Kaushil Shah: People working on very low margins will have to shut the shop

As per a representation by a printer body, there’s a 25% hike in the cost of input materials. Since January 2018, the cost of US dollar has risen to Rs 68. In conversation with Kaushil Shah, director, Nulith, we find out what print desires under the rising dollar

23 Jun 2018 | By Noel D'Cunha

Suresh Shah (l) and Kaushil Shah of Nulith

70-80% of input material in the print process is produced using the imported raw material. How will this affect your business, plus the pricing negotiations with your customers? How will your company absorb this price increase? What is your strategy?
Print industry overall has reached its maturity, where volumes will keep growing at the cost of margins. Those who cannot take advantage of the economics of scale will definitely loose business. In the short run, the dynamics may not change, but in long run people will pass on the increase.

Will this raw material inflation temper your company’s outlook for the year? What is the percentage you are looking at?
Not everyone will be able to survive through this price hike. People working on very low margins will have to shut the shop. Plus some price hike will happen if not 25% and in long run when the cost would go down, it will be added to your margins.

From an export point of view, a strong dollar will boost turnover. Your comments?
With Chinese government shutting down factories harming the environment and a favourable exchange rate, this is the best time to export. They will be able to make up for last five years and coming five years. It’s their golden period.

When the top-level delegation met the GoI representatives, they were asked what is the revenue the print and packaging industry contributes to the Exchequer? Can you hazard a guess?
Every possible thing needs a packing and considering the spend on the packaging, it is increasing day by day. I think our industry must be contributing 0.9% of the GDP.