When the fresh-faced son of a tinplate trader took over the running of ailing Hindustan Tin Works Limited (HTWL) in 1977, few predicted he’d turn the company around – let alone spark a revolution in the Indian canmaking industry in the process.
But from such unlikely beginnings a pioneering legacy was created that is still influential on the subcontinent today.
Sanjay Bhatia had no experience in manufacturing and little more in handling the material his family had been trading for years. Once at the helm of HTWL, however, he acted on a hunch that consumers in the world’s largest democracy would prefer to buy their drinks in cans.
It was a bet that paid off. With second-hand equipment and a lot of nerve, HTWL made the leap into drinks cans that would transform the packaging landscape in India. Almost single-handedly, Bhatia’s HTWL created a market where one hadn’t existed. Total demand was about 50 million when HTWL bought its first D&I production line – it’s now more than two billion and growing at double-digit percentages.
“We are proud to be where we are,” he tells The Canmaker. “I am proud to say that our company was the pioneer in canmaking in India.”
Bhatia is 67 now, one of the most revered names in the canmaking business, a captain of Indian industry and a figurehead for the subcontinent’s manufacturing sector.
But as a 25-year-old, only two years out of law school and just getting used to working at his father’s trading firm in Delhi, he was thrust into the driving seat of a company he’d hitherto known only as a customer.
HTWL was formed in 1958 but had fallen into financial troubles in the 1970s due to mismanagement exacerbated by a series of punishing labour strikes. Unable to pay the Bhatias for the raw materials it had bought from them, HTWL offered itself up for sale, and Bhatia’s father signed a cheque.
“Tinplate has always been in our blood – we knew the production process and had excellent relationships with lots of mills,” he explains. “But the first few years were very tough for me because I had no manufacturing background. The only advantage I had was that I knew tinplate very well – which is 75 per cent of the cost of a metal container. So it was thought I’d be able to manage.”
As well as labour unrest, Bhatia had to also deal with a workforce that didn’t trust their young new chief executive.
“They had problems accepting a young 25-year-old at the company,” he says. “There was very low morale at that time – people were worried about whether they would keep their jobs or not.”
HTWL’s problems looked terminal. With between 150 and 250 employees and few contracts it seemed unlikely the canmaker would survive. Its machinery was outdated and so were its work practices; operations were semi-manual and the cans still used soldered side seams.
“So we bought a side-seam welding machine and gradually we built the company back up,” Bhatia explains.
By the mid-1980s, the company had modernised and was prosperous. One of Bhatia’s proudest boasts is that at a time when much of India’s economy was hamstrung by strikes and walkouts, HTWL flourished.
Then came the big break. Indian canmaking had been dominated by smaller, and often foreign-owned, companies. But by the early 1990s that changed.
The country’s unpredictable economy put paid to venerable businesses, such as Metal Box and Poysha Industrial, which packed up and went overseas or simply folded. Either way, they left gaps in the market that Bhatia was only too willing to fill.
“There was a big opportunity and in 1995 we made some big investments and went public.”
Among those investments was the purchase of another ailing company, Conwell Cans and a second-hand D&I steel canmaking line from the US.
“Because of our exposure to overseas business by that time – I had visited two-piece plants outside of India – there was a keen desire that I should also bring two-piece can manufacturing to India,” Bhatia says.
By his own admission, the production line that Bhatia bought was “not a great machine”, but it was in good condition. Formerly owned by a steel mill, the pilot line had only been used for in-house testing.
It lacked a decorator, inside spraying machines, curing ovens and many other processes necessary for a full canmaking line, so HTWL bought all of that separately.
“It became a very big investment,” he says. It was also a big risk in a country that until then didn’t have much demand for canned drinks.
India has an unusual market profile when it comes to metal packaging. Even now, tinplate dominates the industry and within that sector, general line cans – especially large rectangular containers for cooking oil – account for almost half the metal packaging produced. Even the canned food segment is limited in a country that has culturally preferred to cook with fresh ingredients.
“Demand was definitely there, but it was small,” explains Bhatia. “Beverage cans were imported, already filled, from Thailand and other countries.” HTWL’s newly acquired production line offered the canmaker potential to capitalise on changing tastes.
“At that time, the Indian market was only 50-70 million cans per annum. Our line could make 150 million. It was a low investment and a good start.”
To scale up, HTWL needed financial help and Bhatia began courting potential investors. The result was a joint venture (JV) signed with UK-based canmaker Rexam.
The newly formed Rexam HTWL Beverage Can plant began operating
in 2007 with Bhatia as managing director and his company the 49 per cent junior partner.
“It really gave us a good platform for international exposure,” he explains. “We carried out market surveys – talked to Coke, Pepsi and United Breweries – everyone told us that if there was can manufacturing in India then there were good prospects of growth for two-piece packaging.
“They were looking for an alternative packaging – this was the time of glass or plastic but they wanted cans. The business grew as demand grew – we built up demand to what it is today, about two billion cans a year.”
Rexam HTWL prospered at a time when western products were growing in popularity. India had begun opening up its economy and globalisation was bringing more imported goods into the country. In many ways it became a victim of its own success: the demand it had stoked by opening a canmaking plant brought competition. The first international canmaker to arrive was Canpack, which built India’s first plant for making aluminium drinks cans in 2008.
The Poland-based company’s arrival turned the market on its head. With its cheaper cans being produced at a faster rate than Bhatia’s plant could manage, it was just a matter of time before the days of D&I tinplate beverage cans would come to an end.
“By then the brand owners, like the beer companies and the likes of Pepsi, had also built their own filling line or two and the more they built, the more demand went up,” he says. “We saw it would be difficult to compete with an aluminium can player because aluminium cans are comparatively cheaper – and you can always hedge it – you can see the long-term price of aluminium but you can’t in tinplate.”
HTWL didn’t go out without a fight. Bhatia had initially approached India’s largest steel maker, Tata, to see if it could produce tinplate cheap enough to compete with the aluminium lines. The answer, though, was no, and in 2012 the JV company converted its own line to handle aluminium.
But Ball’s purchase of Rexam in 2016 was the final nail in the coffin. The JV was dissolved and HTWL went back to tinplate can production for food and general line applications.
Today HTWL employs 700 people and is listed on BSE, formerly the Bombay Stock Exchange. Although a medium-sized company by modern canmaking standards, the HTWL name carries a lot of weight in the Indian metal packaging industry. It is among the largest makers of tinplate products in a country where aluminium beverage cans still only account for about a quarter of metal packaging output, according to Madras Consulting Group.
HTWL’s biggest orders are coming from makers of dairy products, including infant formula and condensed milk, as well as edible oils, paints and ends for export.
Anywhere else, Bhatia’s HTWL would be on the weaker side of the equation. But demand for tinplate cans in India remains strong and Bhatia is optimistic that it will remain that way as environmentally savvy consumers follow global trends and shun plastic.
“The movement against plastic is worldwide,” he says. “The brand owners are now looking at metal once again. I don’t see that happening immediately but maybe after two-to-three years, I think metal packaging will grow much more than it had in the past.”
He sees further growth in the dairy sector and – as the nation’s eating habits change and a growing number of women go to work – packaged food using cans.
“We expect an increase in demand post-Covid too,” he says.
Bhatia describes his life and career as being a “challenge, every day”, none more so than when one of his two sons Atit died in 2017 at the age of 35. The experience was “a great setback for the family” he says reservedly.
Undaunted, Bhatia fought on. He’s the president of a leading chamber of commerce and represents Indian employers at the International Labour Organization in Geneva. But it’s as president of the Metal Container Manufacturers’ Association (MCMA) that he has been most vocal in recent years, battling the Indian government’s plans to restrict tinplate imports and introduce anti-dumping measures. It’s a fight that has put him in the role of David to the Goliath of India’s steel giants Tata and JSW Steel.
“We are pushing the government to give some incentive to the tinplate user,” he says. “These are generally small companies and they need all the help they can get – there are many thousands of jobs at stake.”
HTWL is run jointly with his son Saket these days, enabling Bhatia to devote more time to his other activities. But it’s apparent he still loves the business he rescued from the scrapheap and made a potent industrial force.
“From a very small canmaker owned by a sick company we became one of the leading companies in India and a pioneer in bringing beverage cans to India,” he concludes. “We have done many firsts in the sense of getting high-speed lines and getting equipment that wasn’t in India – and others followed us. I have a lot of satisfaction knowing that I have represented not only HTWL but also India.”