Print Leela: Printers look at the year gone by

2013 was a challenging year for printing industry; cash flows were tight, raw material prices soared, interest rates bolstered, profit margins shrank. In spite of all the turmoil, the general sentiment of the print industry in general and printer’s panel at Romancing Print in particular seems to be that though the profits may have reduced, everyone has recorded steady growth.

06 Feb 2014 | By Rushikesh Aravkar

Six print professionals from North India participated in the panel discussion titled as ‘Printeron ki Leela: Print Leela’ at Romancing Print 2014 held on 15 January at New Delhi’s Ashoka Hotel. The panel discussion was moderated by Jacob George, the publisher, PressIdeas.

The panel constituted of:

C J Jassawala of Thomson Press
Bhuvnesh Sheth of Replika Press
Manoj Mehta of Manipal Utility Packaging Solutions (MUPS)
Satish Malhotra of Swan Press
Vividh Makhija of India Offset Press
Amit Tara of Tara Art Printers

2013: The year of turmoil

All the panelists acknowledged that 2013 was a tough year however, all of them have seen "solid growth". In the first round, panelists shared their firm's account of 2013.

Initiating the discussion, Bhuvnesh Sheth of Replika Press, said, “With problems in the currency market and steady rise in raw material prices, it has been a challenging year for us especially in the export market. On one hand, we were forced by overseas publishers to reduce the rates, while on the other hand, it became tough to make commitments thanks to rise in paper price, thereby making it difficult for us to strike a balance. With regards to domestic market, we saw reduction in overall business.” In 2013, Replika Press’ turnover increased by 22%.

Manoj Mehta of MUPS sees a promising future since Manipal Press joined hands with Utility PrintPack in December last year. Mehta said, “80% of our sales come from exports. Hence the volatility of Indian rupee was favourable for us. Last year, we recorded a growth of 22%.”

Swan Press saw an ambitious expansion in 2013 with a new 1,00,000 sq/ft facility at Manesar and the installation of a four-colour and an eight-colour press. Satish Malhotra of Swan Press, said, “The challenge for us was to garner more work. We did achieve turnover enhancements and reasonable growth. However, we have grown substantially due to expansion.”

According to Malhotra, the customers have become thrifty. Malhotra said, “It was impossible to pass on to the customers, the raw material cost escalation which we suffered. Currently, there is a slugishness in the industry.”

Amit Tara of Tara Art Printers, said, “Probably, the cut in print spend by the multinationals has been a key reason for the slowness. I feel, this will subside post elections when we have a stable government. For Tara Art Printers, we wouldn’t call it an year of turmoil, however sales have not been at par with our expectations. As of December 2013, we are down by 2%”

Thomson Press, which grew in the excess of 20% in 2013, thanks to the measures implemented by its executive director- printing, C J Jassawala. “The pressures on pricing have been severe. Secondly, interest rates have gone up and hence cost of borrowing has gone up,” said Jassawala.

Speaking about the internal and external weaknesses of the organisation, Jassawala said, “Thomson Press' biggest weakness is that we are a cost heavy organisation. Our fixed costs are too high. You can't write off costs that have been structured into the organisation over 20 years. So we had to see what we can do to make cost as an advantage.”

Vividh Makhija of India Offset Press had an interesting point to make when he said that his company has seen a sales rise in 2013. He said, “We worked on innovations and expanding the scope of services that we offer. We made efforts to incorporate services such as designing, digital proofing among others into our portfolio and transform into a one stop shop for the client. Today, the market condition is such that you cannot add too many new customers since you are not sure if they are going to pay.”

All the print CEOs unanimously agreed that there is a need for everybody to improve their efficiency and reliability. Moreover, retaining existing clients while adding new accounts was also one of the issues discussed. With diminishing profit margins, printers are looking to remain profitable. Wastage reduction, cost-cutting, looking for niche applications among others  were some of the issues that were discussed.

Jassawala said, “Five years ago, we carried a customer satisfaction survey and we realised that while cost is a threat, externally most of our publishers said we are an unreliable company. For the last two and a half years, we have been working at improving our reliability factor. We measure our reliability on On Time Delivery In Full of right quality. Two years ago we were at 35-40% reliability. We have been working aggressively towards improving our reliability. Since the last eight months, we have been delivering 90-95% On Time In Full of Right Quality. And I think that is one of the key reasons why customers will see it as a decisive competitive advantage. Moreover, we are trying to cut costs mercilessly across all five plants. We try to take every rupee that the customer will not pay for, out of the system.”

Adding to Jassawala’s pont, Makhija, said, “We tried to increase efficiency in our processes, most importantly we tried to save on purchase especially that of paper. In 2014, we will start importing paper and buy directly from mill. The second thing is that we identified our core competence and accept jobs that we are comfortable with. Another important change that we made was to cater to B2C market. I feel direct consumers in B2C space negotiate less as compared to B2B clients.”

Malhotra said, “We are into a spectrum of activities such as book production, commercial printing, stationery material, publishing among others. We focused on servicing publishing clients. In our stationery business, we saw increasing risks in dated range of products and hence we have added more products in the non-dated range. Our mantra has been aggressive marketing.

Tara added, “We are looking at cutting costs without compromising on quality by having  a much flatter structure in the organisation, retaining existing clients, maximising efficiencies in all three stages of printing thereby less wastage, higher productivity and less holding on time for machines.” When asked about if he will opt for digital, Tara said that it depends on the election results. The government policies on inviting foreign investments in the country will help me decide on digital investments.”

Thomson Press is also looking at investments in digital printing. Jassawala said, “From a strategic point of view, we have to reduce our break-even time. At a lower capacity utilisation, we must start making money. This means we need to try and garner higher average margins per page.”

“We identified and discarded applications which we feel are on the decline. At the same time, we are evaluating new avenues and especially the consumer industry,” said Malhotra.

Mehta said, “ I feel we need to focus on the LPG of business: liquidity, profitability and growth. If liquidity is taken care of, there are profits and thus growth is inevitable.”