Kedaara Capital-backed Manjushree Technopack acquires Varahi
Manjushree Technopack

Bangalore-based Manjushree Technopack Ltd said on Thursday it has acquired Delhi-headquartered packaging firm Varahi Ltd for an undisclosed amount to increase its production capacity and client base.

The acquisition will propel the Kedaara Capital-backed company's revenue upwards of Rs 800 crore from Rs 546 crore in 2015-16, it said in a statement.

The deal will increase Manjushree’s production capacity by 20% to 120,000 metric tonnes a year and enable it to make 4 billion containers a year for sectors such as pharmaceuticals and food and beverages.

It will also widen its client base to more than 100 with the addition of customers such as Dabur, SC Johnson, Perfetti Van Melle and Patanjali Ayurved. Its existing customers include Coca-Cola, Nestle, Mondelez, PepsiCo and Reckitt Benckiser.

With this acquisition, Manjushree now has seven manufacturing locations units across India. Its eight manufacturing unit, in Guwahati, Assam, is slated to started commercial operations in January.

Varahi has manufacturing units in Noida, Baddi and Pantnagar. Founded in 1971 by HR Sanghavi, Varahi offers rigid packaging solutions for consumer goods, beverages and pharmaceutical companies. 

Manjushree managing director Vimal Kedia said the deal marks the company’s first strategic investment toward industry consolidation. He added that the acquisition provides Manjushree a strong foothold in North India.

“Our aim is to become a 360-degree rigid packaging solutions provider for brands across India and this gives us an impetus to serve our existing and new clients with world-class packaging solutions,” he said.

Manjushree’s sales will get a boost as it gets access to registered designs and patents filed by Varahi. The Bangalore-based company now owns over 100 registered designs and patents, which will allow it to produce containers from 5 ml to 20 litres, in more than 1,000 different shapes, sizes and designs.

According to the statement, the Indian plastic packaging industry’s output is likely to touch 17.6 million metric tonnes in 2016-17. Demand for polymers, particularly PET (Polyethylene terephthalate), has grown at a compounded annual pace of 10-12% in the last decade. Still, India’s per capita PET consumption at 0.6 kg is far below the global average of 2.9 kg.

The acquisition comes a year after Manjushree raised $23.23 million (Rs 147 crore) from Kedaara Capital Fund and Ladoga Holdings Ltd. for a 24% stake in 2015.

In 2015, Kedaara Capital also picked up a stake in Mumbai-based manufacturer of folding cartons Parksons Packaging Ltd for Rs 200 crore.

In another deal in the segment, Finnish packaging company Huhtamaki Oyj acquired a 51% stake in Valpack Solutions Pvt Ltd, a paper cup manufacturer in Mumbai, for a debt-free price of about €2 million ($2.2 million) in July 2016. In 2014, Huhtamaki had acquired Mumbai-based Positive Packaging for €247 million ($336 million then).

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