The reality of digital label printing in India

Consider this: A label player with conventional narrow-web presses. He does not have any background of digital printing. At the moment, he rejects jobs which are short-run in nature as he is not in a position to print them cost-effectively. He is planning to bring digital in-house so that he does not lose out on these jobs. Is he on the right track? Industry insiders would say he is. With a digital press, he can take up short-run jobs and also add value to his customers. Yet, in the Indian

29 Sep 2015 | By Noel D'Cunha & Dibyajyoti Sarma

Going digital in a flexo market
First, consider the scenario. India is a large country with a population with diverse cultures and religions. These different cultures have different festivals. Retail marketing professionals are formulating ways to tap the selling opportunities such occasions offer. “In this, print on demand capabilities of digital printing provides the perfect solution,” says Harveer Sahni, managing director, Weldon Celloplast. “Consumer product companies can offer limited edition packs with regional festival branding.”
Yet, while digital printing has made an impact in sheetfed in India, it still does not have many takers in the narrow-web label printing. According to Sahni, one reason is that most established offset printers are catering to their customers who need short-run jobs, lest they lose the business, unlike sheetfed, where large offset printers are still focused on high volume customers.
Sahni argues the Indian label industry is still undecided on digital printing. “Most of the larger narrow-web printers have been toying with the options for the last few years. Some have taken cautious steps into the technology, there are others waiting at the threshold and the rest would like to wait and watch the ones who have indulged,” he says.
The reason is simple. The cost of producing digital labels is very high. “Only a specific segment of consumers, who are in urgency or doing specialised products will initially indulge in these labels,” Sahni says. 
Narrow-web label printers, converting in roll form and catering to large brand owners, will need digital printing equipment with online finishing. This makes the already expensive equipment more expensive. So, the printer is actually in a dilemma and has to look at his customer base more minutely to foresee that he gets label prices that justify the investment and ROI.
“Printers going digital will also need to invest in special marketing teams to supplement their existing corporate customer base with customers in personalised retail, specialised event marketing, wedding planners, focussed product launches, festival marketing, etc,” Sahni adds.
These are all valid arguments. Yet, there is no denying the fact that digital is making inroads into the market and serious label printers cannot turn a blind eye towards it. For example, we have leading press manufacturers like Gallus, Omet, and Nilpeter, offering digital capabilities on their analogue label presses. At the forthcoming Labelexpo Brussels 2015, these press manufacturers will showcase their innovations in digital and conventional printing brought together for the narrow-web label industry. 
At the same time, Sahni argues that flexo has really evolved. The quality has improved and integration with different technologies is propelling it further. “The evolution of inline laser die-cutting is ensuring precision. At this point, laser die-cutting is a costly affair because its needs to be regularly replaced, but once the technology evolves and becomes cost-effective, it will affect mechanical die-cutting,” he says. 
On flexo, Gourav Roy, managing director, Flexo Image Graphics, says while the technology remains the same, automation is increasing and people are focusing more and more on short-runs. “When it comes to short-runs, people need to make money. So, they look at opportunities on how to changeover from one job to another quickly. Pre-press has grown, with features like HD flexo and specialised screening systems, which help produce good quality flexo,” says Roy. He gives the example of Mark Andy, who has come up with a quick change die-cutting cassette system.
“Nilpeter has a a solution, the  Caslon project, where an inkjet head was fitted onto a conventional press. Here, you can have two-colour with conventional flexo, a digital and a converting unit,” says says Manish Kapoor, manager, sales, Nilpeter India, adding, “Digital label press, according to me, is not viable to a market like India. I have seen people having a stand-alone digital press and not doing well.” 
Also, digital technology gets obsolete in a very short time. One can use a conventional machine for around 15 years. In digital, one will have to reconsider once a new technology becomes available. Comparing conventional to inkjet, one can definitely produce inkjet labels along with laser-guide finishing, but it is limited to certain speeds and certain substrates. So, technology keeps evolving. 
Are combi-presses the future then? It would be a combination, says Roy. “A converter, who needs a combi press, will also need simple straight forward presses, because there are lots of straight forward labels in the market. Parallel combination is needed, but still the percentage is low,” he says.
According to Vasudevan LK of Epson, the Indian label market is poised for higher growth trajectory primarily due to business environments getting positive in the last two quarters of this financial year. It will get a further boost in coming quarters with most Indian companies having an aggressive outlook after a sluggish growth in the last two years or so. And, digital label presses will play a part in this. 
“The trend is very simple,” says Vasudevan, “All major players in the label market will need to have a digital platform sooner or later. They may avoid investing in a digital press for a year or so, but eventually, they will have to come around. At the same time, players, who have already plunged or planning to plunge into digital now, will have the distinct early mover advantage.” 
Vasudevan says Epson’s Surepress advanced digital press is a trendsetter, as it is the most cost effective solution available for convertors who are looking at short-run labels and ultra short-run labels. “Surepress sets new benchmark in high quality labels/ pantone coverage/ small font text/ seamless shift from flexo to digital and vice-versa to allow maximisation of the available resources for the convertors,” he adds.
And, the return-on-investment (ROI)? “The saving what Surepress brings to the table cannot be gauged just by the equipment cost and the running cost alone,” says Vasudevan. “There are other parameters, like reduction in media and ink wastage, that too in short-run jobs. Other advantages include saving in plate-making cost and power consumption. Also, compared to other presses, this requires less manpower.”
This is exactly the reason why, says Vasudevan, “we always want converters to think digital machines like Surepress not as a supplementary solutions to their existing setup but rather complementary.”
Talking from a brands’ perspective, Vasudevan adds, “Brands, which are interested in breaking the clutter, always look up at digital as their best bet, as it helps them in their experimentations.” 
Digital also allows brands to think out of the box, as well as to move in the direction of personalisation and sub- and micro-brands.
But personalisation and VDP hasn’t really caught up in India. 
“While brand custodians are always looking out for personalisation and VDP options, it is unfortunate that even best of print service providers today get stuck in the price sensitivities, rather than looking at what impact they can create for the brands they service and justify the investments required to their customers,” says Vasudevan, adding that there is still hope for the future and Epson can be the catalyst in bringing the new standards in labels.


Ranesh Bajaj of Vinsak believes brand managers, retailers and packaging convertors want to learn and adopt the digital technologies due to their reliability as well as versatility in short-run campaigns with bespoke messages and in printing of variable data (Barcodes, 1D/2D codes), which help in anti-counterfeiting as well as in track and trace for the supply chain. “We do have solutions to offer for these applications,” Bajaj says. 
When it comes to ROI, Bajaj agrees that adopting a new technology requires a lot of investment. On the plus side, however, he argues, this comes with print enhancement, personalisation as well as newer applications and solutions that one can offer. “With new solutions and enhancements to offer, convertors are in a better position to add more business as well as revenue to achieve faster ROIs,” he adds.
Anyway, digital is not a replacement for the analogue printing processes. “For off-the-shelf, long-run jobs, brands will still use the conventional process. However, for value addition or enhancement, they will have to adopt the digital workflow,” he adds. “In the last two years, as the economy was slow, companies were not running special campaigns, etc, requiring personalisation. Going forward, we see a number of new opportunities in this space and in short-term, you will see an increase in personalisation volumes.”
According to Bajaj, other than labels, digital can be used in areas such as direct mail, commercial, transactional, security printing, tax and excise stamps, flexible package printing, graphics, and 1D/2D codes, to name a few.


Multinational label press manufacture Screen made its first presentation of its Truepress Jet L350 UV to its first customer in India in July 2014. “Since then, we have shown samples and have printed samples for couple of interested customers, showing the capability of the press and consistency with prints done at our demo centres in Singapore and Japan,” says Nitin Wani, country manager – business development, Dainippon Screen. 
Meanwhile, the European Digital Press Association (EDP) voted the Screen Truepress Jet L350UV digital label press as ‘Best Label Printing Solution’ in the 2014 EDP Awards in Munich, Germany. The Truepress Jet L350UV made its worldwide debut at Drupa 2012 and became commercially available in 2013. 
The printer has a 13.7-inch web width and linear printing speed of 164 ft per minute. It prints in wide-gamut CMYK, utilising Truepress high-definition UV inks. 
Wani says with increased market and volume, ROI, based on technological investments, will become viable. Further, there has to be a right combination of capital investment, operating cost, print quality and throughput for making ROI feasible.
What about the brands? Will they embrace digital fully? “In India, cost plays a major role and all decisions are evolved considering the cost,” says Wani. “Besides cost, the process of going digital requires commitment, additional investments and systems in place along with change in mindset. Therefore, unless brand owners are able to reap the benefits of digital, they will not move forward to go fully digital.”
 But, they will not be able to avoid digital either. “We are confident that over a period of time, paradigm of brand owners in India will change from cost per piece to reap other benefits of personalisation,” says Wani.
Wani believes as label printing companies seek to differentiate themselves in the marketplace, they have embraced printing systems that can provide greater product diversification and higher added value with shorter turnaround, without employing specialised technical skills. 
“This has led to a significant increase in the market for on-demand printing systems. At the same time, successive annual growth in illegal copying and counterfeiting has fuelled demand for a new label printing technology that can ensure product authenticity and resolve related issues,” he adds. 


According to Simon Lewis, director, strategic marketing, Indigo Division, HP, Israel, the company’s digital printing technology has what’s called the classic set of benefits – time to market, supply chain cost and ability to run runs of any lengths. He gives the example of the ‘Share a Coke’ campaign. “It shows how the moment you allow marketing to influence the labelled package, you are using the most valuable real-estate you have to interact with your consumer. The purchasing clerk is looking for lowest package cost; the brand manager is looking for biggest bang for the buck. When you look at getting bang for the buck, you will realise that digital printing revolves around versioning, regionalising, localising, and linking it to events or any kind of promotions. We see our customers talking to brands, what they need today,” he explains.
Lewis, however, agrees that brands will never go digital fully. “From their converters’ perspective, there are going to be brands that will buy digital from converter ‘A’ and analogue from converter ‘B’ and there will be brands that will buy both from the same place,” says Lewis. “We have customers who are fully digital, and at the same time are scaling up their operation. At the same time, some of the largest converters in the world with massive analogue operations are investing in HP Indigo digital capacity since they don’t want to be left behind. They are prepared to take on the challenge of looking at high-value digital in low volume while doing high-volume analogue for a relatively low-cost. 
Lewis also does not believe in personalisation much, which he thinks, is a gimmick – a great gimmick – but essentially a niche. So what does he see in personalisation? He answers: “I look and I say, sports fans go to sporting events; they spend a lot of money on the tickets. If I could create a specially packaged bottle of water or whatever, say, for the FIFA games in Brazil, I am sure everyone who buys that product will take it home. I will have no problem getting 20,000 products that are unique to an event and shipped to one location. That’s not personalised to any one person, but versioned or event-driven personalisation, perhaps it can be called mass customisation and that is where the opportunity is.”
What about track and trace? “Track and trace will have a full digital implementation or a hybrid implementation, so you are going to have a label or package and you digitally print the code and there could be hybrid as well,” he says. 
In this dichotomy between analogue and digital, what role a digital giant like HP will play? Lewis says HP has two roles, one, enabling technology and two, get the eco-system rolling. “We are not anti-analogue. We complement. We are not going to see analogue go away,  we are going to co-exist. There are some things that make sense when done conventionally and some that makes no sense doing it conventionally. We care about the industry, and we care for the eco-system. Yes, of course, we compete with Heidelberg, but we also cooperate.,” he concludes.


The converters' side of the story
Niraj Darji of Astron Packaging in Ahmedabad says, “The situation (Astron’s) is that 60% of the pharma export jobs for the US and European markets fall in the range of 5,000 to 10,000 cartons per SKU. So, we needed a machine which caters to the particular requirement. With a digital press, which could handle cartons and labels, this niche requirement of small volume jobs, which is painful on the conventional presses, can be completed with ease.” 
He adds that on the Indigo, a gamut of CMYK OGV produces the desired colour while on a conventional press it will be a combination of CMYK plus special colours. 
“This difference can be detected if one explores deeply with an eye glass. But for the customer’s eye, there won’t be any difference,” he adds.
While on occasions, Narendra Paruchuri of Pragati Offset, has mentioned that “digital has to wait a while”, Hyderabad-based Pragati is in the process of installing a HP Indigo. He argue, “The labels printed on offset/flexo/digital will vary as the technology used is different. This difference has been accepted very well in the west.”
Narendra Paruchuri of Pragati Offset explains:
PWI: Why can’t it become acceptable in India?
Paruchuri: When you print a direct Pantone shade and a simulated Pantone with a combination, they will look different. One is a solid and other a combination of many colours. I agree with the statement made by Mr Darji that to the customers’ eye there will be no difference. But this would be the customer who buys the product. My problem is with my buyer. He has to have a mindset to accept the difference. This is a point of discussion and while we are confident that we can produce the labels on flexo or digital within tolerable Delta E, it is not being accepted fully by pharma companies. 
PWI: What is the model adopted in the west?
Paruchuri: Printing for short quantities is much more economical in digital. As such, it is accepted and the client understands that within Delta E of 3-5, it is acceptable. If he insists that he needs the short quantity by flexo, then he will have to pay much more. That is not the case in India. Without any doubt, colour management is the key. Without it we cannot go far in print, be it digital or flexo or offset. So, for people without graphic arts processing background, it would take more time.  


According to the NPES/PRIMIR World Wide Market for Print study, published by the Economist Intelligence Unit, “the size of India’s print market will be USD 29.3 billion in 2017 up from USD 24.3 billion in 2014. Print market growth in India has slowed down since the global financial crisis, but the market will continue to grow over the period through 2017; total print product revenues in India will grow at 6.8% annually through 2017”.
Digital printing accounts for 15% of all printed products globally. However, as for India, given the late start and slower adoption of new and fast changing technologies by the cautious print fraternity, even if we make a moderate estimate, the market size for all the digital printed products should be within USD 3-4 billion, says Harveer Sahni. Pankaj Kalra of Xerox stated in 2012, that “the size of the digital printing market is estimated at USD 1.5 billion now and is expected to grow to USD 2.5 billion by 2012-13”, clocking a whopping 70% growth! The packaging and label segment account for over 40% of the total printed products in India and the segment is growing at 15% against a global growth rate of 5%.