Sangam Khanna: The issue is the impact on the end-user which will lead to lower spends

As per a representation by a printer body, there’s a 25% hike in the cost of input materials. Since January 2018, the cost of US dollar has risen to Rs 68.

In conversation with Sangam Khanna, director, Komori India, we find out what print desires under the rising dollar

23 Jun 2018 | By Noel D'Cunha

Sangam Khanna, Komori India

You represent a business which is dependent on crude oil volatility and the currency price fluctuation. Will the dynamics be altered in the short-term? 
The concern of oil price hike is most certainly going to dictate the final output on the balance sheet of each one of the printers in the short-term. The bigger issue still remains that the impact on the end-user will lead to lower spends as budgetary allocations made by the end-user as a planned expenditure may be difficult to be absorbed specially in the advertising expenditure and sales promotions. This will leave the printers with lower margins.

Crude has been a spoil sports that has left the industry reeling under pressure, because it will mean a hike in cost of inks, chemicals, lubricants and other petroleum-based products.

Adding fuel to fire to this mess is a higher price of interest rates. We have been curtailed to some extent as we will soon enter into the election year and the rising exchange rates.            

Do you think your company (and the industry) absorb this price increase?
Most certainly no organisation can sustain this kind of a price hike and the impact must be passed on as most of printing manufactures are already under stress of ever diminishing margins. 

Will this 25% industry-wide raw material inflation temper your company’s outlook for this year? What is the percentage you are looking at?
Most certainly such issues can bring stress to any organisation and is unsustainable. However if the oil prices go up everything changes – from steel castings, turning cost, paint shop, spare parts cost, other ancillaries, transport, operating costs and finally the cost of employees.      

From an export point of view, a strong dollar will boost turnover. Your comments?
Today the importers do understand this issue but chose to look the other way. This is bound to create a price war. Not a good situation for globally the print industry to be in.