Presentation at St. Moritz, Switzerland in September 2003 as a part of the Cham Paper mills Pressure Sensitive Symposium. Now reproduced!
India is an exciting country full of diversity. The culture, language, religion, food, colour, weather/environment, etc. changes as you travel through the different states from Kashmir in the North to Tamilnadu in South or for that from Maharashtra in the west to Kolkata in the East. A country with 1 billion and 27 million people is now becoming the hunting ground of the marketing people worldwide.
The shear size of the market is attractive, though the urban population is almost 28% of the total population, but the growth rate of 31.2% in the no. of people in urban areas compared to the 17.9%in rural India, points towards a growing middle class and a huge potential market. Self-adhesive labels is a market that is now looking up and registering growth from the impact of this urbanization and consumer awareness due to the efforts of the marketing men, whether they are from Indian companies or from the multinationals. Selling consumer products by individual shopkeepers over the counter used to be the most widely employed method of selling till a couple of years ago. While it is still the predominant method yet the more global style of relating through self-service departmental stores is making retailing a fashion statement with marketers and consumers. This new trend has brought in a whole new demand on to the labels industry. Gone are the days when only esthetics was the criteria for finding a place on the shelves. Today a label has to perform in imparting good looks, last till the life of the product, give information and to top it all has to have variable information’s in terms of barcodes to facilitate selling, accounting, inventory controls, etc. This and many such trends have brought a surge of demand to the Indian label industry while it is difficult to dwell on all aspects which are bringing bigger volumes yet it will not be out of place to mention that a major demand is also arising from organised manufacturers practices where labels with a limited life span lasting only on shop floors are used. They help in assembly, inventory control, security, identification etc. People are coming forward with demands for new types of label applications that were unheard of in this country. The growth in this market has now prompted the label printers to get together and from the label printers association to look into matters relating to them. The Government of India trade policy reforms, provide an export friendly environment, with simplified procedures. Focus is on liberalisation, openness, transparency, globalization, moving away from restrictions and improving competitiveness to meet the global market requirements. All this has resulted in bringing in a whole lot of foreign direct investment in industry and infrastructure. Needless to say we now find international self-adhesive labelstock manufacturers like Avery Dennison setting up shop here. Raflatac did make a foray by selling through a distributor but the arrangement was terminated due to total reliance on imports. However still according to Mr. Kerri Palli of Raflatac whom I was talking to at Labelexpo-Brussels, “India is very much on our mind and will be our next stop to set up a manufacturing base”. Jacstaadt also had plans, Torsten JungLenz, their sales director, has a lot of friends in the Indian label industry. Now with Avery having acquired Jac, the market equation stands changed.
Indian market for self-adhesive labels initially was concentrated in Mumbai and it is thus that we find highest number of label printers and labelstock manufacturers there. Majority of self adhesive labels in the earlier days were the product of the screen printing Industry. Screen printers would print plain paper apply glue on the back, dry it, place the release liner and then die-cut. Then the offset printers moved in and with that came the demand for labelstock in sheets. Many of these printers installed narrow web label presses and soon the way self adhesive labels were made started to change.
Though the narrow web label industry has spread out to Ahmedabad, Pune, Vapi, Daman and other nearby areas but the biggest concentration still remains in Mumbai. This is attributed to the growth of large industrial base there due to proximity to the port. Growth spread to other areas, north India, due to its proximity to central government, has become a high growth centre. Setting up of facilities like Internal container depot, handling international cargo and custom clearance, made many multinationals and industrial groups set up industrial enterprises in this region. In my runup to writing this article this article I had sent a questionnaire to many label printers, label stock manufacturers, silicone coaters, adhesive manufacturers etc. Although, all did not reply, yet whatever replies I could get made interesting reading and I would like to share with you in these articles.
Market sizes and growth
In my effort to arrive at a relatively accurate figure on the size of the market, I asked this question but none of the respondents could give any conclusive data. Infact a couple of people who attempted, were way off the mark so I decided to make my own study. According to Mr.Praveen Shankar of Jubilant Organosys (formerly Vam Organics) the total market of water based PSA for label application in India is 5000 tons per annum. “Silicone consumption for paper release application in India is to the time of 300-350 tons per annum,” says Dipankar Dutta of Wacker Metroark. Based on my knowledge as a labelstock and release liner manufacturer I arrived at a figure, which correlates, to both the above figures. The production of labelstock by indigenous manufacturers is between 125-140 million square meters. This does not include the products offered or sold by Avery, Jac or Raflatac or those imported into the country. To my estimate additional 50% of the above quantity comes in imports in shapes of raw material, finished goods or stock lots so I estimate the present demand in India to the time of 200 million square meters most of which is paper stock and does not include tapes or other self adhesive materials. With this I arrive at a usage of less than a quarter square meter of per capita usage. Compare this with 12 square meters in USA, 8 in Europe, 7 in Japan, less than 1 square meters in rest of Asia. Most of the respondents suggested growth rate projections between 10-20% however personally I would rate it much higher. I refer to the “Asia Label Market briefing“ by Mike Fairley and published by Labels and Labelling, wherein it is given that self-adhesive market in India in 1999 was 65 million square meters. I take this as indigenous production and compare it to the figure I arrived at 125 million square meters, which means a growth rate of 40%. When looking at area wise usage the general views are that Western India leads followed by North, South and East in that order. However highest growth rate in terms of percentage seems to coming from North but due to the larger size of the market, bigger volumes still come from the west. The North Indian market is registering a fast growth owing to the fact that, National capital region Delhi and surrounding towns is the most urbanised area with 93% urbanisation followed by Chandigarh at 89.8%.
India has been a predominantly paper labels market. Recent trends and demands by innovative label designers has brought with it, demand for better and different face materials, whether paper or filmic. Higher converting speeds, newer printing methods, need for variable information printing and sensing of the printed data and other such requirements have forced labelstock producers to offer better face materials especially suited for required applications. Filmic stocks are picking up in demand. Today filmic stocks are less than 10% of the total labelstock usage but in terms of percentage higher growth rate are coming from this segment however due to the sheer size of the paper label segment the growth volume will remain much bigger in paper.
Water based emulsion adhesives are the most widely used adhesives in the Indian self-adhesive labels industry. Almost all the new capacities that are being created employ water based emulsion PSA. Solvent borne acrylics and rubber resin adhesive are only a miniscule portion of the industry. However the underdog is hotmelt adhesive. Indian label printers are taking a fancy for this. Prasad Accumeter and Stay on Papers in Hyderabad, and Interlabels in Mumbai must be given credit for contributing to the growth of labelstocks with hotmelt adhesives. Newer capacities in hotmelt segment are being added. Two new Nordson hotmelt coaters have arrived one for Millenium papers, Chennai and one for Weldon Celloplast Ltd. in New Delhi. Most of the Indian Labelstock manufacturers employ locally made coaters to coat water based adhesives however a few exceptions like Kedia Lamicoats at Silvasa have installed a used Windmoeller and Holsher coater.
Solvent based tin catalyst silicone systems have been the most widely used and accepted silicone coatings. With installation of faster converting rotary label presses and to remain competitive printers wishing to drive volumes, the need for better release coatings became imperative. Metroark Ltd. which is now known as Wacker Metroark was the sole supplier in earlier days so the scope for development was limited. Then with the advent of liberalisation came the other players like GE and Rhodia. Soon a pleasant change has started to descend the silicon liner market. GE and Rhodia had their technical men visiting the leading coaters and advising them to improvise and use their existing machines to coat newer technology. Today thermal curing solvented and solventless platinum catalyst silicone system are being used by a a few coaters in India. However UV curing and electron beam curing systems have not even been considered so far. Faster label dispensing and applications is putting pressure on more and more label printers to opt for the advanced silicon chemistries on the release liners. In terms of substrates used for siliconising, glassine remains the most preferred one. However cheap stock lots of SCK tempt may converters to use it. It is interesting to note that some top of the line converters of computer labels in A4 format are specifically demanding SCK and CCK liners for this application because of their lay flat properties and non slip feeding into the printers. Notably amongst these printers are R.K Papers at Mumbai and Rational Business Corporation at Delhi. Filmic liners are now also being experimented and used in certain products.
Printing Technique :-Flatbed, letter press printing remains the most widely employed printing technology. This is mostly due to the lower cost and local availability of dies as compared to expensive and imported rotary dies. Progressive and dynamic printing companies are now opting for newer, faster rotary flexo label presses as also semi rotary letter press machines with a variety of option like UV curing, laminating and hot foil stamping stations Machines like Nilpeter, Gallus, Aquaflex, MarkAndy, Iwasaki, Kopack, Comco, Orthotec, Focus, Arsoma etc have found their way into many label printing units. Though highest capital investment is in the West, with concentration in Mumbai, the highest growth in terms of percentage is coming from the North, South comes third with Eastern sector trailing. To my knowledge in recent years Amit Sheth of Sheth Graphics has successfully sold atleast three Orthotec machines in Calcutta. Other than this the Eastern market relies on screen or offset printers for self-adhesive labels. I am not aware of any additional capacities in label printing created the last couple of years in this area.
Almost all the respondents to my questionnaire feel there is no slow down in the label industry. They all foresee a bright future for the Industry. Entry of Multinationals like Avery, who are now omni-present in the industry is welcomed by printers as they feel that they will make the market grow and develop in quality. What is surprising is that other labelstock manufacturers share this view. Infact most of the respondents in the industry feel the presence of multinationals is good news however they are all optimistic that the multinational labelstock manufacturers will not enter into label printing. It shows an underlying fear, given the fact that Avery markets labels and other finished labels worldwide.
Apart from the normal growth it appears there will be a marked shift from wet-glue labels to the self-adhesive labels. Mr. Ravindran of Seljegat in Sivakasi is optimistic and happy that the liquor industry has started its shift towards self-adhesive labels this will be a major chunk adding to the usage of self-adhesive labels in India.
Without mentioning the development being made by manufacturers of label presses in India this study would be incomplete. Pioneering work is being done by many, I would like to mention the achievement of Baldev Singh Jandu of Jandu Engineering who has now over eighteen fully rotary label presses in operation and has orders worth another six in hand. This is incredible! All machine are flexo rotary. A word of caution comes from all against the free inflow of B grade materials and stock lots into the country. In words of Pranay Goda of Kaygee Papers, it is the biggest threat facing the industry, label printers and suppliers should form an association, educate end users and set standards.
Time has come when more and more constituents of this industry are coming forward for the growth of the industry. Formation of label printers association at Mumbai, launching a B2B portal www.pressuresensitivematerials.com by Weldon, a label show has to be held in 2002, etc are some of the steps that will promote the industry. With a market as large as India there is only one way the demand can go…..Up!
Note for print publications: Magazines may reproduce the above article by giving credit to the author.The above article is written by Harveer Singh Sahni, Managing Director of Weldon Celloplast Limited, New Delhi-110008 in August 2003