Zircon targets Rs 100-cr turnover

Zircon Technologies India is one of the fastest growing label print firms in the country, clocking a compound annual growth (CAGR) of 40%. Sanjeev Sondhi of Zircon, which consists of three core divisions, says, “We want to touch a turnover of Rs 100-crore by 2015 in label printing segment.” He adds that once the target is achieved Zircon will hold five percent market share of the total label industry, which according to his estimates is around Rs. 2,000 crore (though according to our estimates it is Rs 3,000-crore).

Sanjeev has plans to diversify to new verticals of packaging to maintain this growth. “Five years down the line we would like to be a Rs 300 crore turnover company it seems difficult to achieve that through labels only. So we will have to diversify.” Sanjeev is aware that this dream is not an easy one to achieve yet he is determined to crack the code of success with diversification plans and customer-focused  approach.

Sanjeev feels that growth is always equally proportional to investment made. “We have decided a time period of 24-months to establish our new segments because we do not believe in one night wonders. We are sure that the new verticals will continue to maintain the compounded annual growth of the company,” he says.

To meet its target, the label printing company has been expanding its footprint via greenfield expansions, new equipment purchases, new technologies adoption, venturing into new segments, and tapping new customers.

The multi-locational label printing firm presently operates from its two plants in Dehradun and has another plant in Chennai and has seven sales and support offices spread all over India. Recently, the company acquired more land close to its existing facility in Dehradun to put another plant for new product lines. Sanjeev says, “In the next 12-months the land area of our Dehradun plants will be around 1,00,000 sq/ft.” He further shares that the company is working on plans to set-up a factory in western part of India. “It is a long pending plan of ours,” he says.

 “Diversified market, regional and small players, expansions by other companies, and entry of new players are making it more difficult for us to achieve the Rs 100-cr target. Therefore, we have decided to stick with 5% of the market share and expand in all other segments,” says Sanjeev, who owns patents and has developed number of security printing technologies, which Zircon has licensed under royalty to world leaders in the respective fields.

While Sondhi insists that Zircon will not de-link itself from the packaging decoration business, he shares that the next big diversification in line will be towards shrink sleeves. Later, the company plans to diversify to folding cartons, micro flutes cartons and also test the waters in the flexible packaging segment. Sondhi feels that while he does not see any saturation point in label printing, he expects the profit margins to hit a rock bottom.

Sanjeev has built Zircon on the philosophy of ‘differentiate or die’. He feels that equipment with latest technologies is critical to achieve one’s business goal. Thus, the company has ordered standard equipment for its shrink sleeves operation.

Zircon has set its sights on the growing Indian label print market and is following it with major investments in its pre-press to post-press operations. It has invested in Esko equipment which includes flexo pre-press and plate making workflow with a pre-press software workflow and HD CDI imager with inline UV. It was one of the early adaptors of the technology. In press, the label printing company is equipped with multiple lines of Mark Andy narrow-web flexo printing presses. Recently, the company commissioned an Omet Varyflex V2 narrow-web flexo printing press with a width of 17-inch and is in the process of ordering one more with several additional options. Sondhi claims that the new press will be one of the longest printing presses in the country, and will have the capacity to print 16-colours, equipped with flexo, gravure, screen, hot and cold foil options online. In addition, Rotoflex inspection systems, and slitter and rewinders equipped with Nikka cameras have been also ordered. 

 In 2005, Zircon was established as a barcoding and RFID firm. However, Sondhi realised that RFID printing was not very consistent and there was no surety of sales for such products. Thus, the entry to label printing was charted.

Zircon started with a Mark Andy 2200, a 13-inch press. It was a time when people were opting for seven- or eight-inch presses. “We started with 13-inch press; it gave us a leverage of 33% more production in the same time and cost. We started as a complete unit from day one, even though we were basically new entrant. It was quite tough to send out a message to the industry that while we may not be above the giants of the industry, neither are we any smaller than them.”  Zircon produced jobs with a resolution of 175 screen lines per inch even though the general practice in the industry was to produce jobs with 133 screen lines per inch resolution. Today, the company claims that it produces commercial jobs on more than 200 screen lines per inch resolution as a matter of routine.

“We never had a problem with manpower but it is also true that trained people are not available. We always try to hire local people for our plants and then train and nurture them. The best example is that our newly installed Omet is supervised by a lady who did not know the ABC of print when she joined Zircon a couple of months ago. More than 98% employees of the company are below 30-years of age. We invite all our vendors to our facility to train our people instead of going to their facilities,” he says. To increase the knowledge of its human resource, the company is also planning to set-up a small research and development centre in their printing facility.

Sanjeev is optimistic that new trends, applications, players and buyers will increase the bar of parameters. “Presently, print buyers ask for more eye-catching packaging with special effects like texture media, 3D printing, more fine graphics and others. All forms of packaging are growing, reasons may vary. Market is growing at 15% and large number of machines are coming in the country,” he says.

Zircon caters to pharma, FMCG, liquor, food and beverages segments.  Zircon has three divisions and its internal divisions are its biggest customers.  Sondhi concludes by saying, that his company is not looking at any mergers or acquisition and will look to grow through its own products.  “We have reworked our strategy and have now re-focussing on pharma labels. For the next two years we are focusing on organic growth only.”