SMI Labels and Packaging Materials

Sunday, September 30, 2012

Mudrika Group; Stickers to labels and beyond…


Manish Desai
It is generally perceived in India that a doctor’s son will become a doctor. Traditionally Indian families follow the rule that the sons take up a profession similar to the one that their father has pursued. This is more so because the father wishes it so. Also the nuances of the profession or trade that they have been in, is firmly entrenched in their minds. They are able to train and advise their off-springs when they inherit or for that matter, indulge in a similar profession. The joint family system is also responsible for such decisions by the or for the, generation next. Mumbai based R N Desai, a finance manager with Johnson & Johnson, had a different vision for his inheritors. Contrary to the above, he wished and emphasized that his sons will never be in service. They have to be successful businessmen. His children accepted his advice earnestly and worked hard to prove him right. The family prospers and grows in business due to the vision of this man. Sandeep, Vipul and Manish have given their best in building the Mudrika group to what it is today. The group continues to expand giving credibility to the motivation of their mentor. While Vipul and Manish are R N Desai’s sons, Sandeep who started it all is their cousin yet they are always seen as real brothers who are exceptionally well bonded. Manish, the youngest of the three fondly remembers that he was so influenced by his father’s decision that during his vacations in school, he used to trade in small things to make some extra money. The inclination and indulgence in trade at such tender age was definitely the reason for them to be so committed to their work.
In 1975 Stickers, was a relatively new development that was drawing attention and interest of many people. A time when people were using a gum bottle to squeeze out that little amount of glue from a squeezable bottle and spread it on the paper label and stick! It was an exciting innovation, just to peel off this paper label from the release paper and press it on to where you want to place it. Simple, neat and clean! Sandeep was working for a greeting cards company at that time. This new innovation, excited him and caught his fancy, he started to experiment with it. He would get these stickers made on job work basis and sell to customers. The project worked and a year later Sandeep left his job to plunge full time into this activity. In 1976, he started to screen print at home with 3-4 workers. The youngest brother Manish was just 10 years old then and was excited to see the stickers being made. This must have been the basis of his aggressive involvement to build the label business in later years. 1977, Sandeep moved his production from home to a proper 500 square feet facility in an Industrial Estate in Malad, Mumbai. From screen printing, he shifted to getting the paper printed on offset on job work basis, applying gum by screen, drying and then die-punching. After seven years in Malad, in 1985 Vipul joined business. As the self adhesive labelstock industry evolved, pre-gummed sheets also became available easily. Sandeep changed his business model yet again. This time around he would buy pregummed sheets and send them out for printing on sheet-fed offset presses and then he would die punch them in his factory at Malad to finish the stickers. This became a regular business and some amount of stagnation did move in. When a business delivers the desired results and takes care of one’s immediate needs, the resistance to implement change is evident. The foundation had been laid and it was time to move ahead and at this time infusion of young blood is like a shot in the arm! Manish Desai, after completing his B.Com from Mumbai University, joined Mudrika. It was time to shift gears and put Mudrika into the fast forward mode.
By 1991 the manufacturing space at Malad had swelled to over 7000 square feet however still all the printing was being outsourced from various offset printers in Mumbai. The need to have own captive printing operations became imperative. A 2500 square feet factory with an offset printing press was setup at Mahalaxmi in south Mumbai. In quick succession Mudrika expanded into packaging as well. They started to produce micro-flute monocartons, corrugated shipper cartons and folding cartons. In 1996 Manish Desai with his fondness for stickers made Mudrika labels a more indulgent and active organization. The first label press, a refurbished Kopack was installed at the Malad factory. Mudrika had moved from stickers to labels!
HTL Labels
The fast forward mode was starting to show. Just another year later the Desai brothers setup a 20000 square feet, 300 tons per month corrugated master carton manufacturing unit at Daman. Though the decision to setup a facility at Daman was due to the tax benefits available there but that reason alone does not make industry to prosper. It is the motivation, dedication and hard work of the promoters and their team that brings the fruits. All along Manish Desai had his heart in labels, in 1996 he took a very strategic decision, even though he had just one label press, he did a backward integration exercise and initiated the captive manufacturing of self adhesive labelstocks. Besides giving him an edge over his competitors, it also became another profit centre. Between 1996 and 2000 Manish increased his involvement in labels and was instrumental in installing a total of four Kopack label presses. He reminisces that the first press was virtually idle for a full year because it was a period of learning and settling down in a new manufacturing process. Understanding label printing to achieve was a very crucial part that lead to his success in years to come. He was lucky to have found crucial support from his supplier of machines in the early days. The supplier, who became a dear friend, would send his engineer from UK at short notice when ever Manish ran into a problem and would not charge him for that. Manish went on to buy five machines from him.
Manish with his new Gallus!
By the start of the new millennium the brothers divided their responsibilities to take the group forward in a systematic way. The eldest Sandeep, a B.Sc from Vidya Nagar Gujarat, became the face of the Mudrika group in corrugated board packaging, Vipul, an environmental engineer, took responsibility of building the offset printing business as also taking care of the labelstock manufacturing and Manish took responsibility of leading Mudrika Labels where all the expansion and quality up gradation came by because of his initiatives. In 2004 another 12000 square feet factory was setup at Vasai to produce labels. Four Gallus label presses were installed in this unit to catapult Mudrika labels in the select group of big label printing companies in India. Meanwhile the labelstock manufacturing was also expanded as need for stock grew with their expansion. They now have three coaters out of which two are for emulsion adhesive coating and one 1000mm hotmelt coater. In 2011, the Desai brothers took another pioneering decision of expanding into gravure printing to produce highly decorative HTL labels with Korean knowhow. All three brothers are looking after this unit to take it forward and plan to expand this business as well.
The Mudrika group has ambitious plans to expand further into manufacture of packaging products that have synergy with their present business and customer base. They will be making capital expenditure where ever they find necessary and are evaluating the way forward. They also plan a five colour intradeck UV press to produce metalized paperboard cartons. The label unit is again under an expansion programme with another 45000 square feet factory being planned again at Vasai near Mumbai. The land has been purchased, government permissions have been obtained and construction at the site is likely to begin soon. They also plan to add 18000 square feet space for offset printing business and 8000 square feet for expanding their labelstock manufacturing operations. The present scale of Mudrika group’s business emanates out of production at various facilities spread over a combined aggregate space of approximately 75000 square feet with over 300 employees. Manish is very bullish about his group’s expansion plans. A new logo is planned and a makeover is being put in place to build the brand, “Mudrika”. Manish Desai has worked his way up in the Indian label industry and has been the past president of LMAI (Label Manufacturers Association of India). He is confident that the three brothers will be able to grow the business to at least twice the size of its present operations in the next five years. However they have no intentions of patronizing the much fancied digital printing in any of their manufacturing operations. As regards their commitment to the environment, he feels they need to do more. At present they send all their label waste free of cost to the boilers at some paper mills for incineration.
The generation next in the Desai families is all girls and it is unlikely or too soon to say that any of them will join the family business. Manish has two daughters, Stuti the elder one is in class 12th and wishes to pursue medicine while Astha, his younger daughter is in class 8th and unsure on what she will do in future, Sandeep also has two daughters both of them are married and live outside India and as for Vipul, his only daughter is in class five. The brothers have decided to gradually professionalize the group and as promoters they would eventually one day into the future, withdraw from the day to day management. They wish to see their Mudrika group which started with stickers and moved to labels, to go beyond…into packaging and more.

Written by Harveer Sahni, Managing Director, Weldon Celloplast Limited, New Delhi-110008 September, 2012

Tuesday, September 18, 2012

Nine Months! Delivered and here to stay…FDI.

On the 10th of December 2011, on this blog of mine http://harveersahni.blogspot.com I uploaded my post, “FDI in retail, Government defers it, Industry gives a thumbs-up! This was a post that the industry appreciated and lauded. The industry leaders who gave the thumbs up were those whose opinion matters! The industry did miss a heart beat when the decision was put on hold due to political compulsions.

Industrialists pour in investments into manufacturing facilities foreseeing the growth in market and expecting the surge in demand. Expansion and capacity enhancement with focus on producing world standard products does not come cheap! In a country like India that is home for over 1.2 Billion people most of whom are educated, young, earning more and expected to spend more, the demand for consumer goods is bound to surge upwards. The expectations of growth increases to higher levels when government decisions like allowing FDI in retail become a reality! At such times going by their projections, stakeholders do make the investments to enhance capacities. Capacities cannot emanate immediately when demand arises. They come around when manufacturers assess demand based on government policies, decisions and make projections that prompt them to invest in state of art equipment to enhance quality production. If at this stage, the government reverses decision in FDI, it would be a deterrent to growth. The pause button is pressed instantaneously. As an equipment supplier to the label industry I and my colleagues did experience the impact of this pause last year. Ordered equipment was put on hold. We lost crucial time…nine months, perhaps.

Indian PM Manmohan Singh
Last week, the Manmohan Singh government in India, finally stood up firmly and faced the opposition to declare that FDI in retail is a reality. Also emphatically, they asserted that the decision now was here to stay. The catch that looks to be a deterrent of sorts, is that the states still have the choice to block this process. However, one can see the steady transformation to big time internationally participated retail already initiated. Opposing states will fall in line as they witness the results in states that accept the process. The controversy is that the Mom and Pop store around the corner will suffer and wind up. A mild protest also says that the farmers may also suffer. However all know once the middleman is out the farmer will get better realization for his produce. The politicians will be left assessing who to back, the mom and pop stores or the farmers. The eventuality will happen and change the lifestyles in this country.

Change does worry and is difficult to accept but when you see your neighbor progressing, the me-too factor makes an impact. Imagine a Wal-Mart store at the Delhi border adjoining the state of UP (Uttar Pradesh) where FDI in retail is not accepted. When people in UP in the NCR (National Capital Region) start to patronize such stores in numbers that process cannot be ignored, the evident will happen, Wall mart will also cross the border of these states that are resisting now. The loss of revenue due to tax collections will trouble any state government. Once retail grows, manufacturing has to grow to fulfill the demand. Demand for labels growing is just a matter time. With that will grow the demand for equipment, toolings and materials.

It has been a few days and the opposition parties are mounting the political pressure for a rollback but this time around the decision seems to be firm, the Government is ready to face the music as it comes. The prime Minister says if we have to go down we might as well do that fighting. The industry has already given their thumbs up. The government is committed now, finally it did take them those magical nine months to deliver! As also to ensure that FDI is here to stay!!!

Written By Harveer Sahni September 2012