‘Our journey is the highest’

EPL Limited, formerly Essel Prop Ltd, is transitioning from a family-run company to a professionally-managed global packaging giant under Blackstone, which took a controlling stake in 2019. MD & CEO Sudhanshu Vats Speaks about four pillars that will support the company’s growth plans. Part:

EPL is the largest specialized tube manufacturing company. We do about 8 billion tubes worldwide in 20 plants located in 10 countries. It is the largest manufacturer of laminated tubes in the world.

The transition from family ownership of Ashok Goyal, who was previously the CMD of this company, occurred in 2019 when Blackstone controlled shares in this listed company. In FY20 we translated 48 2,748 crores in revenue, around ₹ 558 crores in EBITDA and 23% EBITDA margins, and around ₹ 250 crores in PAT.

We are one of the most profitable global packaging companies. Our mission is very clear as we begin our transformation journey. We aim to provide market leading revenue growth and capital efficient stability in earnings growth. We have done very well on this trip. Even in such a rigorous COVID year, we have been able to deliver double digit revenue growth in the first 9 months. [10%] And EBITDA margin increased by about 14% with EBITDA margin of about 20.8% with an expansion of 60 bits.

Therefore, our journey on providing continuity in revenue growth and income growth continues and I am happy to state that in the last two years we have actually employed our capital at 17.8% to 22.3%. There are not many companies that I know of that have achieved this in a very short time and have done so well. We are very ready for the future. The future is suitable for us.

This is our most important strategic thrust. Our global customers, many of them global big companies, have all set their goals for sustainability by 2025 until 2025. Most of them have converted their targets to 100% recyclable packaging materials. We, as a responsible packaging company, are fully committed to sustainability. We are looking at it from all angles – 3Rs – recycle, reuse and reduce.

The work we have done in recycle is capable of delivering and making recycle laminates. We do our films ourselves. Now, we have come out with durable laminate under the brand name Platina. It now has a portfolio. We are continuously working in making 100% recycle laminates. We are fully prepared for the future.

Towards reuse, we started making tubes from recycled materials. The first set of tubes for our two customers has been revealed. So far, we own 35–38% of the recycled content in our recycled tubes.

On reducing, we are doing a lot of work. We are reducing the amount of plastic that is needed. If earlier the tube was going with 500 micros, we are now able to give the same experience with 300 to 350 microns. Therefore, we are reducing the use of plastic. For the future, we are also looking at alternative materials, biopharmaceuticals which can be called bioplastics. We are working on it.

We are the first company in the United States to receive 100% recyclable full tubes (laminate, cap and shoulder) from the Association of Plastic Recyclers.

As a responsible company, our CSR program has sustainability, to give back to the community. It is about waste management and the whole cycle. We are also leaving people in permanent manufacturing. I am very excited about this transformation journey as we move forward, as we are committed to long-term digit revenue growth for the medium-term, mid-teens EBITDA growth and high-teens and low-twenties growth in the medium-term.

EPL was also a very well managed company in the past. Therefore, our journey is somehow higher to higher. The work we are doing is really the digital transformation of the company. So, it is about bringing about digital processes and automation. We are moving to data analytics and using real-time information to bring transparency. In the future, we are looking at artificial intelligence and machine learning. In terms of governance, we are committed to the best in the class of governance. We have also brought in talent management processes.

In total, our Parivartan Yatra will run on four major pillars. It will be on sustainability, digital transformation, talent management programs and innovations.

We have 4,000 people working with us in 20 plants. We have 7 plants in India, 5 in China, three in Europe and three in the US. We have a global footprint. Some of our customers are the biggest names in FMCG and Pharma sector. We look at the market in 5/2 lenses. Oral, Beauty & Cosmetics, Pharma, Food & Home. We have two types of customers. MNC and local. Our outline has been prepared for this. We will keep working like this. We will continue to grow organically and inorganically. We have just acquired in India. We will continue to see acquisitions everywhere as long as they help us acquire new customers and acquire new categories, new geographies or new technology. We are fully committed to double digit profitable growth and consistent market leading revenue.

We are a global leader in oral. One in three tubes in the world are made by us orally. We want to dial our share in beauty and cosmetic and pharma. Therefore, from the category point of view, we are looking for companies in these areas. We can see a company if it is getting us a big customer as well.

To achieve our goals we are incurring a capital expenditure of about ₹ 230- will 240 crores per year which is actually our depreciation number.

We are a very innovative company. Our agility and innovation allowed us to challenge COVID in one occasion. Therefore, we entered the year COVID with the introduction of hand sanitizer tubes and made 100 million tubes of hand sanitizer. We partnered with 50 brands from all over the world. It really helps us in a real tough year. It was a difficult year for us in terms of management of manufacturing plants under COVID conditions, worldwide lockdown. We navigated all challenges well. Beauty and cosmetics and travel tubes were affected but other segments performed well. Our geography and category portfolio really helped.

We want to lead the pack.