The SMI growth story

SMI Coated Products is one of the biggest label stock manufacturer in the country. In operation since 1993, the firm has encountered adversities and achieved milestones alike. Harveer Sahni, managing director, Weldon Celloplast, traces the rise of this ISO: 9001:2000 company.

30 Mar 2015 | By Harveer Sahni

Om Prakash Mehta, a resident of Kolkata pondered about the future. After losing all that was his during the 1947 partition of India, he was on the receiving side of the Naxalite movement in West Bengal in the mid 1960s. The Naxalite's ruthless activities were a cause of worry. 
He hailed from Multan (now in Pakistan), where he worked in the import-export department of a multinational company. His wife’s family was from Rawalpindi. Like most Punjabi families they were refugees in their own homeland, India. He had initially moved to Delhi and then later settled in Calcuta (now, Kolkata).
  • 1956 Mehta started a trading business. He imported cosmetics and watches. Due to cumbersome and restrictive licensing procedures prevailing at that time, he discontinued
  • 1960 He started making 3D photos gift items
  • 1961 He started his print lamination business. He produced lamination jobs for sheetfed offset printers
In 1961 Mehta, a father to three daughers was blessed with a son. Life had become stable and peaceful when in the latter half of 1960s the Naxalites in that area started to spread terror. It was a difficult period with each day being more challenging than the previous one. The Naxals became extremely active and bold, so much that Mehta had terrorists sitting in his verandah making bombs. 
One day in 1970, a Naxal suffered a blast and pieces of his hand landed in Mehta's house. At that very moment Mehta, like a true Punjabi, decided to move to a safer haven, where the safety of his family was guaranteed. He decided to relocate to Bombay (now, Mumbai). With a heavy heart and empty pocket Om Prakash Mehta headed to Mumbai with his wife, three daughters and son, Ajay. It was like partition for him, all over again!
Ajay Mehta, the present managing director of SMI Coated Products, was only 10 years old. Ajay still remembers the events unfolding and is proud to say his father was very brave and had the will to move on and grow even in adversity. 
Once in Mumbai Om Prakash Mehta started his enterprise SM Plastic Industries, named after his wife Shakuntala Mehta, at a rented premise in Nargis Compound, JB Nagar, Andheri. He continued the print lamination business that he had begun in Kolkata. One of the first deals he remembers is when he got a lead through Ajanta Printarts. They asked him to approach their biggest competitor and tell them Ajanta’s lamination job was done by S M Plastic Industries. The gimmick worked! He got the order and was soon doing jobs for printers across the nation.
The customer base grew. In 1977 he bought a space in Shiv Shakti Industrial Estate and moved his operations there in 1982.
  • Product portfolio: Three coaters, two coaters (one meter width) for emulsion adhesive coating and one coater (one meter width) for hot melt adhesive coating
  • People strength: 170
  • Location: Ambernath near Mumbai
  • ISO: 9001:2000
  • Reach: Products sold across 22 countries. 50% sales come from exports
  • Achievements: 
    1) SMI won the entrepreneurship award for exports from Government of Maharashtra for three years in a row.
    2) Awarded for being one of the top 100 SMEs at the national level, selected from about 63,800 contestants
    3) Awarded one of the Bank Of India SME small giants, selected from amongst 16,000 contestants
    4) Commended by PICA Australia for being the supplier to award winning printers
In the following three to four years the sheet lamination business started to get localised and bigger printers preferred to do it in-house. In 1983 Ajay Mehta had completed his studies and joined his fathers’ business. Ajay Mehta, as is expected of youth, was restless and wanted to diversify and grow faster. He wished to move on.
Leaving the print lamination business in the hands of a loyal team, which till this day run the business with support from Mehta, he moved on to establish in another enterprise in 1987. This unit produced fabric to fabric lamination like silk to flannel or cotton to cotton for shoe uppers using EVA for bonding.
He developed triple fabric laminates for shoes, bags and accessories. Ajay jokes, “The products were very good and gave a long life to the products they were used in. As a result, one and a half year later we were without any orders”. Even though they were supplying their products to the big players in the industry, the orders dried up. The reason: the end products would last too long and the repeat orders discontinued.
In 1991-92 Mehtas decided to quit the fabric lamination business. It was time to start afresh in another line. 
In 1993 they set up their labelstock manufacturing facilty, SM Industries, in a 750 sq/m unit at Daman. It housed a 20-inch width coater laminator running at 15 meters per minute. Daman provided tax incentives and turned out to be more cost-effective than Mumbai. Initially, it was a difficult job to run that unit because of the bad road conditions.
Ajay's father opposed diversifying into the printing segment. He stated that this forward integration would mean competing with their customers and they did not want to do so.
A lot of hard work went into making the unit a success. They initially made only sheetfed materials. In 1996-97 Ajay noticed that the bigger game was in the roll form and spent two years perfecting the quality, tension control, slitting, etc. In 1998-1999 they acquired a 40inch coater and started to offer labelstocks in roll form. Thereafter there was no looking back.
A year later they acquired a 20inch used hot melt adhesive coater laminator which they replaced with a new 40 inch Hotmelt coater in 2004.
In 2008 from their 750sq/m factory in Daman, they moved to a 15,000sq/m plot with 50,000sq/ft covered area factory in Ambernath, near Mumbai. All this while SMI, as they are now known, were outsourcing their silicone release liners. In 2009 they started their own siliconising operations.
Getting into exports was exciting, 50% of their sales now come from exports. Ajay says, “Life has been a constant struggle." He has endeavored consistently to improve quality and systems to achieve all this. He looks back and says, “I enjoyed the adversity, it was a good learning”. He attributes his success to his father’s efforts, his wife, Swati's support, and now to the SMI team. 
  • Education: B.Sc (Chemistry) from Mithibai College, Mumbai
  • Married to Swati in 1984
  • Children: Daughter, Nikita and son, Rohit.
Nikita, a third year student at the university of Mumbai is interested in performing arts. Ajay’s son Rohit, joined his father’s business in 2008 after completing his MBA in Human Resources and Marketing. As a director in SMI he takes care of functions relating to marketing, brand image, systems and administration.
Ajay is proud of his son and feels that in some time when Rohit is firmly in control, Ajay wishes to take a sabbatical of may be three years and tour around the world.
The first and earliest thing that Ajay learned at school / college was to curse. Second, he said his lecturer in college once told him, “You never attend lectures. You will fail,” to which Ajay replied, “I will never fail!”
Eventually, Ajay secured 71% to which the lecturer commented, “If you had attended the lectures, you would have scored more.” To which Ajay replied, “On the contrary it is the other way around!!!”
Ajay aspires that his company would continue to upgrade in quality and continue to attain global recognition. As a responsible industrialist he feels that the environment also needs to be considered and protected in their initiatives to grow and prosper. He feels they are in an industry that generates a lot of waste so it becomes their responsibility as industry leaders to find ways to recycle and dispose waste in an environmentally friendly manner. He is not averse to making investments in waste management reiterating his commitment to the environment. 
Ajay does worry about the depleting margins in the labelstock and for that matter in the labels industry. However economies of scale and better manufacturing practices have kept SMI growing at a steady pace.
Ajay Mehta is sure, if his company keeps growing at the present rate, it will be twice its size in five years even though he wishes and will endeavor for more. He asserts that he has never seen threats as a deterrent; in fact he learnt from them and remained focused on his products and their growth. He was committed to his goal and had ‘the will to grow, even in adversity!”
This article is published in arrangement with Narrow Web Tech Germany