The firm said the investment in Sanand, Gujarat will require an outlay of Rs. 1500 crores over the next three to five years.
In the first phase of the expansion, the company will invest Rs 580 crore to set up an aseptic packaging line for liquid products.
The firm said it will be available to provide the packaging alternative to businesses dealing in liquids like milk, dairy products, and non-aerated drinks.
Market expected to double in coming years
Uflex said the domestic market stands at eight billion packs from aseptic packaging material annually. This is expected to double in the next three to four years.
A rise in the beverage market and an evolved consumer mind-set regarding use of preservatives has contributed to the growth, it added.
The plant will employ around 250 people in the first phase and on completion staff levels will rise to 3,000.
It will produce seven billion packs per year for liquid products such as energy drinks, milk and juices.
Uflex said about 90% of the output will cater to the domestic market.
Behind the growth
The factors supporting growth of aseptic packaging are a growing urban populace and rising demand for convenience food as well as technological advancements that have helped improve the functionality and range of applications, said the firm.
Aseptic packaging is a process in which a food product and its package is sterilized separately and then combined and sealed in a sterilized atmosphere.
Aseptic packaged products do not require refrigeration, can have a longer shelf life and be lightweight.
The Asia-Pacific region is estimated to account for the largest market share, according to an analysis from Reportbuyer.
North America and Europe have many established aseptic packaging companies because of willingness to take up capital intensive projects and availability of technical expertise.
The aseptic packaging market is projected to witness the highest demand from beverage manufacturers with cartons projected to account for the largest market during the forecast period to 2020.
Uflex already makes flexible packaging for solids, semi solids, viscous fluids, powders and granular materials.