HV Sheth: The Last Interview...

H V Sheth, president of Indian Printing, Packaging and Allied Machinery Manufacturers' Association (IPAMA) and owner of Sheth Printograph speaks to Ramu Ramanathan about the future of the Indian print industry, GST, and PrintPack 2019 from 1 to 6 February.

27 Jul 2017 | By Ramu Ramanathan

Ramu Ramanathan (RR): The new dates for PrintPack 2019 indicate a six day show as compared to the 2017 edition which was a five-day event. Why?
H V Sheth (HVS): The exhibitors in the previous edition were mainly from the printing and packaging sector. The packaging sector had exhibitors from the duplex and corrugated segment. For the 2019 edition we are expanding the scale.
RR: How so?
HVS: We will be targeting manufacturers from flexible packaging, screen, labels, consumables and paper. Five days for an exhibition with this range of participants seemed inadequate. The 2019 edition will also have a segment-wise approach wherein the exhibitors will be categorised under the various peripherals related to printing and packaging like web-offset, pre-press, labels, digital and so on.
RR: Is there going to be a drive by IPAMA to include the ink manufacturers, paper manufacturers as well as flexible packaging players into the umbrella body?
HVS: Nowadays a printer is not just someone who is printing ink on paper. He is also into labels, flexible packaging, corrugation and other such printing peripherals. So yes, we have to not only include but also involve the corresponding manufacturers and expand our offerings to be able to cater to the printer. We have begun our discussions and are hopeful that PrintPack 2019 will see a substantial number of participation from this now extended arm of the printing and packaging peripherals.
RR: So IPAMA’s message is, change ...
HVS: Yes. Transformation is the key and our industry is going through it. See the garment industry which moves from Tirupur to Bangladesh and now Bangladesh to Vietnam.  
RR: The feedback that we got from the exhibitors for PrintPack 2017 was positive. You agree …
HVS: As you know, we got only one and a half months of preparation time. The printing industry was still recovering from the effect of demonetisation at that time. It was necessary to get some traction for the show. So we slashed our rates for the power charges by 50% to Rs 250 per KW per day instead of the intended Rs 500.  We also gave away discount of Rs 500/- per square meter to all participants. Early bird discount dates were also extended to accommodate maximum number of participants. We were fairly liberal in our payment policies wherein the exhibitor was allowed to pay even at the very last moment. Food and other facilities at venue including loading unloading were far better than any of the previous shows.  With all these efforts we succeeded in having the highest number of participants as well breaking the previous record in terms of the number of visitors with a total footfall of 86,000.
RR: What can you tell us about the business at the show and the overall optimism?
HVS: Personally, I feel happy that on the business-end there were a good number of inquiries and sales. In 2019, I hope we are able to occupy all the halls from one to eight instead of just one, three, five and seven along with the outside halls as well at Noida Exhibition Centre. We have also put in a request to set up two additional halls. Furthermore the biggest attraction will be the metro rail connectivity to the exhibition centre which will get completed before the PrintPack in 2019 and hence we will be including the metro travel pass along with the entry passes. 
RR: In terms of total area what are we looking at with the additional space?
HVS: In 2017 we had covered a total gross area of 56,000 sq/m. We are looking at an additional 10,000 sq/m for PrintPack 2019.  
RR: You got elected as President of the Asia Print Association (APA) during China Print, at Beijing on 10 May 2017. How will you leverage this post? 
HVS: We will be paying more attention to visitors from these nations by setting up meetings and presentations. The member bodies of APA are Pakistan, Sri Lanka, Bangladesh, Myanmar, Malaysia, Indonesia, Korea, Philippines, China and Japan. Out of all these countries the major equipment manufacturers are from India and China. My aim this time around is to get the manufacturers from these Asian countries and build a partnership with the Indian manufacturers. 
RR: What is the conversation IPAMA is having with manufacturers from the Asian countries? 
HVS: At China Print this time around what I noticed was that although there was an upgrade in technology from the Chinese manufacturers, the visitor count was low. During my visit to China Print, we had a meeting with the Chinese manufactures to invite them to come to India and collaborate with Indian manufacturers.
RR: Regarding Goods and Services Tax (GST) one of the complaints we are hearing from the small manufacturers is that they are not ready. 
HVS: Most of the GST implemented countries in Europe have been successful due to a single-standard rate. The Indian printing industry is full of small manufacturers and hence there are many complications due to which currently there is no clarity. Most of these manufacturers are not well informed and it is difficult for them to learn and understand the online systems through which the GST will function.  
RR: So six months of initial chaos?
HVS: Yes, I think so.
RR: The Indian print industry has not been able to generate enough number of job creation opportunities. A matter of concern?
HVS: Yes, I agree with the fact that there has been a slowdown in job creations. There is one thing though, if you compare India and China in terms of the labour law, China follows the American policy of hire and fire. So the responsibilities given to them get fulfilled. Whereas in India, we cannot say anything to the labourers even if the output product is not up to the mark. And our government cannot do anything about this because labour is the vote bank.
RR: Everybody is talking about India as a growth story and international companies seem to be queuing up to come here. In your view how can the indigenous industry play a bigger role? 
HVS: As far as our industry is concerned I don’t think it is receiving the support it deserves. It is strange that the Government of India has not recognised printing industry as part of the growth story. Not even the government can function without printing and yet there seems to be zero acknowledgement about our accomplishments. 
RR: So what you are saying is that on a private-level some Indian companies are able to determine their own growth through collaborations and partnerships but others are huffing and puffing ...
HVS: Yes. It’s not as if the multinationals are not interested in Indian printing industry. They are definitely interested. But whenever there is a talk of collaboration or technology transfer, the formalities are innumerable and that makes it difficult for both the parties involved to cope with it. Our request to the government would be to create a single-window system to smooth the processes and implement them with ease, because without these collaborations or technology transfer the printing industry in India will be unable to improve.
RR: During one of our conversation earlier you had mentioned that whenever our industry has approached the government it is asked two questions. One, how much are you contributing to the economy? And two, what can you contribute to the government’s process? What would be our answer when the government asks us these questions?
HVS: I think what we mainly get asked is about the financial involvement of the companies in printing industry and the amount of man power it engages. In India, it is difficult to accumulate this data because of innumerable numbers of small manufacturers who don’t share the actual figures. Yes, there are big players but they are few compared to the vast number of small scale manufacturers and like it has happened elsewhere in other segments slowly the government is abolishing the small scale industries. 
RR: During print exhibitions, I have realised that a lot of people are good at selling the machine. We hear about a substantial number of orders that get booked during an exhibition. It’s only later after having done a cost break-up or ROI calculation, you realise that there are no, or very low, margins. What’s your take on this?
HVS: I will acknowledge this fact completely. Most of the manufacturers, when they are selling the machines, they are not calculating every aspect of costing. And by the time they begin with the procedure of fulfilling the orders, either the raw material cost shoots up or there is an increase in the service tax and the cost of transferring goods from one state to another also increases or there is this factor of the ever increasing labour cost and at the end of all this they still have to beat the competition on pricing.
All these factors point to negligible margins and hence there is compromise on service aspect, which further deteriorates the image of Indian manufacturer/ dealer. Earlier we used to charge service cost additional to serve the customer better but now no one is ready to pay the service cost. A printer says that being a manufacturer, you are making more profits so now it is your responsibility to provide after sales service in the machines cost only. 
RR: Would it then be fair to say that we as an industry have a low appetite for profit? We sell well and we are good at marketing. Somehow that is not getting converted into profits…
HVS: I cannot comment on the overall profit that a company decides to keep for itself. But there should at least be a substantial margin to be
able to provide good service to the customers
and more essentially to be able to constantly innovate with the product that the company is manufacturing.  
RR: There was time when the service cost was in single digit and now it has gone up. Is this simply related to inflation or there are other factors that have resulted in this rise?
HVS: Yes, initially our service cost was few percent (single digit) of machines’ cost. It’s not just the inflation that has caused an increase in the cost of servicing. Suppose I delegate my engineer to go and install the machine at a customer’s shopfloor; the costing for me has begun right at that very stage since the transport charges are costly, then once he reaches there and begins to put in the hours we have the conveyance charges to cover for his food and then the overall service cost that he charges for the installation and the daily wages that keep going up and so on. Previously, the buyer would willingly pay for all these costs but now these costs are to be borne by the manufacturers. On the other hand reimbursements have been increased nowadays. Service engineers charge for mobile bills, drinking water and other expenses too.  
RR: Guwahati in Assam is next on your travel itinerary as the IPAMA president. What is the kind of sense that you are getting from the smaller centres since packaging seems to be a new and upcoming segment with nine or ten packaging plants and factories that have come up in Guwahati?
HVS: Most of the product related packaging plants and factories are not going to set up in big cities in Assam. They are going to build the set-up in remote areas by buying large areas of land due to which the local government will also be providing benefits to them. The product companies save a lot in manufacturing cost mainly with the savings in transportation charges and savings through employment of local labour.
RR: Will these benefits go away once GST sets in? Places like Baddi, Haridwar etc with tax-free regimes; what will happen there? Will the 18% slab be uniform all over? 
HVS: Very frankly, it seems that even the government seems to be doubtful on that front. Slowly and steadily we will understand the government policy and what it aspires. But as is your question that if these benefits go away then it does seem difficult. From what I currently understand, and just to lay down a few of my own doubts, one will still require a work permit for transfer of goods from one state to another similar to what we have now. Not only that, one will also have to describe when the goods will be ready to dispatch, email the invoice and only then will government department send you the forms. And the goods must reach the place mentioned within the stipulated time mentioned. I feel all this will be extremely difficult to comply to. Our internet infrastructure and government websites are still not in place. Today in spite of mandatory online submission of returns, paper work dominates our lives. The system has changed but not the working style in Government departments.
RR: What next from Sheth Printograph in terms of the Daya brand of machinery?
HVS: We have a plan in place and we will announce it once we are ready. One thing that I have realised is that we have to constantly innovate, since the shelf life of a particular technology seems to be getting shorter and shorter. We have reached a stage wherein we are coming up with new innovations in print technology every six months.
RR: Post PrintPack 2017, if you could share an update about the models that you have booked in the last few months and about your company’s product range?
HVS: There is a lot of demand for customised machines and we have increased our manufacturing of customised machines since for the regular machines there is enough competition out there and hence difficult to get any margins. For customised machines the demand is not only limited to Indian market but it extends to the overseas market as well. 
RR: Sheth Printograph has made moves in the rigid box market. How strong is that market?
HVS: Rigid box has a good and growing demand in India. Particularly because of factors like mobile phones, jewellery, gifts and liquor. Packaging is booming in India but competition is sky-rocketing in this segment.
RR: One final question. How do you unwind in you free time? When you are not involved with IPAMA or Sheth Printograph?
HVS: I enjoy spending time with my family. Every year I ensure that I make two trips, with my whole family, in India and two international trips for a period of one week. We finish one tour and sit and plan together for the next. India is vast geographically and it’s amazing to visit places that this country has to offer. My recent favourite is Munnar in Kerala and it has been embedded in my memories. The peace that one finds in traveling can’t be found elsewhere.