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We want to be the best in school book printing

30 January 2016

In a freewheeling discussion, R Jayaraman and Ravi Karthik of Multivista Global, Chennai’s book printing major, share their insights into the survival and impressive growth of their company in the volatile Chennai market with Ramu Ramanathan

p9250057 Jayaram: "The right investments also matter."
RR: In terms of Chennai printing, what are your thoughts on the decline that we are hearing about and do you see a revival?
R Jayaram (RJ): In South India, the majority of the printers are into commercial printing. They saw plenty of opportunities a decade or so back which was efficiently capitalised.
 
With the advent of technology and the embrace of digital technology, today printing brochures, catalogues are seen as an excess, and much of this can be seen being done on the digital platform, which is on the move.
 
Digital printing has affected major printers. Many printers failed to transit from the commercial printer mould.
 
Earlier, we used to print lakhs of annual reports but these days the trend of printing annual report in itself is on the wane. Whether it was a good decision or bad one, but we focussed on book printing. The risk here (in book printing) is that you are investing today and you will reap the rewards in the future.
 
Ravi Karthik (RK): He (Jayaraman) saw a whole new bunch of printers into the then traditional commercial market space and at the same time he saw a demand for books on the rise and influx of jobs simultaneously. I guess a sum of all this made us take the plunge. You need the muscle power to stay in book printing and keep investing in press and post-press; you need to stock 1000-2000 tonnes of paper in anticipation plus millions of books as finished product. To do these things you need working capitals because it’s costing you. As a standalone business, book printing may not be that easy to sustain but with the help of allied businesses to support you, it helps balance the books.
 
RR: The shifts from Velachery to here? Two questions, one, do you consider it to be a good decision, and two, what is the plan going to be with this plant?
RJ and RK: It was imperative for us to move from Velachery, which was inside the city, and we were operating from 2 different premises. We were cramped for space, as we required a lot of space to warehouse paper, and finished books as well. Plus we were focussing on partnering with multinational publishers, who had certain pre-requisites in terms of infrastructure, environment, state-of-the-art facility etc. Since our expansion into this new unit, we have managed to rope in those publishers, which would not have been possible if we had stayed in Velachery. Hence, it surely was a good decision to move to a much bigger, fully integrated unit.
 
Our vision is to focus and invest on technology that will mutually benefit our customers and us. Ever since we moved in here in 2007, we have constantly added more print/bind machines, and will continue to do so. This is a capital intensive industry, and return on investment will take years.
 
RR: So the vision for the building in terms of design and the machine placement, storage planning etc, did this come out of internal brainstorming?
JR: This came out of a practical experience of working in our earlier plant which was inside the city. We were cramped for space and realised we needed a lot of space for warehousing raw materials and finished books. We also visited a lot of MNC plants in and around Chennai, and few other production facilities in Europe, and were able to communicate to our architect on the overall outlook of our proposed factory.
 
RR: I would ask the same question which I had asked Karthik earlier: How did you groom so many people from the grassroots to become independent executives who manage verticals on their own and how is it that they have accepted the technology?
JR: Let me take the instance of Rajagopal (my uncle’s son). He landed in Chennai from Kumbakonam with experience of working in an automobile machine company, and no formal education in printing. We made him part of the press at the time we started the operations, gave him complete freedom to take charge of the machine maintenance and repair. Today, I can proudly tell you that he can easily fix issues on any of our Heidelberg machines. Sometimes people from Heidelberg come down to our plant and get some nuances clarified with Rajagopal, especially on the mechanics of it.
 
Being a family-run business, and a well-knit unit, we tend to focus on the growth of each employee, and try and give them maximum freedom to develop/innovate/take decisions.
 
RR: Would it be fair to say that Multivista treats its people better than other organisation, or slightly superior, in the printing industry?
RK: I don’t think we can compare ourselves with any other organisation. One thing we are trying to do is have a personal relationship with them. My father talks to the workers on the floor every morning and that is a trait which I am trying to learn from him. The people over here have been working for 25 years and they also consider themselves very much a part of the company.
 
A lot of our team members have seen our company grow from a small letterpress to a state-of-the-art 1,25,000 sq/ft book printing plant. They were a part of this growth and contributed a major portion. Hence, they consider themselves a part of our company and work accordingly. Just like the management team where the third generation has joined the business, we have seen the same trait with our staff and workers as well, where their second and third generations have also joined us.
 
RR: Let us talk about your continuous investment in machinery. For example, the Suprasetter and the eight-colour press investment. You continue to strengthen your press floor. Tell us what else has happened in the last eight to ten months, in terms of financials. Your investments and the reasons for that?
RK: Like any other business/industry, our expansion is completely driven by market scenario/future outlook/supply-demand situation. We see a potential for growth in the school segment especially with the developing nations like Asia/Africa.
 
We are also noticing our customer’s requirements changing in terms of turnaround times, which keeps getting dwindled every year. We need to have the necessary infrastructure to meet their demands. Of course investments need to be done very carefully, as this is a capital intensive industry.
 
RR: What are the kind of numbers that you see in the book printing sector? Can you highlight two or three key trends in textbook printing?
JR: The volume of books we manufacture has increased 12-14% in the last two years. Obviously, we have added the eight-colour press keeping this in mind. We run full capacity only for eight to nine months at the school seasons, for both domestic and export requirements. But if we actually run, every printing press throughout the year then the increase will be close to 20%.
 
RR: You went in for a fairly sizeable investment with the Kolbus. Can you share the kind of learning you have had with the machine and has there been a business shift? We also see several sewing stations in your post-press line. What is the plan?
RK: Kolbus machine was mainly purchased to master the art of book finishing. We invested a lot of time and effort before going ahead with the investment. We needed to increase our through-put in binding and invested in Kolbus with a capability of producing 100,000-120,000 books in a day. We needed a dependable machine that can produce millions of books without any quality issue, with a lot of in-built features like form identification, etc.
 
As far as sewing is concerned, since we produce a lot of school books that are handled by young children, a lot of our customers insist on this process. Though this is one of the slowest processes in the entire supply chain of book production, we keep investing on this to overcome the bottleneck. Of course over the last two years, we have had various discussions with our partners and customers on PUR binding. I do see this technology make progress in India over the next 3-5 years.
 
RR: In terms of the pool of publishers, what is your numbers in A, B and C categories? In that what are the kind of categories and priorities?
RK: We never prioritise our customers. To us, we treat each customer equally and try our maximum to meet their requirements. Of course we have been working with lots of customers over a period of 6-8 in years, which has helped us to understand their requirements in terms of paper stocking/blocking production capacity/etc. We tend to grow when they grow, and our investments are always based on their requirements.
 
RR: How are you protecting your territory?
RK: I guess we are just about managing to. I mean book printing industry has become highly competitive. Earlier we used to complete with print suppliers in China/South East Asia. But over the last decade or so, a lot of Indian printers have migrated into book printing, and we are having to compete with them as well. Today, quality/price/performance is a given. No more can these factors be used as a USP.
 
We need to develop and improvise every day/month/year and offer some value additions to remain competitive. Of course expanding capacity helps. One main factor that we have managed to develop over a period of 20 years or so is a win the trust of our valued customers. I feel this is imperative, and we have managed to do that due to consistency in our performance which includes price/quality/customer service as well.
 
RR: When is the last time you heard of printing prices go up with the publishing segment?
RK: Just to carry on from the earlier answer, competition has been driving the print prices, especially in the book printing industry. It is completely market driven these days. Of course, a major driving factor is also raw material prices, which keep fluctuating. I feel over the last few years, printers through the advent of process improvement programs like Kaizan/Lean Production processes/Etc have improved their internal production efficiency, which has helped them survive the price arbitrage we are currently experiencing to some extent. It is important for printers to find new ways to remain competitive.
 
RR: You found a space in super specialisation and like that there are industrial verticals that people are entering into, the packaging is a broad category but suddenly you will find one printer who is only specific industrial application player. So why is Chennai yet to explore these specialties like out-of-home (OOH) or wide-formats?
RK: I think I might be wrong but it also has to do with next-gen coming in. If the company sees that their next-gen coming in, then there is renewed energy to succeed and thereby efforts are taken to identify the right future roadmap.
 
Secondly, if you have seen a down fall about a year or two back then the mind is not in a position to take a risk. When you diversify there’s a lot of risk involved. It is easier if you have a healthy backup. If you don’t, the lean patch, added with the burden of the new investment, can be too much of a risk.
 
JR: In Sivakasi, printing started as an allied industry to fireworks and matches. But in Chennai, I don’t see much of printers diversifying. Some of them failed because they were over-dependent on commercial printing work. The right investments also matter. In that sense, if you can buy a smaller machine for this new segment, you may perhaps not be able to compete with the established players.
 
RK: I was talking to a prominent commercial printer about four years ago. Commercially, they are used to a certain way of working. When you look at the book industry, you don’t calculate your earnings per job. After two-three years you may see the project turning profitable but they weren’t able to see through this since commercial costing is on a job-to- job basis.
 
JR: In commercial printing, you would be able to arrive at the bottom line for every job but book publishing is not the same. If you handle 250 titles, it depends on the selling price of the titles. With few titles, you make a loss but with a few others, you may do better. You have to look at the overall picture and not at one particular job.
 
RR: In terms of technology, innovation, there are few things. We will start with paper, the way in which they are sent, whether palletised form? And the paper selection, whether it is determined by Multivista or by the customer? What kind of relationship do you have and how was it?
RK: About 80% of the times, the type of paper is decided by us. In publishing, the customer requisition the stock from some paper mills, requiring certain certifications, sometimes three or four of such. If we have those from our partner mills, we would have to send samples, and printed sheets to convince them to use these stocks. Yes, we pretty much advertise the brands. If we advertise a specific brand then we make sure we have a good rapport with them and we convince the customers on the same.
 
About 20% of the customers want us to buy a certain brand of paper.
 
The other reason on why we use a particular brand is because of the pricing. Now we have streamlined with ITC. We decided to maximise two papers vendors in India, and we have found certain benefits, so we work with them to handle different ways of packaging.
 
Last year, we had certain issues in terms of quality, primarily due to weather issues. We discussed and they said, if we stack in pallets and send it, the moistures content will not enter into the paper stock. Paper reacts heavily to moisture, and the moisture would be heavy in October and rainy season. To a large extent, staging in pallets has improved the situation. Still, packaging has to be improved but it is still nowhere close to how the exporters are packing. But I am sure they will get there within a year.
 
RR: What are the market trends you see for art paper and coated paper. In terms of academic textbooks, what are the preferences that you are seeing in the market, as in the choice of paper as text pages?
RK: We are pretty much in school books. At least 75% is uncoated paper. The demand for uncoated though has increased especially in North. As we are in South, we try and go to companies in the geographical proximity. Purchasing from Pune or other Northern vendors is not viable since it takes time to deliver. I think the publisher are fine with any paper brand which the printer is comfortable, as long as it is an A-grade paper and meet their requirements.
 
RR: Your own little R& D that you have done in terms of dispatch of the books. How did you come up with the methodology?
RK: As I had mentioned earlier, certain initiatives are taken by us internally to improve our efficiency, and offer that extra value addition to our customers. While certain initiatives are jointly undertaken by us and our customers. This comes about due to frequent interactions with our customers, and understanding their business and requirements as well.
 
RR: In brief, we have not touched upon your in-house certifications. Which certifications have become mandatory now?
RK: One is ISO, which is mandatory. Now I see that lot of printers are doing it because there is lot of derived benefits from having it. We have FSC, and working on achieving more green certifications. We are an ethically compliant company through our membership with Sedex which benchmarks safety and employee standards in organisations and the audit happens every year.
 
RR: If you can just elaborate your ongoing efforts with sustainable energy especially, wind energy? What has been the drive and outlook?
RK: For the last five years, we had made conscious efforts to use a more renewable source of power to run our factory. Initially, we undertook a study to use solar power energy, as we have a huge open terrace, which could be used to implant solar cells. However, since our machines are all highly power-consuming machines (heavy load machines), technically solar cells could not be used to start our machines.
 
Two years back, we have started using wind energy to run our factory. I would now say that close to 70% of our energy source is through winds.
 
RR: So what’s next now for Multivista, say five to ten years down the line?
RK: As far as short term investment plans are concerned, we will continue to expand in the sheetfed arena, and I do see more machines coming in by April/May of 2016.
 
As far as our long term investment plans are concerned, we will look at new technology like inkjet digital. We feel it can add a lot of value to our customers, and we are quite keen to visit Drupa 2016 to see its development and evolution. Ultimately, we will look at any investments which we feel will add value to our customers, and will be mutually beneficial.
 
With inputs from Sriraam Selvam
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