SMI Labels and Packaging Materials

Wednesday, February 24, 2021

Sonic Labels; Driving their startup to success.

 


S P Ojha and his friend Vinod Vaidya migrated from their ancestral home in Rajasthan to Mumbai in 1976 to explore new avenues in their career. In Mumbai Ojha worked his way to handling marketing operations for a Birla group company and Vaidya went into manufacture of writing instruments. Despite having moved away in different areas and getting involved in their careers, they kept the warmth in their friendship alive and would occasionally meet and reminisce their time together. At times, they also indulged in some business dealings. Both the families remained bonded, Ojha’s only son Aditya and Vaidya’s only son Kapil were school going kids, but like their parents they to became good friends. S P Ojha too started a side business of manufacturing regulators as contract manufacturers to other fan producers. Ojha and Vaidya used to often meet and discuss possibility of starting a business enterprise together.

Kapil
S P Ojha’s son Aditya Ojha finished his BSc IT  and wanted to initially start producing electrical items like dimmers etc. but his father who had worked in corporate world, wished that he does some business that is more organized, accountable, and straight forward. The unorganized small business had its own challenges and pitfalls with large amounts of cash handling. Vinod Vaidya’s son Kapil Vaidya completed his master’s degree in Computer Sciences and then attained his MBA from Sikkim Manipal University. Since his father preferred that Kapil should get some experience before indulging in business, he took up a job initially in Computer networking industry in hardware at Aksh Optic fibre company, where he stayed for 2 years. As Kapil’s father was into manufacturing writing instruments, he wanted Kapil to gain experience by working in other enterprises, he subsequently took marketing job in Flair Pens. After 5 years of doing various jobs, Kapil wanted to start his own business and a little different from the existing father’s business. As in case of Aditya, Kapil too found the pen manufacturing line too labour intensive. He wished to indulge in a business where there was automation. Someone suggested to him to get into printing and for that impulsively one thinks of offset. Since already many of his relatives were into offset printing, they decided to refrain from entering a field where they would be in direct competition with their relatives. So, they started to look for something else.

It was ultimately due to a suggestion by Kapil’s father-in-law Kashi Prashad Chamaria that they decided to get into label manufacturing. Kashi Prashad Chamaria was one of the earliest people to diversify from screen printing and start manufacturing labels. Kashi Prashad still has a 40 years old Labelmen label press running in Borivali Mumbai in his company Jepi Chemo Pack. Taking up on the suggestion of his father-in-law Kapil started researching about labels and gradually came in touch with suppliers of equipment and materials. Once the mind was made, both the friends, fathers of Kapil and Aditya, got together to seek each other’s opinion on the project. The decision was spontaneous, and both decided to let their sons Kapil and Aditya to initiate their startup venture as partners and they themselves would remain as mentors and advisors. Though they initially wished to install a high-end European press but were cautious to make an entry that would get them started and after gaining a foothold they would like to expand. The Kapil- Aditya duo speak very high about industry veteran Amit Sheth who initiated them and convinced them to opt for a Donghai Label press with the full set of allied equipment needed to start their label press. To see the demo of the Donghai Press they visited China and on return Sonic labels with Aditya and Kapil as partners were in label business in 2011. Due to support from mentors both families had business contacts from where business was assured to their startup venture. Their initial struggle was only in learning printing and converting labels. They happily say vendors supported them and became their teachers whether it was Ajay Mehta led SMI Coated products educating them on the labelstocks or was Flint providing information on the inks or Sanjeev Atre of PGI Tech teaching them about tooling or was Deepanshu Goel of Creative Graphic helping them with pre-press and drawings for dies. It is interesting to note that the vendors became their teachers, and they were quick learners who stand indebted to the team of venders who helped them in their initial time.

Kapil reminisces that the biggest challenge they faced was printing bar code labels for pens on flexo. Since their connect was with the writing instrument industry most of the business they were getting was coming from that segment. By their own efforts they have formulated a specialized process to create these and it has become a niche segment for them. Till date they remain perhaps the most successful supplier of barcode labels specially for pens industry. Though their first success came from supplying to a leading brand of electrical switches and thereafter the journey became smooth and growth oriented. Three years down the line Sonic labels felt the need for expanding capacity, they again pondered over the idea of going in for a larger European established brand press but on deliberation and mentor’s advice, it was decided that it is too early for them to take a big financial risk and that they should go in for yet another similar press, so in 2014 they acquired their second Donghai Label press. Unfortunately, in 2013 Kapil’s father Vinod Vaidya passed away. “He did not witness the success that we as entrepreneurs achieved” says Kapil in a pensive mood. As they progressed, their customers also started asking for corrugated boxes, so as part of diversification and expansion they also put up a corrugated box manufacturing unit. However still they are firm in their opinion that label market is more stable and growing part of packaging plus it has a lot of room for innovation. It is for this reason that post the downslide due to the covid19 impact, label is one product that bounced back the fastest.

Talking of short runs, they say they are comfortable doing that on their flexo machine only and have not really felt the need to go for digital, which they say is not cost-effective and their customer will not pay the higher price. Moreover, flexo printing is working very well for them. Ecstatically they mention that after acquiring the second Donghai, they were able to pay it off in just about 18 months and by mid-2015 with capacity fully utilized, they were envisaging yet another label press! Moreover, the previous two machines were only printing 6 colours, they had a constraint of not being able to cater to customers who had jobs of more than 6 colours. With focused marketing they had built up a good customer base for themselves, but it was a handicap and distressful to lose an order that was more than 6 colours. Ever since inceptions Kapil Vaidya had wanted  to have one of the best equipment available but they did things systematically and endured the initial struggling by investing conservatively in the initial years. Once they were fairly settled, they approached bigger brand owners for orders but faced a situation whereby they were asked which label press they possessed, this also motivated them to move on to a higher platform. This time around they had made up their mind to upgrade and so started researching on options available and at Labelexpo 2017 they finalized their order for a Gallus, a brand that had been in their mind since long, even though it was way beyond their planned budget.

Such is their dedication to labels that just a few months after installing their new Gallus label press Sonic Labels became the winner of the UV flexo special effects award at the Flint Group Narrow Web Awards at Labelexpo Chicago in 2018. The partners are optimistic about them achieving robust growth in the ensuing years by also adding more products that are in synergy with their printing capabilities. Aditya says, “IML is one growth area we have identified, and we are excited to add that to our range in the near future”. Kapil agrees and states, “we have established Sonic labels as a brand, we will continue to expand and grow”. At Sonic Labels, they are already running to full capacity so the next expansion may happen by end of 2021. However still they are committed to stay focused to label manufacturing and foraying further into IML. Digital or other printing technologies are not considered, as they wish to stay focused on the flexographic label printing that has given them success so far, moreover the costing of digital printing remains beyond their comprehension given the fact that India remains a very price sensitive market. As they grow, they are now concerned about waste management and may soon consider ways to reduce waste and evaluate processes to curtail their adverse impact on the environment. Waste also occupies a large amount of expensive real estate, so it needs to be shredded and responsibly disposed off.

With every new equipment they acquire they evaluate the output, make effort to reduce manpower, reduce wastage and implement more automation to minimise the dependence on operators. They have implemented ERP, CRM, and other management systems. They also plan to work on inventory management and implement “just in time” purchases to have a healthy cash flow. Both Kapil and Aditya feel that the label industry in India has a tremendous scope for growth. It is for them to envisage how much of this opportunity they can capitalize and benefit from. They are confident that capacity enhancement and expansion is going to remain a way of life for their enterprise. Given that vision, they still exercise caution and give a lot of time for planning before investing so that their investment gives maximum returns. Sonic Labels is operating with approximately 40 people out of a  shopfloor area of 10,000 square feet 40% of which is available for more expansion. They try to restrict their operation to the present location, but the growing business has prompted them to set up a finishing unit in Nashik, to service a customer at their doorstep there. It is maybe the first baby step to go multi-location.

Being in their mid-30s, both partners have the enthusiasm, vision, time, and zeal to rise above the crowd! They are a team to watch…

Written by Harveer Singh Sahni, Chairman Weldon Celloplast Limited New Delhi February 2021