KS Murthy: "It’s beyond our capacity to absorb volatility any more"

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 KS Murthy, director, Toyo Ink, we find out what print desires under the rising dollar

23 Jun 2018 | By Noel D'Cunha

KS Murthy, Toyo Ink

You represent a business which is dependent on crude oil volatility and the currency price fluctuation. Will the dynamics be altered in the short-term?
Printing inks are complex products and sometimes it is difficult to predict as to which segment of inks or allied products will get impacted by such situations. However, as you can see major ink manufacturers in India and worldwide have gone for price increase voicing out a clear message that this time around crude volatility and currency fluctuation together have impacted core of its ink costing and is beyond our capacity to absorb it any further. Having said that, Toyo does not expect any immediate changes given the current global trend.

Do you think your company (and the industry) absorb this price increase? 
No. For Toyo and the industry at large it is difficult to manage the cost burdens that have arisen due to this scenario.

Will this 25% industry-wide raw material inflation temper your company’s outlook for this year? What is the percentage you are looking at? 
The first half has been on par with our expectation. But with several challenges like crude oil volatility, currency fluctuations, economic scenario etc have impacted printing industry at large during the second quarter. This may probably impact the company’s outlook, however, with careful study of these changes we are trying to adapt and we are sure that our efforts and adaptive strategy will navigate us through these challenges.

From an export point of view, a strong dollar will boost turnover. Your comments? 
We are expecting an increase in our export volumes and a surely strong dollar is expected to provide essential support in boosting our company turnover. However, at the same time, we have to understand that strong dollar will have the impact on our input costs too.

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? 
I am a bit surprised. If there would have been no contribution than probably industry would not have existed. There would be no investments from ink manufacturers, acquisition etc. As you know, the top five companies have a manufacturing base in India, have either merged or been acquired by major MNC converters, have generated employment opportunities and more for the Indian economy. The print-packaging industry has definitely contributed for the economy at large, however, it is difficult to estimate the quantum of this contribution as many macro and micro aspects needs to be considered.