Print will have to re-strategise, now

Seven stalwarts of the Bengaluru print industry attended a knowledge sharing session of three hours, which was hosted at Karnataka Offset Printers Association’s Toptec building.

23 Nov 2013 | By PrintWeek India

The first issue of the round-table discussion was to discard the myth that the print industry growth is slowing. This was through news about new installations and expansions in Bengaluru. All the print-firms’ CEOs felt, “It was important to nullify the notion that the print industry is on a downturn.”

Shivraj Shetty of Mangla Process
Shivraj Shetty of Mangla Process, run by a second- generation entrepreneur, has recently installed a perfect binder for their post-press department. “I feel post-press is of prime importance. I have already invested in a folding machine apart from the perfect binder. All these investments are in order cater the book manufacturing industry which is our mainstay.”

V Krishnamoorthy, Repromen Offset
V Krishnamoorthy, Repromen Offset said, “We just relocated one-and-a-half years back in order to accommodate a bigger establishment. I haven’t invested in technology owing to economic downturn. We have a full range of products be it pre-press, press or post-press, though only 50–60% of my entire capacity is in use currently. Unethical competition is also eating away at our share of the market. Being a multi-location company hasn’t helped us substantially. Moreover, the cost of the inputs has increased quite steeply.”
“There is definitely growth in the print industry, anyone who denies that is erring. But, troubling aspect that coincided among all the printers is the declining margin of profits. The crux remains in pinpointing the sector of growth. I have invested heavily in offset presses over the years and the turnover that I have achieved has been surpassed by much smaller firms from across the country. So, in order to find out the reason behind this skewed turnover numbers I realised that the boom now lies in the packaging sector and printers who catered to this sector were able to expand faster. It is very difficult for a company to reach a valuation Rs 150–200 crore solely using offset technology.”
 Krishnamoorthy added, “New machines are entering the market not necessarily because of a spike in the purchasing capacity of the buyers, but due a liberal approach adopted by financial institutions. Obtaining a loan is much simpler now than it was a decade ago.”

Venkatesh Rao, Omkar Offset
Venkatesh Rao, Omkar Offset said, “The 15% growth projected in the print industry doesn’t reflect the true state of the industry. 15% increase in the turnover is mainly due to the hike in the prices of the consumables. The turnover is definitely up but so are the monthly recurring costs. Hence, the figures don’t really show the profitability, which has plummeted. 

Nagsundar, Geetanjali Graphics

Nagsundar, Geetanjali Graphics said, “Technology has advanced more rapidly than the market. The presses of yesterday are no match for the machines that are available in the market today. The new technological advancement has increased our capacity, but the increment in work has matched our capacity.”   
Another aspect that came under scrutiny was the decreasing volumes. The printers agreed that the number of jobs have seen growth but in order to maintain a certain amount of freshness and attract more eyeballs print buyers keep changing their product designs.
Vishwanath Babu, Vishwakala Printers

Vishwanath Babu, Vishwakala Printers talked about the recent expansion that has spread across to commercial and textile related jobs.  Babu whose firm bagged the PrintWeek India Catalogue Printer of the Year 2013 Award, moved into a vast facility spread over 40,000 sq/ft located at Yeshwanthpur Industrial Suburb in Bengaluru. This is one of the fast developing locations in Bengaluru. 
The new building housing Vishwakalas’ entire operations is an imposing building with architectural elegance. This building adds sheen to the whole area. The building speaks volumes of the success of Vishwakala Printers, owned and steered through by Babu, known for his out-of-box thinking and doing things differently.
Rao spoke of of the threat of canvassers or ‘suitcase printers’ as the locals refer to them, who have been eating away at the printers share as well. He said, “The kind of personalised services that a canvasser can provide to a client cannot be matched by printers. Moreover these canvassers don’t have to worry about production cost.
The main focus of the second session of the roundtable was on the measures that a printer should employ in order to cut costs and increase the efficiency of their shop floors. PrintWeek India shared its research finding. This research indicated that the total runtime of sheetfed offset presses at 30 print firms was a mere 40% of the total runtime of the machines that produce ‘good’ copies; the rest of the 60% is non-productive time.
While deliberating on this point A Balachandra of Rajhans Enterprises, said, “A press has to be managed with a personal touch. And a print owner should be present as frequently as possible to supervise their shopfloor and ensure that presses are efficiently run. It makes absolutely no sense adding a new press to one’s arsenal when the presses that you already have are not running on their full capacity. It is imperative that a print entrepreneur has a complete control over purchase and production. There is also a scarcity of skilled labour, which is also a major contributing factor to wastage.”

Kailash Poddar of Carto Prints
Kailash Poddar of Carto Prints provided an passionate overview of the print scenario that exists today, he said, “The print buyers today are well versed with the latest technology available in the market and they have an in depth knowledge of the processes and the works. This gives them the power to in way dictate the terms. So the concept opportunity rate goes out of the picture. In an opportunity market, the manufacturer enjoys a certain level of freedom to dictate the rates; this has totally vanished from the print industry. Under-cutting a competitor’s quotation is also a major problem. A vast majority of the printers will lower their quotations just to beat their competitors even if it is not financially viable for them. Also the suppliers need to standardise their channels, today a majority of the suppliers will sell to any Tom, Dick or Harry if they are ready to pay marginally more than a genuine printers, but these customers more often than not end defaulting on their payments. This in turn gives the print fraternity a bad name. 
Poddar stated that his third point was, “the acute shortage of skilled labour. Printing industry’s growth is solely due to the natural demand in the market and not because of the superlative workmanship. This shortage of skilled workmen has always been Indian print industry’s Achilles’ heel. The technology has increased by leaps and bounds but the workforce still lags behind and hence Indian print firms, excluding a few have been unable to take proper advantage of the technology that they have acquired.”
Another thing that was discussed at length was management. It has to kept in mind that running a successful enterprise involves a great deal of internal man-management to make sure that the organisation functions like a well-oiled machine. In order to tackle this problem of unskilled labour, KOPA under the leadership of A Balachandra is planning to train workmen, educate and equip them with the technical know-how to get the most out of the presses. These training sessions are envisioned to last a couple of months at the KOPA office. The office-bearers are in the process of acquiring machines that will be required for these training sessions.
Balachandra said, “I am firming up the plans for the period 2013–2015 like making TOPTEC fully operational by building inventory of equipments  to enable us  provide hands on training to operators of member printers and aspiring printers and setting up library and databank.”
The last part of the conference revolved around the steps and measure adopted by individual printers and KOPA to expand their operations, be it customer networking, marketing strategies and innovations, or cost reductions. In this section the printers talked about their initiatives to reach out to their prospective clients and thus open up an avenue for growth.
Nagsundar said, “The problem today is that the corporate houses have a one-dimensional approach when it comes to hiring a printer, i.e. price. It has become the sole deciding factor. We are trying to bring awareness amongst the print buyers about the quality and transparency that a good printer will able to provide.
 Krishnamurthy felt, “When push comes to shove and printer vs printer, 99 times out of 100 it will be decided by a printer’s unique selling point. For a printer this USP is either his rates, quality or the service that he provides. But in today’s competitive environment printers cannot survive with just one USP. The customer expects the best price, best quality and service from the printers.”
More than 70% of the production cost is the raw material. So a printer who gets the best deals from raw-material suppliers undoubtedly has an added advantage compared to his competitors. The big printers, thanks to their purchasing power, have an edge over their competitors due to their unmatched consumption volumes. Technology is not as big a deciding factor as raw material when it comes to pricing.
All the printers unanimously agreed that the paper mills need to standardise. According to Kailash Poddar, “The vast number of substrated available in the market has led to unfair trade practices among printers. Today substrates like 58gsm, 60gsm and 62gsm are available, and it is very difficult if not impossible to tell them apart. Unethical printers use these almost similar substrates to cheat clients by using grammage substrates of the same grade. The only way of stopping this is by standardisation at the manufacturing level. Personally I feel that such a variety almost similar grammage is completely unnecessary; the mills should divide their substrates by at least 30gsm for every grade.” 
Nagsundar who was instrumental in organising the roundtable, said, “ Today is the right time to gain knowledge of the printing industry so that it enables one to know about future trends in the printing industry and its consequences which affects in day-to-day running of the industry.” KOPA and PrintWeek India will be hosting similar round-tables in the future.
The final word belonged to Balachandra who highlighted his personal journey from a small print firm to the present stature. He said, “My only advice to my fellow printers is to work as a team leader and not as owners have control over purchases and be more  thrifty in matters of deployment of personnel, and keep a close check on production which will also be instrumental in giving quality jobs. One must maintain good relationship with the customers and manage finances effectively, specially on interest, rent and instalment.”

The entire panel of the CEO roundtable