Mudrika Labels: Route to Success – The Noel D’Cunha Sunday Column

By 26 May 2019

Mudrika Labels is a story which should inspire label entrepreneurs. The three Desai brothers, Manish, Sandip and Vipul, have always kept an eye on the market, and have created labels which are special.

In this Sunday Column, Manish Desai shares how the three brothers run their business and the definition of success

In the Pic: (r-l) The Desai Brothers: Manish, Sandip and Vipul

Mudrika Labels’ story reinforces the theory that from small beginnings big things can really develop. Manish Desai with brothers Sandip and Vipul, began their labels business way back in 1976 with a screen printing facility. Today, Mudrika owns and operates an offset-based corrugation unit in Daman and Bhillad;  a packaging plant in Vasai; a label-stock material plant; and a joint venture with a South Korean partner for manufacturing heat transfer films, decals and in-mould labels.

Mudrika’s growth meant it had to move from Mumbai to Vasai in 2006, but operated from two different units – one for flexo and the other for gravure. In search of new label business, the Desai brothers joined hands with a South Korean partner in 2010 and started the manufacture of heat transfer films, decals and in-mould labels.

“In 2015, we started the process of consolidating our scattered units of narrow-web and gravure printing under one roof. With the newly inaugurated plant it has brought all the label businesses under one roof,” says Desai.

Mudrika today has an installed capacity of 70,000 sq/metres per day, a combined space of over 1-lakh sq/ft and employee strength of 550+ at the three plants, and a Group turnover of Rs 160-crore.

Focus on positives

The troubles with the policies and its implementation, should not interfere with the label industry’s growth outlook, as such, says Desai. “The Indian market as well as some countries, which offer export opportunities contain enough potential and labellers should focus on the positives.

Desai looks inward to present an example. “The last 12 months have been good. Nothing to complain about,” he says, adding, “We have grown by 20%. We have had a good customer base, but interestingly, we have been able to add more customers.”

This positivity reflects in the investments Desai has recently made.

Mudrika Group of Companies operates four companies –  Mudrika Labels and Multivision Packaging, which is based out of Vasai; Interpack Industries in Daman;

and Mudrika Sand Bong Foils(MSD) in Bhillad.

For labels manufacturing, the company has a battery of flexo presses –  seven of which are from Gallus – five EM 280, one ECS 340, and latest Labelmaster Plus, which was the first in West India. About a month ago, Mudrika invested in a Lombardi Synchroline flexo press.

In Bhillad, the company has recently invested in a 11-colour brand new gravure press, a metallisation machine from General Metalliser. “One of the important features of the machine is that you can do part metallisation, that means, you print on the substrate, leaving the portion you want to metallise unprinted, and the machine will metallise only the portion that is left unprinted. The machine delivers a perfectly registered metallised labels,” said Desai.

Mudrika uses the gravure press for producing heat transfer label, which is a segment connected to labels. “It’s a customised machine with a drying system. We can produce shrink sleeve labels too.”

Business depends on good people

Desai believes that success is not always connected to management. It mostly depends on good people. If management loses the sight of what is important, a business can fail.

Mudrika currently has 20% of its sales as export, and the rest domestic. Desai says, “We added manpower to our sales force and I would credit the increase in our customer base to our sales team.” He understands the challenges inherent in selling and says, the difference between success and failure in clinching the order depends on how you handle the enquiries you get. “Our sales team is more professional, making use of technology when interacting with the customers, most of it based around the internet.”

A lot of production processes is linked to IT, unlike say five or six years ago – right from booking of order, pre-press, press and finishing to delivery. “It’s important that once a customer places an order, there should not be a need for the customer to follow-up on the delivery etc. We are working on the process where once the customer has ordered its job, it will be delivered within the committed time and quality assured. That will be our USP,” explains Desai.

The other people in Mudrika are on the shopfloor, and Desai is extremely happy with the way the operators handle the 12 machines. “They derive the best out of the machine. All our operators understand at what speed a particular job has to run to produce good quality labels, which can be acceptable with the customers.”

The Desai brothers do not have any sons in the family. The daughters, Desai says, are not interested in the business, and are pursuing other interests. “That’s the case as of now. I do not know of the future,” he says.

But, Mudrika has key supporters, who have been serving the company for a long time. “I call them supporters, and not employees, because they have been and are, the pillars of Mudrika. If not our daughters, someday we hope to transfer the management of the business into their hands, though the family will remain in control,” says Desai.

Old tenets are still relevant

Mudrika has been in the label business for the last 25 years, and has believed that to beat the competition, create a niche. Don’t follow your competitors, but stay ahead of them. Create new products, rather than producing the same things your competition is producing and enter the price war. Desai agrees. “This is one of the tenets we follow, our team follows. 75-80% of our business is based on producing new products for the market.”

The other tenet is the supply of equipment and input material. As far as possible, Mudrika tries to customise the machines to its requirements. “But I must say, that we have been lucky to deal with manufacturers who have been kind meet our requirements.”

In the printing industry, making labels in itself is a secret. Today, we perhaps have about 400-450 label printers in India. What is it that the top five are doing to become successful? It can’t be price alone. The production capabilities are different, the way they produce labels is different, and the whole thinking is different.

Desai says, Mudrika’s one secret is: we learn from our customers. “I would be lying if I say, we don’t indulge in price negotiation, but that’s about 15-20% of our business, but only with our loyal customers, with whom we negotiate the price. There’s no way a company can grow by lower prices. You have to create something new in your industry to attract the customer to come to you.”

Marching on

Labels manufacturing is an industry where replacement investment is necessary. “By replacement, I mean you have to keep upgrading your machines. I can’t pinpoint on what would be our greatest investment, but both the plants have been key investments for us,” says Desai.

It is one thing to expand and another to make a success of it in the face of rising competition. The route that Mudrika has taken is honing its services through differentiation, which has put the company in a position of gaining compelling yield.

Two years ago, Mudrika produced an innovation for Colgate. With the innovation, it perhaps becomes only the second label printer in the world to achieve the Fresnel lens effect by printing on a pre-registered holographic film on a flexo press. “The client was procuring the lens labels from China and wanted us to develop such labels locally. The technology was not readily available with us,” says Desai.

The company experimented on producing the lens using the Gallus ECS 340, which was a new investment in 2015. The task was to print on top of the holographic lens substrate in a tight register to achieve a life-like perspective that produces the impression of depth and provides the label with a tactile quality.


(r) Manish and Vipul with the Gallus Labelmaster Plus

The company used its own pre-press expertise and a printing kit, details of which Desai did not divulge, to create the pre-printed lens label, after which it was printed on the ECS 340.

“That innovation won us many awards including the PrintWeek India Label Printer of the Year Award in 2017,” says Desai, adding that Mudrika is now working on a new, special label.

Why, we ask. “When you produce something new for the market, you are not competing with anybody. You are one step ahead of the competition. Hence, we continuously work on specialised kinds of labels. The one that we are working on, will match the success of our Colgate job,” Desai emphasises.

Desai has been an active member of the Label Manufacturers Association of India (LMAI) and has been appointed as the LMAI conference committee chairman. He will be heading the committee for the LMAI conference which will be hosted in Kochi, Kerala. “The theme of the conference in Kochi is – Future Next. The label printing business has become static. The theme and presentations will evoke the printers to think on how they can take their company to the next level,” he says.

Desai has become a keen advocate for doing new things, and his new business vertical is a testament to attempting to take a new route in difficult times. It’s turnkey projects – where Mudrika will supply labels, and not just labels, it will also supply the applicator machines, at cost.

Mudrika has completed three projects for big companies, in India and overseas. There are three ongoing projects which are expected to be completed by July. The project cost is in the range of around Rs 20-30-crores. “We take responsibility until the project is complete. There is no profit in setting up the project, but our intention is to put our labels on those machines and at the brands.”

Desai’s advice to other label firms is, explore the label market, and it does not have to be a one-size-fits-all solution. “Take advice from the fellow label printers, association, allied industries, but ultimately make your own judgement. And it’s important that you do your own research too.”

One technology which is underestimated by all label printers but has a great future?
Digital. I think Mudrika is guilty of it too. The reason perhaps is that there’s a big market for labels in India, which is long runs, unlike in Europe, where the label market is even bigger, but the SKUs are shrinking. This is the reason digital has gained a foothold there.

In Europe, there’s a demand for smaller SKUs, which keep changing frequently. That trend is yet to come to India.

Which brand according to you uses packaging and labels the best?
ITC’s labels are different. I don’t work for them, but I have seen that one of their beauty products has Braille. Their labels are also not mundane, they are unique.

After two tough years due to demonetisation and GST, Mudrika continues its march. What is the update?
We were not into cash business then, not now. Hence when demonetisation was announced we were not affected. Likewise, when GST was implemented we were already excise compliant. Hence, we were on track even for GST.

Yes, from the customers’ point of view, there were a few hiccups for a quarter or so. So, we had expected this to happen, hence we focussed more on exports. We believe that the requirements of the label is big. The brands cannot reduce the demand, at the most they can postpone it.

Next 12 months for Mudrika?
We are expecting the same 20% growth.

Is your growth in sync with the label industry growth?
The label industry growth may be slightly less.

If you were to start again, one thing you would do differently at Mudrika?
The size of label plants in India is quite smaller when compared with the label printing plants in say Europe or US. So, if I were to start again, I would start with a bigger space, not multiple floors, but a single ground level systematic plant.

One label job which was a feather in your cap? Why?
It has to be the Colgate job. It was about producing lens label, something no one had tried before on a flexo press. We had to use our expertise in pre-press, invest in a printing kit which could print the pre-printed lens label, after which it was printed on the Gallus ECS 340 flexo press.

The government is vigilant about green and waste management. How have you responded, the label association and the label industry responded?
On our part, Mudrika is working on a recycling project of labels and silicon with adhesive. We hope that the results will be out in the next six months. As I said I am hopeful, not 100% sure that it will be done in the next six months, but we are definitely working on a solution that will be helpful for the industry and Mudrika.

I know sustainability as of now is not a priority for the label printers, and the industry as a whole, but there are indications that in the next two years, label printers will have to include sustainability in their scheme of things.

There’s a committee on sustainability within the LMAI, but it’s not as active as it should be. That said, I will urge the new president of LMAI to push the sustainability agenda. LMAI’s task is cut out, first is education and then work on measures.

What’s the one waste process you are keen to know more about?
European machinery – Lundberg and Matto, are the best systems for stripping label waste, which can be re-used as filler for packaging purposes. We are keen on implementing one of the two systems.

 

As chairman of LMAI Conference 2019 in Kochi

LMAI – your role? What do you consider the most important virtues of LMAI?
There is a board of directors of LMAI, and I am one of the founding directors. I am also one of the past presidents of LMAI.

This year I have been appointed as the conference committee chairman, so I am heading committee for the conference which will be hosted in Kochi, Kerala.

We have so far got a good response from the label printers as well as the sponsors.

This time we are focussing on ensuring that more label printer members participate.

How will the LMAI conference in Kochi look like?
We have received great feedback from our previous conferences and have decided to take four steps.

First, the presenters will share two topics, one of which will be chosen. Second, for the time, we are introducing a panel discussion session on each of the two days, where we expect the participants to derive more knowledge and also indulge in question and answer sessions. The panel discussion will be slotted soon after lunch, a time when the interest level dims. We expect the panel discussion will liven up the proceedings after lunch.

Third, the exhibitor stands will remain closed when the presentations are being made. The exhibitors stand will function before the presentations for the day begin, during lunch, breaks and after the presentations for the day are done And lastly, the sponsors who will be making the presentation will submit their presentation in advance. They will not be allowed to make changes, without the knowledge of the presentation scrutinising member.

Fourth, the topics of the presentation will match the requirements of the audience.


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