Meet the man who built a Rs 158 crore packaging business that supplies to Patanjali, Mamaearth, and FabIndia

When cosmetic or pharma bottles are lined up against a shelf, your eyes first meet the outer packaging—the design and even perhaps the shape of the bottle. Chances are if you picked up a product by Patanjali, Mamaearth, Fabindia or VLCC, you have purchased a AG Poly Packs product too.

When Gaurav Daga left behind a potential career in law to pursue making bottles in 1997, he saw the potential for a large business.

“My cousin told me it was difficult to establish a career in law from scratch. I was thinking of starting a business, when I realised there was not much competition at the time in the new-age packaging sector,” he tells SMBStory.

The packaging industry was rife with issues at the time with glass bottles dominating these industries. These bottles had their own issues, like frequently breaking, making the space ripe for a new solution that was cost-effective and did not break.

This is when Daga began AG Poly Packs and got to work. “We started as distributors for plastic and polymer bottles. These were more affordable, less heavy and unbreakable,” says Daga.

That bet paid off. Today, it is one of India’s earliest companies to implement diverse range of packaging for sectors like pharma, beauty, and food, having clocked Rs 158 crore in revenue in FY-22.

Finding the right pieces

At the time of AG Poly Pack’s inception, there was another prominent player—Pearl Polymers, which was famous for its Pearlpet range and was selling bottles for household needs.

“They were in retail sales, not institutional. A big opportunity arose for plastic in business-to-business (B2B) packaging where bottles could be used for packing and storing confectionary items, tea powder, and other items,” Daga explains.

So, he set out buying products from manufacturers and selling them to customers in pharma and food sectors. Customers also gravitated to this business as they were able to secure things under one roof without looking at different manufacturers, says Daga.

However, he found that expanding the distribution at scale was a challenge.

“Initially, we didn’t even think of setting up our own manufacturing facility. We had good business coming in, but no manufacturing capabilities of our own. It became tough to get larger orders,” he adds.

In 2012, the firm set up its first manufacturing plant in Ghaziabad, which has reached a capacity of 2,800 tonnes annually till date, after which it set up another plant in 2019 with of 2,200 tonnes capacity. The expenditure involved in setting up these units was extensive, says Daga, particularly because customers expected manufacturers to have setups for producing various designs of packaging bottles.

“This was both a challenge and an opportunity. Machine and infrastructure costs were high. But this also meant other firms in this business were not fast enough to grab the opportunity,” Daga noted.

Today, AG Poly Packs gets about 70% of its business from cosmetics firms, while the rest is split between pharma and food clients.

Staying ahead of the curve

“The facilities helped us make our own moulds and designs, and pitching new ideas to customers,” Daga says.

While other packaging firms and distributors predominantly supply to a limited number of industries, or have a limited number of customers, AG Poly Packs is able to offer new products at a quick pace ahead of its competition with these facilities being in-house, according to Daga.  

It is now working on a setting up a new facility in Himachal Pradesh, as it looks to tap into rising demand for packaging products from ecommerce and direct-to-consumer (D2C) brands selling through offline and online retail channels.

In India, the packaging market was estimated at $81 billion in 2021. It is expected is to grow at a 26% rate to nearly $325 billion by 2027, as per data by industry analytics firm MaximizeMarketResearch..

“In FY23, we are expecting to touch Rs 173 crore. When I started AG Poly Packs in 1997, I didn’t think it could ever get this big,” says Daga.