Date:27/08/2005 URL: http://www.thehindubusinessline.com/2005/08/27/stories/2005082702420200.htm

Back Shree Rama Multi-Tech plans to challenge Tetrapak monopoly

Gaurav Raghuvanshi

Ahmedabad , Aug. 26

SHREE Rama Multi-Tech Ltd, an Ahmedabad-based packaging solutions provider, aims to challenge the monopoly of Tetrapak by launching a product that can keep liquid foods fresh for nearly 10 days.

The company also claims to have the technology to supply packaging materials to the fruit juice, oil and milk producers who source the special grade plastic film, foil and board used to pack liquid foods from Tetrapak and use its machines to fill their products.

"Tetrapak insists on supplying the packaging material to its customers. User companies had no alternative till now. We have now developed the packaging material and are pitching it to companies whose exclusive sourcing agreements with Tetrapak have expired," says the Shree Rama Chairman, Mr Vikram Patel.

Shree Rama has already carried out trials with the Gujarat Cooperative Milk Marketing Federation, which markets the `Amul' brand of milk in cartons. The company is also in talks with a couple of companies that are planning to enter the Rs 600-crore liquid foods packaging industry.

"We carried out a study that revealed that the Indian consumer is not very comfortable about consuming milk that was packed several months ago. That led us to develop a cheaper packaging product that can keep milk fresh for 10 days," Mr Patel said.

The company is in talks with a dairy in the South that supplies milk to the Andaman Islands. It takes about seven days to ship across the milk by the sea route and a Tetrapak brick (one litre container) costing about Rs 2.50 per unit is not the most feasible option, he said.

Meanwhile, Shree Rama hopes that its financial restructuring package that has been approved by the lenders will be cleared by the Gujarat High Court in the next few weeks. As per the package, Shree Rama would pay Rs 484 crore over the next 10 years to its lenders.

The amount, which includes both the principal and interest components, may get reduced if the lenders exercise the option to convert part of the debt into equity, Mr Patel said.