Rs 100-cr is a game changing milestone

Dr Alok Bharadwaj, senior vice president for Canon India in a tête-à-tête with Ramu Ramanathan.

14 Aug 2012 | By Ramu Ramanathan

This is the Drupa year… In terms of leads and business, what has been significant for Canon from India’s point of view?
Last year was the first year for us, in terms of selling Oce products. Good thing is that we are not starting from scratch. Oce has been present in India with a large number of installations. CMS was our customer distributor, representing Oce. They deployed  more than 200 machines. This is globally one of the largest install-base with one customer. That is a good starting point. Apart from this, the great outcome of the work we began to do early last year was to explore selling Oce’s continuous feed machines. 

We had never done business of the continuous feed machines. It was obvious that it took us time to understand the vertical of transactional printing and book publishing. These were the two low-hung fruits for continuous feed. Within 12 months of our Oce pact, we closed our first deal of continuous machine.  The machine that we sold was the first machine globally for the Jetstream 1400 press.  So, it was a great start. We started with a bang and now, there is no looking back. Lots of customers were already taking interest, and after Drupa many more have joined the league. 
In terms of balance sheet, sales growth etc….
In 2011, Canon India crossed the Rs 100-crore business in the wide-format and commercial printing; including Canon and Oce. Almost 50-50%. This domain of ours is very critical for Canon’s business in India. Rs  100-crore is a game-changing milestone. We are now realising that this is the business that has huge implications for the future. It works on long-term profitability and sustained profitability. Even in the bad times, the business that adds resilience to company’s performance is this kind of business. We are very happy that we crossed Rs 100-cr last year. With Oce continuous feed, we have entered into a new business. And once it takes off, there will be no looking back.
Is there a reduction in terms of margins that core-competent manufacturers such as you enter into something like this?
Margins in this business are usually not that bad. There is a reasonably good margin. What is upsetting is situation like the Rupee devaluation. This year, the devaluation has been a disaster. The second big challenge is with companies, which operate on a higher-value  addition and high-end of the business. Company’s price-premium becomes a factor. 
Rs 2000-crore for cut-sheet and growing… Is there a volume change in that market too?
Calculating the digital print market is not going to be easy.  The best way to look at it is: the install-base, and based on our own experience, we know how much prints normally people take; how much would be similar machines or that of competitors. I definitely see growth in the number of end-users.
Last six months have been phenomenal. Although, there is a certain depressed consumer and investor sentiment, inflation is causing a pain point. The surge in digital printing is far too stronger than a temporary set-back due to the economic slowdown.
Oce’s Project Velocity?
The Velocity is a great model that serves the high-end value chain. We are consciously building marketing plans so that we operate in the high-end value segment. That is a long-term plan. This product is for direct sale. So as we are shifting our business model from distribution to direct sales customer base.  
In terms of shop-floor practices, where would Indian companies rank? 
Like any business or country, in India too, we have three types of customers. There are pioneers, who operate in the future. They are the ones who are bold, take risks, make investment, and adopt practices in automation. They know that they have survived the present and are ruthlessly ready for the future. The next are the climbers, who were not at this level some years ago, but are not yet close to the pioneers. They are very much followers, risk evaders and little bit in present and not in the future. Good quality-wise but they face the biggest constraint in expansion and scaling-up as they are more into present and are preparing for future. They believe that they need to survive in the present. A large number of Indian customers are in this category.  The third category consists of those printers who live in the past, at the low-end of the value chain. They are the ones who are taking advantage of the left-over opportunities by the first two categories. They are susceptible for any business shocks. Technology, work practices, space, etc. doesn’t matter much to them.
In some way, the print community lags behind in terms of pro-activeness, in what way can printers be made aggressive?
One thing that of course printers and companies need is to gradually shift the mindset towards value-adding. Currently, a lot of time is spent in managing the operations. Whereas the whole purpose of any business or leadership is defined to be creating values and constantly gaining competitive edge for future.  When that culture establishes in the industry, then we will have more value creation. But definitely, everybody can’t do this. There are pioneers who have to start this and as companies, vendors, we have to take special care that we drive it that way. Some part of our marketing efforts should be in this direction.
What are the big India-specific plans from Canon in terms of targets and installation bases?
We are now looking at the second installation of a continuous feed machine. We feel that in 2012, we must install the second machine. We want to penetrate deeper and are preparing the ground to go into 25 towns from the existing 17 towns. We expect a 40% year on year growth.

Five Questions
Favourite adda: Wine Cellar. I love collecting good wines.
Your favourite gizmo? iPhone
Your favourite Canon technology? Movie printing: the shots of a movie can be frozen and you can fire a print-out.
Your favourite Canon mantra? San-ji spirit (See yourself). It teaches us to about self-management, self-motivation and self-awareness. 
You wear many hats, which one do you prefer? The red Canon hat. Every two years, it pushes me to a new domain. This time it has pushed me to cinematography live imaging. The other hats of CII and MAIT help me connect with the industry. 

One day in the life of Dr Alok Bharadwaj
When you read the morning newspaper, besides half tones and colour reproduction, you look for… Competition ads; because it tells me how they are shaping the minds of the readers.
When and how do you begin your day? At 6 in the morning and make coffee for myself – and then offer it to my wife.
Do you plan your day meticulously? I am obsessive on my planning and scheduling. Planning can have an enormous impact on every minute.
How far ahead do you plan? I have three levels of planning. Three months planning, scheduling events or major business travels; my monthly travel plan; and finally, my daily minute-to-minute plan.
One person with whom you would like to drive to office? Why? I like driving with the frontline staff of the company. They are the horoscope of a company’s future. They are representative of the pulse.
First thing you do after entering office? Exchange greetings with my personal assistant, Poonam Rana, who makes my work effective.
If you are stuck with Gutenberg in an elevator, what would you say to him? I will propose a JV. I will tell him that I will handle your marketing.
A print centre in India which impressed you… The Friends print set-up in Manesar. The company has automated its plant. There are more machines than people. Has an international class to it.
Crazy print deadline you have heard about? I have heard many printers say that clients come to them at midnight and wait till morning to collect the job.
What you read on a long flight? Interesting stories on food and wine in fine-dine magazines.
A future print machine will be? A device that can erase, print or may be have a re-usable print.