%compared to local market realizations.

SIL expects approximately 2000 MT of orders annually in the first year from Zume.

SIL has installed two Table cutlery machines, each with an annual capacity of 2000 tonnes.The erection and installation work is in progress and expected to be commence commercial production in the current quarter i.e. Q1 FY21

Commenting on the association withZume, Mr. R. K. Bhandari, Joint Managing Director said, “Amidst 2nd wave of Covid19 in the country we have earmarked a significant milestone by inking a partnership with a global brand Zume starting with a production capacity of 2,000 tons per annum initially for making anti-leak with snap-fit lock, ideal for take-outs & food delivery products for food packaging which we plan to be FDA, OK COMPOST, and ASTM guidelines compliant and necessary approvals as being pursued in the domestic and International market.

Besides, we propose to enhance our expertise through this association with Zume in providing customized moulded fibre packaging solutions across multiple industries such as Food, CPG, Electronics, Cosmetics, Healthcare & Pharma and thus expanding our product offering basket. This segment is expected to grow multi-fold and our infrastructure is equipped to match the growing demand over the years.

According to FICCI, Indians consume 11 kg of plastic per year in comparison to 109 kg by an average American and this figure is estimated to rise in the coming years. Our Prime Minister has also announced national policy announced its commitment to eliminate single-use plastic by 2022- one of the most ambitious targets in the world. Presently India generates 9.46 million tonnes of plastic waste annually, of which 40 per cent remains uncollected and 43 per cent is used for packaging, most of which is single-use as FICCI study has revealed.

The market potential for this is estimated close to Rs80,000cr and paper packaging products are likely to capture a substantial share out of this. Our product shall be fetching better realisation because of the patented custom designed product resulting in high EBIDTA margin of 35- 40% approximately.”

Satia Industries was trading at Rs87 per piece higher by 3.02% on Sensex, at around 11:43 AM.

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