In January 2014, team PrintWeek India added another milestone to its name by conducting three roundtable discussions with printers and manufacturers in different parts of the country on the same day. Jaipur was one of the three locations where five young print and packaging entrepreneurs provided a big picture of what lies ahead for the industry under their leadership.
According to an estimate, Jaipur consumes around 1- lakh plates a month. Around 60% of the offset and web printers have moved to CTPs, and automation in plants too is gaining traction— a sign that the industry is moving towards a better tomorrow.
The closed group discussion included Bharat Gupta (Shuban Prints), Anoop Mor (Premier Printing Press), Amit Arora (Graphic India), Rohit (Sanmati Print Solution) and Sharad Mittal (Diamond Printing press). YK Narula, director, YK Graphics and president of the recently formed Rajasthan Printers’ Association, co-moderated the hour-long session.
The group was not only diverse in its approach to its issues but also represented the wide spectrum of print businesses. Shuban Prints is majorly into pharma packaging, Primier caters to both commercial printing and publishing jobs, Sanmati is a well-known pre-press house that is currently working on adding an offset print facility to its portfolio, Graphic is a small commercial printing company run by a print technologist, and Diamond is a known name in the printing business. The hour-long discussion was filled with optimism, vision, and ambivalence.
Mor initiated the discussion by saying, “There is absolutely no doubt that printing and packaging industry is a promising bet. The obituary of print has been announced several times. Whenever a new technology was showcased in the market, the first knee-jerk reaction has been to claim that print will now cease to exist in next ten years. However, despite these claims, print has not only proved them wrong but also grown over the years.”
Hailing packaging as the blue-eyed son of the industry these days, Gupta adds, “Packaging has grown at the rate of 30% in last few years. A good measure of this growth is that Komori has already sold four offset presses in Rajasthan in a very short period of time, and two more presses are expected to be delivered by the end of 2014. When printers from non-metro cities like Jodhpur invest in a high-end offset press, it’s a tell-tale sign that growth in packaging is not an over-estimation by any means.”
Mor agrees that changes in demand has resulted in waning volumes in commercial printing. He, however, adds that the emergence of digital or e-content has not yet lived up to its earlier claims of being the print-slayer. “No doubt that the growth in commercial printing has taken a dip from the early growth figures of 25% to 5% CAGR. But these falls have been registered because overall the marketing budgets have been cut and companies have adopted minimum warehousing policies. The lesser growth was not because there was a wave or shift towards e-commerce or e-technologies. A case in point is the growth of newspapers over the years. People have not entirely ditched their morning newspaper update for even the real-time updated apps or e-papers. The print volumes of brochures and marketing collaterals have been affected by the availability of cheaper mobile devices as people get exposed to brands via these devices,” he says.
Mittal advises that printers should not feign ignorance and instead start adapting to changes. He believes that efforts in this direction are conspicuous. “While the industry will co-exist with these digital technologies, tectonic changes could be seen in how industry adapts itself to the changing market dynamics. Many printers who have established their business by providing only press/printing services are now looking at forward and backward integration by investing in finishing and pre-press units. The customers now want a one-stop solution to their needs. For this, even if the printer has to adopt other technologies or integrate several technologies, they do not care; although it might mean that printers will have to incur additional expenses. The necessity today is to serve; cost-effectiveness is a printer’s devil to be taken care of for ensuring survival.”
Gupta, however, cautions printers, “The flip side of investing in several technologies is that few would not be used as frequently as others. For instance, most of the packaging printers who specialise in monocartons have invested in lamination machines. Since most of the pharma cartons are now designed with elements that require aqueous or UV varnishes, the lamination machine at the unit is seldom used.”
Sanmati, which has established its roots in the business as a pre-press house, is currently implementing a forward integration plan by investing in offset units. Asked if specialised pre-press houses or binderies turn into printing houses would end up moving the industry closer to a saturation point, Rohit disagrees. “The market has enough for each printer to survive but only if it provides the right solution to the customer. Today, the customer’s purchasing power has increased. He feels that his money has lesser value than his time,” he says.
Challenges can be countered
Three prime pain-points which emerged during the discussion were the ever-decreasing turnaround time for jobs, unavailability of skilled or semi-skilled labours, and lack of an industrial belt in Rajasthan. YK Narula says that entering packaging domain is “wishful thinking” as printers have to venture out to industrial clusters outside Jaipur to find clients.
Arora adds, “The turnaround time for the jobs has decreased manifolds over the time. This has put printers in a strenuous position. However, it’s the printers who have brought this situation upon themselves. If you decline a job or ask for more time, there are others who will leave no stone unturned to please the customer.”
With the unavailability of skilled and semi-skilled labours, Gupta feels “poaching” is the only means to meet manpower needs. “We have to hire workforce from other leading players of the industry. The situation is so grave that we faced a hard time searching for an operator to run our Bobst machine.”
Mittal says successful printers always have a plan B in place whenever they are faced with manpower shortage. “In case of exigencies, the team should be capable of handling production without any effect on volume or turnaround time. Also, if the owners of the unit understand each aspect of production the workforce they can pitch in, if need be. The thumb rule is to employ three teams of operators for each machine.”
Rohit feels having a plan is neither enough, nor pragmatic. “We need to have more training programmes and packages that would lead to skilled employees. Not only labours but even owners need to acquire training in various departments,” he says. Mor says that another way out is that each company should enlist or enrol a batch of five to ten print students and train them on shopfloor.
However, Gupta points out that while the idea is good and practical, it also is marred. “We employed seven students from Ajmer and trained them at our facility. Today, they work with another packaging company. So if the intention is to retain the interns, the whole reason of adopting such initiatives goes for a toss. Printers should accept and understand that even if they lose few of the students, finally the industry is going to benefit as well as they too have the opportunity to hire bright talents.”
Mittal cautions, “Partial decentralisation is must. A dedicated team for handling the departments is necessary. The market demands that you need to run fast and longer distance in the relay race to achieve success; a well-balanced team is much more superior to a team with one sprinter.”
Gupta also feels a greater threat lies in the lackadaisical approach that many printers are adopting. “Printers are also not traveling out of their bases to look for opportunities. I recently travelled across the state and found that there are 17 distilleries in Rajasthan, which caters to over 60% of the Indian manufactured foreign liquor brands. A closer inspection showed that those catering to these distilleries are leading names such as TCPL, Borkar Packaging, Parksons, etc. which are even further away from the state.
We have been talking to many brands and informing them that if they deal with printers from the region they also benefit in the form of tax saving. A 2% CST is saved since we do VAT billing. Plus there is the excise duty exemption of 2% extended by the Rajasthan government,” he adds.
Gupta also feels that new generation entrepreneurs now are willing to invest in their branding, marketing and research to broaden their client base. “When I started with commercial printing in my unit, I was working for almost half the price than several other leading printers by printing on my new machine. Since they were already producing with a good profit margin, they feel the need to venture out and explore the market; whereas I had no other option.”
Another major hurdle in finding stability in growth is incessant increase in the raw material cost. Mor says, “Several printers have signed annual contracts with their customers. In such circumstances, it is difficult for us to pass on the paper cost increases to our customers.
However, we do engage and discuss with our customers and most of them agree to share the burden in phases. The competition is so thick that if you decline a customer over price-point, three other printers would be willing to work at a lower price. The two methods (out of several others) by which printers are increasing the cost per print is by convincing their customers to offer innovations in the job or by increasing the credit period of payment.”
Gupta registers his mild disagreement with the generalisation of the statement, and adds, “When it comes to packaging, the issue becomes slightly more critical as there is hardly any scope for innovation. Starting from material, features, design to finishing, everything is pre-decided by the customer. Overall, I feel innovation doesn’t fetch you price but only new clients.”
Narula feels that the challenges are the same across the country and pitches in with a suggestion. “In terms of capabilities and machine arsenal, printers of Rajasthan are second to none. The only difference is that printers in metros are ready to invest in the market and figure out profitable business propositions. The need of the hour is to change the mindset of the printers. Printers need to understand the corporate client’s mentality and need and work a backward integration process. My request for the young guns of the industry is to take a pause and carve out niches and segments where they can be the best. The idea is to find a category where they can ask for better prices. This can only be achieved if printers understand its unit’s strong and weak points.”