Pankaj Bhardwaj: The perfect kind of label

PrintWeek India (PWI): There are signs of cooling in the label market in Europe. Ominous signs for India?
Pankaj Bhardwaj (PB): If you see, there is a strong correlation between the fundamental economic growth of the consumer products goods and how the pressure sensitive label industry moves. In mature markets, where the penetration of pressure sensitive labels is high, this relationship is even stronger.

In India, first of all, economic growth is reasonably good. We are talking about approximately 6% to 7% of GDP growth, which would enable similar organic growth for the label industry. We are cruising towards the double-digit mark owing to the fact that the penetration is low and we are yet to see the conversion of other technologies to self-adhesive.

PWI: Some time ago, we heard of the magical one-billion square meters (sqm) consumption in India. That is likely to go up then?
PB: See, we have been maintaining that the per capita consumption has moved from what used to be 0.30 to 3.35 sqm a few years back to something like 0.60 sqm now. And that's where I think our head is placed.

PWI: What according to you are the underlying factors that will enable the label industry to maintain healthy growth in India?
PB: I think there are two reasons.

First, the fundamental organic growth is good. We are sitting on the demographic dividend, which is due to the young population with the median age of 29, a bridging urban-rural divide, and a connected and aspiring middle class. This is a perfect and fertile ground for the consumer products to grow in the country and hence the pressure sensitive market is expected to grow as well.

Second, we still are seeing a significant conversion from other technologies to pressure sensitive labels with efforts of multiple organisations including Avery Dennison and hence I do see that label industry growth would be in a multiplication factor of 1.3 to 1.4 of GDP in the coming future

PWI: More label companies are buying wider presses, and indicate that they are looking beyond self-adhesive towards flexible packaging, shrink sleeves, wraparounds and other wider applications. What’s your take?
PB: Again, it’s attributable to two broad reasons.

For obvious reasons, everybody is looking for better efficiency and productivity, and witnessing evolution of print jobs available in the market, press configurations are changing to optimise the cost. Secondly, most business owners feel the need for diversification of their portfolio and increase their service offering.

We are at the early stages of market evolution (at least for flexo) and converters are in the process of better defining their space. There are converters who want to diversify their portfolio and at the same time, there are converters, who are looking at leveraging their strength and hence sticking to the core. This is no different to the development happening in adjacent spaces. Companies that are in offset printing or say in screen printing are coming into flexo and becoming a part of the pressure sensitive label industry. So I think that all these print mediums shall co-exist at any given point of time. I do not see that there is just a unidirectional change of only label printers looking to diversify. I think there are companies in the print setup who are looking to diversify.

PWI: Good news for Avery Dennison?
PB: Well, we are very bullish about Indian prospects, either case.

There’s a buzz about RFID and smart labels, which really will help brand owners, both commercially as well as reaching genuine products to the consumers.

PWI: How prepared are the brands and labellers? What are you hearing?
PB: It is an extremely exciting area for us at this moment, as you know that we inaugurated Asia's first intelligent Lab in Pune.

We are improving our connect with the brand owners and we are getting a very positive response from the brand owners on the subject. Since we started our efforts in India, we have already done multiple POCs (Proof of Concept) and tasted initial commercial successes. Project commercialisation pipeline looks very promising.

From the brand owner’s point of view, there is a lot of energy to see that they are able to take advantage of these new-age technologies.

The ecosystem is still developing and I think it is going to take some time before the ecosystem is fully matured. But the progress that we are making in this direction is very promising.

PWI: Avery Dennison is upping its ante in India?
PB: Absolutely. As I said, we are very bullish. We are expanding in terms of our footprint, with Kolkata getting added this year. We are investing in innovations, investing in building capability with a new topcoat line being operational, multiple sheeters and slitters also getting commissioned. We are embracing technology and we are focusing on improving the customer experience by the use of technology in the country. We are committed and very optimistic for the India market.

PWI: You spoke about the CSR activity of Avery Dennison, no one really knew much about? What you did in Kochi after last year’s disastrous floods, was commendable. What is the thought process behind your CSR activity?
PB: Thank you for the feedback. First of all, I'm overwhelmed by the feedback that we received after we talked about it. Avery Dennison in India has been involved in CSR activities for very long, roughly 10 years now. And of course, we augmented our interventions in the last few years.

Under our corporate social responsibility umbrella, we have a group of volunteers for helping us with SEWA (to serve environment and welfare activities). There are 35 volunteers working on different projects to see that we are able to make a difference and give back to communities. One such project that we undertook was to rebuild Kerala. We helped build nine houses for the people whose houses were deluged in the floods.

PWI: And finally, while discussing the challenges with label printers, one that stood out was lack of skill or skilled manpower. Avery Dennison has been doing its bit, but that clearly is not enough?
PB: If there is one area where I am disappointed with all the stakeholders, including us, it's about training more and more professionals and helping the industry bridge the gap of trained professionals.

We started a program with LMAI and have done a couple of batches under that program but I believe there is more that can be done. And it can only be done with the help of our trade associations like LMAI or others.

So, I offer my complete support from the point of view of lending the conceptual support as well as lending the resources for doing so. I look forward to ideas and collaboration of likeminded people to come together and help us here.

PWI: Thank you, Pankaj.
PB: Thank you, too.