"We've a tie-up with 200 schools," says Himanshu Gupta

Rahul Kumar and Supreeth Sudhakaran interview Himanshu Gupta, the third-generation advocate of change for S.Chand Group

19 Apr 2012 | By Rahul Kumar & Supreeth Sudhakaran

PrintWeek India (PWI): Being the third generation of a family business and one of the oldest publishing houses in the country, what are the various advantages and challenges you have faced?
Himanshu Gupta (HG): I feel that being the third generation of the family business, which is more than 70 years old, there is an earned goodwill of the company. We have a portfolio of over 7,000 products in last 70 years; have a very good distribution network, 27 branches and several printing facilities. Obviously, there are threats and hurdles as well in the market such as discounting, credit (that we have to give to our customers), competition and also challenges like piracy. At the same time we feel that there are several opportunities in the market, and we feel, we should be the first to grab them.

Personally, I feel, I have the responsibility to ensure that the goodwill of the company is taken to a higher zenith with time. We are also trying to take business to other sectors related to education such as digital, where there is a potential. Our aim is to impart education to our customers, and the medium should never be a constraint. We are content providers. Albeit, printing still is the biggest medium to impart education.

PWI: Can you share more about the distribution networks and channels S Chand Group operates in?
HG: We have 27 braches spread across the country, and we try to cover all the CBSE and ICSE schools, plus we cover all the prominent institutions pertaining to higher academics, management, engineering etc. Our distribution network comprises over 4,000 distributors and dealers.

PWI: Apparently, S Chand has modified and modernised itself in the last few years rapidly, and you spearheaded this fantastic job. How has the structure evolved now?
HG: S Chand Group has always been changing itself with the changing times. However, the biggest modernisation was done six years back (2006) when we decided to make the company more professional. Hence, we brought in talented human resource from the market. Today, we have CEOs, CFOs, vice presidents, and we now have a complete blend of new and old personnel, spearheading different sections. In addition, we ensured that the veteran employees undergo professional training to match up with the young workforce. Veterans play an important role as they bring in their experience, knowledge and contacts. And the industry requisites are good networks.

When it comes to the office environment, we completely changed the office structure; we have also upgraded our printing facilities with new machines and ancillary equipment. The management structure has also undergone a transit. We are trying to provide better facilities and work culture and at the same time ensure that the attrition rate is kept under control.

While I have been spearheading these changes, I still say that its teamwork that deliver results and I am just a team member. I am a believer that success stories are made when a team works towards it. Everyone contributes; only the magnitude one puts in varies. The market is dynamic and revamping the organisation to infuse a positive energy is important, it gives an edge to the organisation.

PWI: And does an MBA from S P Jain College help in this?
HG: Quite frankly, I couldn’t complete it due to some personal commitments. However, it was really a learning experience; I was there for around 8 months.
PWI: When you were at Publicon 2011 conference organised by FICCI, you and your panel of experts opined that copyrights has always been a backburner-issue in India. Can you elaborate on it?
Gupta: In India, copyrights have always been an issue with the publishers and we all have tried various means to fight it out. Unfortunately, the legal procedures in the state are tad slow that it takes a lifetime to fight any battle. S.Chand Group therefore has set up an anti-piracy cell which has around four members, including a lawyer. If we come across a complaint of piracy, the anti-piracy cell members along with the help of local police and our local branch, raid those places. We have done big raids in Tamil Nadu, Bihar, Uttar Pradesh, Maharashtra etc., and we have found that a large number of books were being pirated. On an average we do around 2-3 raids a month. Recently, during a raid in Bihar, we found around 5000 S.Chand Group books of around 20-30 lakh Rupees being pirated and sold.
Also, we urge our authors not to copy content from anywhere, and rather write in your own language. Nevertheless, if we find that the content has been copied from another source, we immediately expunge the content from the next edition of the book and also warn the author that his authorship might be cancelled if the same is repeated.
PWI: Copyrights is an issue that most of the publishers are aware of, but reprographic rights is hardly even discussed. How has it affected your business?
Gupta: It doesn’t affect us much since we are text book publishers. These are educational and curriculum-based books according to the syllabus set by the government. Reprography adversely affects those who are into specialist books and fiction books business.
PWI: Does S.Chand Group plans to get into publishing books for State Boards?
Gupta: Our sales people are already meeting the state board executives. We are eyeing the state boards from K-8 standards as we feel the syllabus coincides with those of CBSE. Today, schools which are affiliated with State Boards feel that the quality of education imparted through their institutions should be at par with the CBSE level. Therefore, they prefer to use books of national level authors and publishers. According to our research there are over 55000 English-medium state board affiliated schools in India, and they have a huge potential. We have not even covered 10% of this market. In next four years, we plant to tap this market.
PWI: So are you interested in the vernacular books market?
Gupta: We don’t want to cater to the vernacular books market. We would stick to the English educational content market. Therefore, we are planning to create a new series of books, which would be priced appropriately so that section of students are empowered and given access to quality education.
Vernacular books segment is a different market altogether that has been provided with subsidies by the state government. We cannot compete with them at the price front, since they are either subsidised or almost free. Moreover, there large number of vernacular languages and scripts, producing books for each language is a tough task.
PWI: How big is the educational book market in India?
Gupta: The total education market in India today is around 7000-crore. Of this, the CBSE and ICSE school market would be around 4000-crore; excluding the government supported publishing market.
PWI: Currently, you have two production units. Are there plans to set up more?
Gupta: We produce almost 12 million books every year and this quantity is increasing by 15% every year in terms of production.  We have a unit in Ramnagar and one in Rudrapur, which is in a tax-free zone. We are planning to put up a new unit in southern India as we want to target the printing process regionally.  So in next three years we plan to set up our printing units in Chennai, Kolkata and Maharashtra. This is a move to cut down on the freight and logistic charges. This will also help us manage the production and supply better as we don’t have any more capacity in our existing plants. The southern unit will cater to the whole of southern region. Southern India contributes around 30% to our market share and therefore it is empirical to have a printing setup for our 7-8 southern market. The paper will also be procured from the southern region; we are already procuring paper from Tamil Nadu Papers.
PWI: What would be pressroom setup for this new plant?
Gupta: We plan to install two sheet-fed and one web press. Most probably the sheet-feds would be from KBA, and the web presses would either be from TPH or we might also import Goss or Komori 4Hi press; this is still not decided yet. 
PWI: We heard that you were planning for a digital unit, what happened to that?
Gupta: The Ramnagar plant is a sheet-fed unit while Rudrapur is mainly offset. We were planning to set up a digital unit as well but for now it has been put in a freezer.
PWI: Do you plan to set up exclusive printing units for exports?
Gupta: We don’t want to get into commercial printing by setting up exclusive units for exports. That doesn’t interest us. We utilise our printing units only for our books.
PWI: Books in India are the cheapest in the world. Your comments.
Gupta: Books are the cheapest in the world. We produce a book at $2 while the same would normally be priced at $20 if they were produced in UK or US. However, even at the low prices at which the books are available in India, several students are not able to afford them. The model works here only because of the volumes.
This has its sets of pros and cons; at least we have the right volumes. If the books would be priced high, the publisher would surely mint more money. In the interest of the masses it is important to control the prices of books. This doesn’t affect the quality of content, but may be the packaging of it. For instance, a publisher might not be able to produce hardcover or hardbound books or he might use a lesser quality of paper etc. In India we have an advantage that the labour for reproduction of books is cheaper compared to European countries.
In India, people have a feeling that if a book is better packaged, it can be priced higher. Quite contrastingly, in European countries it is the content that sets the price of the book. People here prefer to spend on junk food than cultivate their reading habits. The psyche needs to change, and we believe it will.
PWI: Do you think there is a slight favouritism attached to international writers in Indian education book industry?
Gupta: In English language, some schools still feel that the book should be written by an English author. But that is not necessarily mean the books would be good. What is more important is the content. It is important that the writer understands and explains the concept in such a way that children in India easily understand. Several of the publishers ensure that their international titles when brought to India are co-authored by eminent Indian authors.
PWI: How big is the book export market in India?
Gupta: Export market in India for publishing is growing but still small. Nevertheless, the commercial printing is gaining traction. Developed countries don’t prefer to buy books published here; however, African and UAE countries are our markets. India is a tough market to enter currently if you are a publisher. Making a guestimate the Indian book export and commercial printing export market should be around is Rs1000 crore. Our export to total production ratio is around 5%.
We have a separate exports division that looks after the SAARC, Middle East, Africa, UAE markets. We are trying to cater to the African book market.
PWI: How important are book fairs for you? Do you think the Indian book fairs serve the purpose?
Gupta: We attend almost all international and domestic book fairs. The role of book fairs is important but the participation of publishers and people is taking a nose dive internally. There, people find online market much more convenient to procure books. In India, book fairs are mainly for sales. Internally the concept of book fairs was pillared on exchanging rights, meeting clients etc. The convention centres need to have better infrastructure to bring in people and give them convenient space for reading.
PWI: Tell us about various M&E S.Chand Group has entered into in recent past.
Gupta: We have launched a new brand of products under the name Blackie and Sons. This is a UK company that we acquired sometime back and now we are using them to produce new line of dictionaries and English language books.
Last year, we acquired a company called BPI in which we have a majority stake. They have rights for major characters from Warner Bros, Cartoon Network etc. The joint venture with Houghton Mifflin Harcourt was done three years back as wanted to enter the digital market. We wanted to bring international content to the Indian education market. WE have tied up around 200 schools and we are adding two schools every day to the portfolio. The company is called S.Chand Group Harcourt and the product is called Destination Success. We understand Educomp is far ahead because it launched long before we entered the market. But we believe that our content quality and service will help us catch up fast. We have a separate office with over 200 employees.
PWI: Do you feel that the e-book generation would ever flood the Indian market?
Gupta:  e books will take time to kick off in India as books are priced very cheap. Educational book segment has no threat from e-books as for students it is mandatory to buy those books. At the same time, the leisure reading market will undergo a change with different devices.
PWI: It seems the government feels otherwise, as it has been promoting the Indian tablet Aakash for schools and educational institutions.
Gupta: It is still too early to suggest how successful project Aakash would be. We feel that we need not feel threatened by the tablet and e book evolution. Nevertheless, we are content providers, so if tomorrow, the form of books change, we are up for that as well.
PWI: What is the current structure of machines in your units across India?
Gupta: Seven KBA press - 5 four colour, two four colour, one dominant four colour with perfection, one Heidelberg single colour along with bindery equipment, machines from Muller Martini, three Welbound machines of six-clamps, four three-knife trimmers from Perfecta. We have also converted our trimmer to auto-trimmers with auto loader and unloader, pile turner. We have procured a Wohlenberg with a speed of 5000 per hour, 24 gathering station, 12 clamp station, three knife trimmer and stacker, all inline. In prepress, we have outsourced the work to a vender who utilises, Highwaters CTCP and conventional systems. Rudrapur is a ten year tax free zone so we set a plant there. We have two two-colour TPH Orient web presses there. We are adding one four-colour machine every year. We are also utilising several other printing contractors for their services. Currently we convert around 9000 tonnes of paper every year.
PWI: Padamshree in 1969, knowledge Pillar of India Honour Award, Dadabhai Naoroji Millenium Award, Book Sellers Best Publishers and Federation of Indian Publishers Award; what’s next?
Gupta: I am really honoured for all these awards. The latest in the list of achievements is that FPBI recently honoured me as the best youngest publisher.