Ramu Ramanathan: A good time to re-think and overhaul

Covid-19 has made our world topsy-turvy. Since the 21-day lockdown, everyone I know has become a coronavirus expert. To paraphrase Socrates, "The one thing that is guaranteed to multiply on our planet is stupidity." Because stupidity is contagious. The amount of forwards and cut-and-paste on social media platforms has been baffling.

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Meanwhile, goods and services tax (GST) collections are down and so are the revenues from fuel, liquor, stamp duty and registration charges. At the same time, the states are incurring bulk of on-the-ground expenditures on containing Covid-19. As Manipal Technologies' Gautham Pai said to me, "The economic impact of this pandemic will be severe." What he was implying is, that besides the tragic loss of life, the lockdown will affect the lives of millions of people. This is especially true for retail, hospitality, transport and tourism. 

In all this, good old fashioned ink on paper has been struggling to keep its head above the rising waters – most things created out of paper and paperboard. According to the WHO, it is safe to receive a package from an area where Covid-19 has been reported. 

As the trickle-down effect of the 21-day lockdown was felt, many industry bodies started to lobby. The industry CEOs I spoke to are unanimous...

  1. 95% Indian firms are in lockdown mode. Newspaper and key packaging factories offering tech support. Pharma and packaging supply is operational. A leading self-adhesive stock manager said, 10% label manufacturers are working.  
  2. Zero cash inflow + 20% fixed costs for three months; even though we hear talk of pay cuts and layoffs.
  3. The grim news is one out of five commercial print establishments will be shut down by the end of 2020.

In all this, I have received invitations to attend more than 50 webinars - informational/training. I attended a few sessions. It's the same-old-same-old.

The point is, our industry needs an overhaul. The biggest hurdle is the Indian print culture. This is a good time, as any, to take a good hard look at the process (most factories our team has visited are not process-oriented), the people (most factories still follow the Ustadji system of training instead of technical training with fundamental tools), and finally there is the ownership model, which prevents professionalism. This is the one reason, blame-game is the biggest bane in our industry.

Things are grim. For how long? One quarter? Two quarters? Till 2021? 15 CEOs, the PrintWeek team have spoken to say they do not see Capex investment for a year. In fact, post demonetisation and GST, we saw only large companies been investing. Now, there will be an erosion of small-time companies, and the mid-level firms will be hampered by other macros. This means the industry needs to lookout for new and innovative markets.

Can we see digital printed hand masks and medical gear? Can we re-design food packaging? Already, the hand-santiser market has witnessed a 10% market increase. Cavinkare has entered the market with a Re 1 sachet.

I am hopeful about our species' resilience. I am also hopeful that there will be technical collaboration across national borders. I am hopeful that businesses and governments will work together. For example, the huge investments in malaria (M2030 – a regional partnership between business and governments to end malaria in Asia; or even Dietmar Hopp, the owner of a German football club being the unlikely messiah with a Covid-19 vaccine) can be deployed to vanquish the coronavirus.

Tomorrow, when this global crisis will pass, let the Covid-19 be a reminder that investing in robust health systems is not optional. We must invest in our future.

(Photo of Ramu Ramanathan in the story has been rendered by Jatinder Shroff, Nutech Packagings)