An insight into a Rs 200-cr print company: Insight Print Communications

Ajay Aggarwal received his BE degree in computer science in 1991 and was recruited as a support engineer by Wipro straight from the campus. He quickly moved into sales as that was his core strength. The turning point came when Wipro tied up with Apple and Aggarwal’s boss told him to handle the sales of Apple Macs, which required technical and solution selling approach. Most importantly, it was Aggarwal’s introduction to the print industry. In a freewheeling chat with Sriram Se

16 May 2014 | By Ramu Ramanathan & Sriraam Selvam

Ajay Aggarwal says, “Wipro is a very good institute to learn and in a short span of five years, it gave me a strong foundation”. In 1996, he quit Wipro and joined Insight Print Communications, which was founded by R S Dugal. When Aggarwal joined the organisation as a partner in 1996, it was a Rs two-crore company based out of Mumbai. Today the Insight group’s turnover is Rs 200-cr and it is focused on a gamut of print-related solutions and spread across the country as well as abroad.
Scitex and Komori: early days
In 1997, Insight got the opportunity to sell Scitex imagesetters and high-end scanners across the country (earlier it was only western India). Aggarwal says, “That was one of our first success stories. By 1999 it was a market leader. We turned the Scitex brand around by providing strong service and bringing back the smiles among existing users. That’s how the good word spread.”
Later on, Insight worked with Scitex Vision in the wide format terrain. Again, the story was repeated. Aggarwal reminisces, “We started at number four position, behind Vutek, Mutoh and Nur. From there, we moved Scitex Vision to the first position. It was 2004–05. That was the time when Airtel and Vodafone changed their logos (and branding) and Insight was able to add a lot of value.” 
Those were heady days. Within a year (2006), Insight got an opportunity to work with Komori. Aggarwal says, “Sangam Khanna was associated with Komori for many years and he was a good friend. When this opportunity came along, we teamed up and Sangam became part of the Insight group.“
Insight installed its first Komori press in 2007. At that time, they were dealers in north India. Print Tools had the responsibility for south India. It was only in 2013 that Insight was given “the all India responsibility”. The reason, according to Aggarwal, is, “In north India, the sales were very good for Komori but in south India, Komori was struggling.”
Aggarwal attributes this to service and positive attitude. He says, “The support was pretty weak in south India but very strong in north India.” This he ascribes to Insight’s credo of being a highly support-oriented organisation. Aggarwal explains, “Anything we do has to have a lot of support and infrastructure behind it. Service makes a difference. And then the positive attitude, which helped us to sell even when the Yen was at Rs 70. That is how we got the complete Indian territory.
Today, the Insight group has three companies. These are: Mediawide, Reality and Insight. R S Dugal oversees Mediawide, which is into web2print solutions for large brands and focuses on overseas customers. Reality, which is based in Pune, is into pre-media services and has touched upon 10,000 books till date. The firm adds value which includes cover design and illustrations and converts them into ebooks. Angelo Fernandes handles this operation. The Komori operations is headed by Sangam Khanna. 
Only recently, Insight added a division that sells CI-Flexo presses from Soma. This is handled by Bhupender Srivastava. George Mathew, Ashish Save, N S Ahluwalia and Nitin Palekar constitute the rest of Insight board and handle south India, west India, future businesses and finance operations respectively. 
RR: What’s the reason for your success? When we met at your stall at Printexpo, you stated you are very bullish.
AA: First, we have this philosophy which we call the harvest season and the sowing season. Since we are into capital-intensive machine sales, we have a long sales cycle. So whenever the chips are down, we encourage our teams to start sowing, build relations, meet customers, and educate them. We are not pushing them for numbers. We don’t measure quarter-to-quarter growth. Instead we go with the cycle. If the cycle is not so positive, numbers won’t come.
RR: What do you do, then?
AA: Instead of wasting time on looking at numbers, we look at processes. Has our team met the clients? Have we done the right things? Once the time comes to encash, it is automatic.
RR: Has this been your way of working all along?
AA: Personally I am a contrarian. When the markets are at the peak, I start to get conservative and when the markets or the economy is at the bottom I start to get active. And so, while rest of the crowd will be going with the flow, I try to do the opposite. That is my way of doing things. 
RR: And so does this explain why you are bullish, while the industry has been slow?
AA: I believe that India is at the cusp of its biggest and largest growth phase. Currently the Sensex is at 22,000. I see the Sensex at 40,000 in the next 7–10 years. The signs indicate that a stable government will come at the Centre and that should be the catalyst. This is based on my studies. I did my post-graduation from ICFAI in financial analysis and I love to study charts. I am looking at the Rupee strengthening in the next few years and Indians picking up a lot of assets, like the Tatas and Mittals. Overall... I see a golden period for India. 
RR: In terms of global perspective, at Insight you are dealing with two mindsets. One is your dealings with Kodak, HP, Xerox, which is American. Likewise you are dealing with the Japanese, like Komori. Have you done a SWOT analysis about business in the US or Japan?
AA: The US has seen a continued uptrend since the 1932 Depression. So the bosses in US, they are driven by numbers quarter-on-quarter, whether it is HP or Kodak or Xerox, or any other US-centric organisation. They want to see growth every quarter. When you look at Japan, it peaked in 1989 and since then it has been 25 years that they are in recession. They are therefore more grounded. The current generation of managers in Japan has adapted themselves to working in a recessionary environment.
That is one major thought difference. Since US-centric companies have seen continuous uptrend, they are more debt oriented,  are good in marketing, and they believe in scale… all that kind of stuff. On the other hand, the Japanese would be more conservative; they wouldn’t want to have much debt. They are weak in marketing and so they would focus on making their products world class. 
The Americans are more aggressive and more ruthless at times, while the Orientals will be more humane, more relationship oriented. They wouldn’t want to disrupt something which is not working right away. They will want to give it a chance, They will give it a lot of thought before making changes. While, if in one quarter the performance is weak with the US-centric companies, suddenly in the second quarter they start to think about making changes, hire and fire… That is a cultural difference. 
RR: Is this wrong?
AA: Nothing is wrong. The US has seen non-stop growth since 1987 and so they are used to that. They have not seen a recession like the Japanese, Yes, there were slight blips in 2000 and 2007 but the current generation of managers are tuned to think only in terms of growth as they have seen only that environment. 
RR: What about patents and engineering skills?
AA: In terms of patents, the US is the master. In engineering skills, the Germans and the Japanese are on par. 
RR: Describe your first impression of the Komori team.
AA: The thing that impressed me the very first time we walked into the Komori plant, was the Indian flag. Suddenly that made a lot of difference. It is as simple as that. The way, the mindfulness, the respect, the care for “an Indian”…
RR: How did you strategise with Komori?
AA: When we first started selling Komori in India, the brand image of Komori was weak and was placed at number five. And so, the big printers who were in the buying cycle for a brand new press would not give us much attention. We focused on printers who bought pre-owned presses – so in a way we created our own space. We had to show real value to customers to move them up from buying pre-owned to new; convince them about the ROI of the new press versus secondhand.
Then there was a need to arrange for finances and make it comfortable. We used the deferred LC scheme, which worked till the crash in 2008. We created ways and means so that customers were able to buy a new press. This meant, our competition was not with any other manufacturer but with an entrepreneur who had money to buy a secondhand press.
RR: Meaning, your outlook is different. 
AA: Yes, even today, we are not looking at how many presses our competitors sold and what is our market share. For us, every secondhand machine of a decent value that came into the market is an order lost. So suddenly we are not losing 1–2 orders, we are losing 10. This keeps us on our toes, and makes us run. The thing is, there are too many order losses around us. I strongly feel that a brand new press is much cheaper in the long run as compared to a 20-year-old press. 
RR: How so?
AA: Let me give you a simple math. Lets say, you buy a 15-year-old press for half the price. Now it has a life of five years, and you buy a new press at double the price but with a life of 20 years. This means, you are already paying much more. The other thing is, a secondhand press is going to do two jobs in an hour, while a brand new Komori press can do 7–8 jobs per hour. Similarly, if the old will produce 50,000 sheets per shift, a brand new Komori will produce 100,000 sheets.
RR: So you are arguing that a printer is paying much more in terms of per yearly cost ...
AA: Yes. A printer ends up paying much more for an old press that has fewer years of life left and is giving much lesser efficiency. Plus with all the power costs going up and paper cost going up, the cost incurred on an old press is higher when compared to a new press. Point is, it doesn’t make sense to buy a secondhand press. That’s what we have made our customers understand. That’s what has given us rewards.  
RR: Tell me how did Komori in India build the value chain through the Spica?
AA: The Spica series was the perfect cost-effective press that allowed us to compete with the pre-owned presses. Then, gradually there was work in progress, which went up the value chain; Komori’s and Insight’s reputation and brand image became strong. Printers started to feel competitive pressure from those who had installed new presses. The success stories started to make the rounds and the good word spread. Then there was the Lithrone series which enabled Indian printers to opt for five-colours with all sorts of loaded options. 
RR: How was this done? Was it part of a strategy or did the technology evolve? Or was this due to the inherent weaknesses of some of the other players who were obviously struggling in the market?
AA: Honestly, no strategy. We found a sweet spot with the Spicas. Then the Spicas were replaced with the double diameter Enthrone presses. Just to clarify, the Enthrone and the Lithrone are essentially the same boxes. From the feeder to the print units, the press is similar, only the delivery is different. With the Enthrone, we got the same Lithrone series press at a good price. So we were able to put it into the market. In 2013–14 we have installed more than 15 Enthrones.
Now we have another sweet spot with the LA437 – the 25 inch x 37 inch Komori press. It is making a difference all over the world – and in China. And finally, and most importantly, is the HUV technology from Komori. 
RR: Hence the focus on HUV?
AA: Yes, this year itself, we have more than 10 UV/HUV presses or UV/HUV ready presses that we have sold. So that helped and then HUV helped. HUV is a revolutionary technology. I believe, without being sales oriented, the classical UV will die. In my view, HUV will pick up.
RR: The reason is?
AA: The reason is simple: HUV consumes one-fourth the power of classical UV. It does not emit into the ozone. It does not require too many air-conditioners as the press does not heat up so much. It does not require exhaust. HUV press is much more efficient and runs at the same speed as a conventional oil-based ink press, while the net on pallet of a UV press is much lesser. Of course, every new technology has its gestation period. But let the other players join in and then it will happen very quickly. It is like GST, till the time BJP doesn’t come into power they don’t want to introduce GST. So, today the competitors may talk negative about HUV. But later they will say that’s the right way; and already they have started to talk about LUV.
RR: How do you compare the LED-UV and HUV?
AA: LED-UV and HUV are similar technologies. LED-UV works very nicely in a web kind of a situation. In sheetfed there is a slight problem. What happens is LED-UV lamp needs to be very close to the media to dry. Therefore the distance between the lamp and the cylinder needs to be very narrow; so in the sheetfed and specifically when you are doing thick boards and plastics, at the edge it hits the LED lamp. Therefore this technology didn’t work smoothly. But there is progress; LED-UV is already becoming common in wide format presses. HUV/LED is also the technology that is being used in digital B2 size press and the web press that Komori is bringing out with Konica Minolta/Landa. 
RR: And always one of things that we tend to forget is what happened with the Komori 38 heatset press. Why does that story get lost?
AA: In India we sold nine brand new Komori heatset web presses. Plus there were others who have brought in a Komori pre-owned press. Komori is a dominant player in the heatset market. All these machines came before 2007. After that, two things happened. One, there was sluggishness in the economy. Two, the magazine industry went through a lean patch, and so anybody who wanted to invest in a heatset for magazines or books was apprehensive in investing in a brand new one. I think it will revive once the economy picks up. 
RR: Most of the Haymarket titles are printed on a Komori heatset press at Kala Jyothi. 
AA: Kala Jyothi in Kondapur has a Komori System 38 press, and it is a beautiful press. I love the heatset presses from Komori. And to be honest, I love all the Komori presses. They are very strong in terms of engineering, print quality and most importantly in the cost of ownership. A good product combined with good service, proper training, honest approach, and our passion, makes all the difference. 
RR: Coming to Kodak. It has been a longest relationship…
AA: In 1995, we signed up with Scitex as a dealer for western India. Since then it has come a long way, it is a two-decade relationship. Scitex  became Creo-Scitex and then Creo and finally it was bought over by Kodak. Our HP relationship is also through the original Scitex as they bought over the Scitex vision.
RR: Obviously Kodak is a proud organisation. Your view on the ups and downs?
AA: I strongly believe when Creo was bought over by Kodak it was the best thing that happened to us. This was because we realised long ago that only those CTP manufacturers would survive which had a consumable business. As far as I am concerned, Kodak, Fuji and Agfa are the only three. Everybody else will eventually collapse. Insight was always focused on selling machines. Then three years ago, we diversified into selling plates and today it is a decent portion of our turnover. From that perspective our relationship with Kodak has deepened and strengthened.
RR: You have strong views about costing for digital print ...
AA: In terms of capital cost of press, running cost and use, it has to be feasible. I still feel that the very expensive digital presses still do not have a positive ROI for a commercial printer and therefore we are not in that space. At Insight, one philosophy that we have had is we cannot sell anything which doesn’t make ROI for our customers. Customer has to win. Only then we can win and we have been very conscious about it. There was a time when we have refused an order to a customer who has come with a bag of money. Nothing doing, we can’t give it to you, you are not ready for it. Go and buy a secondhand press. Just because you have lots of money, doesn’t mean you have experience. In that sense, we have been careful and focused on what we sell. 
RR: That’s interesting…
AA: It doesn’t make sense to sell something that you are not convinced about. It’s a short-term gain and a long-term loss. That is one of the reasons why I think the reputation of Insight has gone up. We have been fair to each and every customer all along; that’s part of our culture. We have been very honest in providing the right solutions and the right services. Of course, there might have been stray issues but by and large our customers are properly served. We have no kind of hanky panky job, no shortcuts. If a commitment has been given by any of our sales people, whether right  or wrong, we have honoured  it. A few simple rules and that’s it, they work. 
RR: Thanks to the ascendancy in digital, there’s one school of thought that says CTP systems are down and out. That it doesn’t have much of a future in five to ten years. What does it look like?
AA: This year again the CTP numbers will go up because the economy will bounce back. But the general trend is downwards because literally everyone has a CTP. You might have 10 presses, even then you need only two CTP systems. So we are reaching a point where we are starting to get the replacement business and the new CTP sales are sort of dipping. 
RR: What are the sales projections like?
AA: In this quarter, we sold 18 machines, which has been already half of what we did whole of last year. That’s why I see an upward momentum.
RR: Your take on the next 12 months. Where do you see this gain traction for Insight?
AA: I see a 20% growth from our last year’s numbers. We will aim at touching 250 crores this year.  
RR: Ajay Aggarwal, your final thoughts on how to sustain the leadership position with Insight. After all, you have been fairly low profile ...
AA: Oh yes! Insight is a conservative company and we hope that our work will talk for us. Even this interview is for me slightly uncomfortable. We are very careful about whatever businesses we have entered. And once we get into something, we put our sweat and heart into it. That has helped. As you know, we haven’t had too many ups and downs. Downs are rather flattish, and this has been the situation for everyone for the past few years. 2013–14 has been good. I keep asking myself: why and how? I think we have not done anything special. We are not great thinkers. And yet, the pieces in the jigsaw have been falling in place just because we do get a few things right. That might be the right answer.