Startup

Aluminum Foil in Terms of Packaging and Market Dynamics

05 Oct, 2019

Nowadays, aluminum due to its intrinsic, strength to weight ratio, electrical, versatile properties of lightness and nontoxicity has been used immensely in making kitchenware, electric Conductor and railway wagon to Apollo spacecraft. Aluminum foil is considered to be a good source of packaging material^[1] as it results in longer shelf-life of end products.

What is Aluminum Foil in terms of Packaging?

In terms of Packaging, an aluminum foil, a thin sheet of metal has been used immensely. It is considered an absolute barrier against moisture, bacteria, molds, odors, and gases.

What are the Market Dynamics of Aluminum Foil?

Owing to the use of foil in various products, the growth of this industry has been increased in the recent past. India is considered to be one of the key producers of aluminum foil in the region. It is the 275^th most traded product in the world. The change in food habits due to a busy lifestyle, growing demand for ready to eat confectionaries and pharmaceutical products has increased the demand for this industry.

What is the role of FSSAI in this industry?

FSSAI has played an important role in the growth of this industry, by making the regulation, which made mandatory for the manufacturer for an effective packaging solution that prevents the food from being contaminated.

Market Segmentation of Aluminum Foil

The market for aluminum foil has been segmented into the following ways:

What is the status of Aluminum Foil in the Global Market?

As per the analysis, the aluminum foil packaging market was valued at USD 18.912 billion in 2017 whereas, it is expected to reach around the value of USD 23.166 billion by 2023, registering a CAGR of about 3.27% during 2018-2023.

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In regard of this packaging, the prosperity of the market is a reflection of a number of factors, such as high preference for convenience packaging, growing demand for extended shelf-life of packaged food, the popularity of ready-to-eat meals and processed food, and growing usage in pharmaceutical products and confectionaries.

Which are the major players in Aluminum foil market?

Import of Aluminum Foil in India

In India, the consumption of such foil sheet is growing fast because of the increasing middle class with growing disposable income and strong economic growth. As per the analysis, it has been found out that, India has imported 1, 20,133 tonnes of aluminum foils in 2015, whereas it has been increased to 1, 42,603 tonnes in 2016.It has been forecasted that in the first, eleven months of 2017, the volume of import has been increased to total at 1,48,655 tonnes.

Export of Aluminum Foil from India

In the case of export, it has been found that India has exported approximately 14,512 tons of Aluminum Foil, which has been increased to a total of around 16, 448 tonnes in 2016. In terms of export it has also been forecasted that, in the first eleven months of 2017, it will increase around 16,035 tonnes.

Import duty on Aluminum Foil

Aluminum Foil is imported under HS Code 76071190, 76072090, 76071999 in the following manner:

Basic Customs Duty – 7.5%

IGST- 18%

Compensation Cess-0%

Total Duty- 26.85%c

Cooking food in aluminum foil could be Toxic to your health

As a part of the natural digestion process, traces of aluminum get expelled from the body from the food which we eat, but in case, if the amount gets less expelled than ingested, then it will cause toxicity which will in return affect the health of a consumer.

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The intake of aluminum above the prescribed limit is harmful to the people suffering from bone diseases. As per WHO, daily intake of aluminum of 40mg per kilogram of body weight is within safe limits. Thus, the migration of aluminum into food during the cooking process of food wrapped in aluminum foil is above the prescribed limit.

What are the permits and licenses required for Initiating this business?

Company Registration: The first and foremost step is to get it registered in the form of an artificial legal entity like proprietorship, limited liability partnership or Company.
GST Registration: Every business carrying out a taxable supply of goods or services and whose turnover exceeds the threshold limit is required to get register and obtain GST number.
FSSAI Registration: For every manufacture of aluminum foil it is mandatory to take FSSAI approval, for making an effective packaging solution.
PF Registration: If in the manufacturing unit or company there are more than 20 employees, then it is obligatory upon the unit management to obtain EPF registration.
ESI Registration: For all Businesses, it is mandatory in India to obtain Employee’s State Insurance (ESI) registration if they employ 10 or more employees.
Pollution Certificate: Every establishment before commencing its activity has to obtain No Objection Certificate from the State Pollution Control Board.
Trademark Registration: it is mandatory for the applicant to get a trademark for its product in order to maintain the uniqueness of its product.