A Joint Venture between Indorama Polymers Public Company Limited, the world’s sixth largest PET resin producer and Serm Suk Public Company Limited, (itself a joint venture with Pepsi) is on a fast-track expansion programme.

According to AK Kohli, Asst. Vice President, Petform, “We are coming out of a period of slow market growth and into an expansion and development phase which will see us grow the business by expanding existing product offerings horizontally while developing new lines to assist our customers address the changing consumer tastes in Thailand and the region”.

Initially a preform supplier, Petform has four Husky lines with a fifth under erection and is in the process of moving from a standard 48 cavity mould configuration to 72 and 96 cavity moulds to keep the same footprint but increase volumes. It is a steady growth business with sales mainly to its Joint Venture partner Serm Suk, and other PET bottle blowers throughout the region.

As a joint venture between local Thai investors and PepsiCo (Pepsi’s only direct investment in bottling in Asia) Serm Suk has its own bottle blowing lines and buys all it’s requirement of preforms from Petform. It also buys blown bottles from Petform, in addition to blown bottles from other bottle makers in Thailand, and Petform supplies most of the performs even to other bottle makers.

However, implementation of PetForm’s bold growth strategy began with an aggressive move; the commissioning, in April 2006, of two Sidel SBO Universal machines.

It was a global first for Sidel in this series as Petform took delivery of the two machines off the Sidel production line.

“We have configured them as two separate and dedicated lines one for water and the other for CSD, mainly in the 600ml and 1.25 litre sizes, although we can go up to 1.5 litre and do on occasion when the customer demands” says AK Kohli “Typically we are running at speeds of 1,800 bottles per mould per hour, which translates to approximately 14,400 bottles per hour, the highest achieved by the industry as of now.

“As a Joint Venture, Petform’s priority is to service our JV partner, Serm Suk. However, as we expand capacity we have been able to supply Pepsi units in other countries in our region and have exported as far as the US territories still within the Pepsi group”.

Developing line extension

With a product portfolio limited mainly to CSD and water, Petform is developing new ranges to service an expanding demand for PET both locally and regionally.

“The supplier’s relationship with the brand owner in Asia can be very different from the way things operate in other parts of the world” adds David Bull, a Crown Cork & Seal veteran closures expert, whom Petform management drew into the business as consultant, after one too many corporate re-structuring exercises at Crown. 

 “In Asia, less so than in more mature markets, we find that not only do we have to work as a manufacturer and supplier, but also as a technical support base, since typically the customer’s expertise is in filling, often filling only. So we have to develop our competencies not only in the manufacture of our product, but the application of it as well.”

The global trend is towards light weighting and Petform has lightweight bottles undergoing a series of extreme tests.

Kohli; “Back in 1995 a typical 1.25L PET bottle was around 45 grams, but as resin prices increase bottle weights have come down, typically the same bottle today being targeted at 40 grams. This saves on price, that much is obvious.

“But when you live and work in countries with high humidity and high temperatures, you have to have a different perception of the package tolerances than in temperate regions. A typical CSD bottle can be standing in a small non-air-conditioned Mom & Pop store shelf where the temperature can reach 50-55oc in the shade, so a lightweight PET bottle has to withstand that”

Asian bottle makers have to consider high top-load testing of their bottles and factor in the impact of extreme temperature changes on both the product and the material: An understanding of shrinkage and blow-offs which bottle makers in temperate climates rarely have to consider.

“So while producing light weighted products give a cheaper bottle the level of technology and customer support has to be greater.” Adds Kohli.

Understanding local conditions extends through the entire production process as far as the loading bay: Deliveries from Petform don’t start until after sunset in the evening, when a specially adapted trucks leave the loading bays, between 8pm to 8am. “PET is susceptible to heat” Kohli points out “In the Thai climate, day time temperatures inside the truck can climb to above the 50-55 degree range – even in one fitted with ventilation systems”

Seeking Closures

On the closures front, the testing and technological development is the same “We have to be ahead of the problem before it becomes a problem” says David Bull whose years of experience in Asia are fully explored as he plans to build the Petform HDPE closure business from a 540 million annual capacity two billion within a 3 year timeframe.

“We are looking at the closures we have available at the moment and exploring the versatility of their application. For example, closures designed for CSD could migrate to slightly carbonated drinks. Closures for water – could it be used on fruit juices?

“We’ve been testing our hot-fill closures and we now know that we can safely use them with filling lines of up to 95oc.

“It isn’t as simple as just buying a machine and ramping up volume, the objective is to take the main products we already have and expand their application to other newer products which we know will be coming to market in the near future.

Knowledge of production practices in Asia are invaluable, recently David Bull’s team has been testing for strip-torque: “We’ve been pushing the limits to see what happens if the filler over-applies the closure, as happens – is our closure going to missile? We can’t afford it to missile so we extreme test our product. Our closures are designed for safe use by inbuilt designing features.

Petform is also developing a parallel expansion track for it closure business; “We have a tampo-print for top print line for closures, with inks imported from Europe and clichés for printing  also coming from Europe since they aren’t available in Asia, this drives the cost of printing up to the point where it is too high.

 So we will be replacing this system with a 4-colour offset printing press running 4,000 caps per minute, and a full compression line, by replacing tampo-print we can manufacture the plates in-house and buy our inks locally.

But it is in the expansion of closures business into new territory that Petform is rapidly growing, particularly in the area of glass bottles.

Glass dominates the market in much of South East Asia and though the trend is towards PET due to reduced transportation costs, washing costs and concerns about hygiene, glass will be the dominant beverage format for the next ten years at least.

“In Asia glass has a shelf life of around nine months, while PET has a maximum shelf life of 12-16 weeks.” Says David Bull “And because glass is returnable glass bottles can be reused again and again sometimes for up to 10 years.

 “Applying a plastic closure to glass is different from PET, and in Asia the condition of the glass is not good, because it is returnable – threads can be worn – so capping machines have to be set precisely to avoid failure of the closure.”

 It is a new market for Petform which not only involves testing and developing the closure, but also travelling the region assisting fillers calibrate their capping machines precisely.   

In markets like Thailand this hands-on developmental approach lends a level of exclusivity to PetForm’s offering, The personal training, and skill  development  is  the  most  important  aspect  says  David  Bull.

“Well, that is until the competition tries to catch up with us, and hopefully by then we will have newer products which will keep us ahead.

“In our region, the brand owner is the one who is listening to the Asian market sees that the customer’s taste and requirements are changing, and maturing. Consumers are now looking for teas, hot-fill fruit juices, different flavours. They recognise that as they develop new beverage lines they don’t always have experience in how to pack it.

“So they come to us and say ‘This is a launch we are planning - how do we pack it?” In turn its our job to give the best advice we can, and the best product which they can test on their line and follow up with the technical support to put that product to market – if it goes wrong, we get the blame, if it goes right they get the credit, we get the sales – who needs the credit?”