SMI Labels and Packaging Materials

Thursday, August 30, 2018

Chris Ellison: FINAT President, setting standards in workflow management.

In an ever-evolving label scenario, the need to produce more efficiently, reduce wastage, shorten downtime, reduce interest and financial stress due to big inventories, reducing manpower and achieving more revenue per asset are necessities that will add to financial health of companies. To achieve the here mentioned imperatives, many companies are increasing the use of digital technologies, automation and artificial intelligence. This not only helps them to be system driven rather than being human driven but also empowers them to add to their bottom lines with peace of mind. Chris Ellison the 20th President of leading global label association FINAT has transformed his company OPM Group, Leeds UK, to be a lean manufacturing one with increasing use of automation and digital MIS system to put in place a workflow that performs efficiently and delivering the desired results. This leaves the management in a comfortable managing environment, their customers happy and results in better relations with all stakeholders including suppliers and customers. A walk through the OPM facility is a delight. There is perfect workflow with no bottle necks or stagnation of materials. A very neat and clean unit where every process leads to the next with aid of an IT enabled workflow and automation. The MIS system has been created by involving the internal team, all suppliers, prepress developers, logistic partners and customers as well. Generally, printers do not share information with their vendors, here the vision of the Ellison family has created a system that makes the unit to work with perfect harmony and the appreciation they get helps in better relations with their customers.

In most printing companies the sales force is nowhere in sight and the general perception on the shop floor is that sales people have all the fun travelling and partying with customers. Chris’s vision is to inculcate a sense of togetherness and team work in the entire workforce. Each shift when workers enter the factory, in the first room they get to see behind a glass wall, is the sales force working hard at their desks preparing for yet another gruelling day with customers creating a continuous flow of order. This also instils a sense of bonding as Chris feels that all the workforce needs to feel committed and create success with the inspiration, “Together we will”! Each order that is entered into the system goes through a digital workflow that is available on screens throughout the company and every department can see the progress without any hindrance. From costing, quotation, order approval, pre-press, inventory management, delivering raw materials to presses, finishing, packaging, despatch and invoicing goes on in clockwork precision. All staff, vendors, transporters and customers are hooked on to the system for the information that they are required to access and react to. It is an information highway created for smooth travel of all orders from initiation to delivery. 

One cannot see any congregation or unnecessary movement of workers in the factory or over loaded warehouse. A company with 20 million pounds turnover has just 73 employees. Chris says, “implementation of these system has helped us achieve a high turnover of 4 million pounds per asset or per Label press” he further adds that trained and efficient people are scarce to find so they must invest in an IT department and in training people, which is expensive, but it is justified for them to be more efficient. Subscribing to principals of Total Quality Management, all products at OPM are produced to ISO 9001:2015, BRC/IoP Global Standard Food Packaging standards Grade AA and PS9000:2016. They are printed using low migration/ Food Grade Inks. Truly, Chris Ellison as industry leader is setting examples for peers to follow.

Jack Ellison and his three partners ran a small engineering company building overprinting machines. His 20 years old son Chris wished to have his own business so started importing Dot Matrix printers from Germany and selling in UK. While in school Chris did not really excel in academics but was very inquisitive about how things worked, enjoyed creativity by changing things and wished to do something different and innovative. After finishing school education, he went on to a technical college to study engineering. He had two brothers and a sister. Both his brothers died due to cancer, one passed away at the age of 34 when Chris was just 15 years and the second at the age of 40 when Chris was 20 years old.  These losses left a void in him and he vowed never to waste a day in his life.
One Christmas a person made him a good offer and Chris sold his Dot Matrix business. Mean while one of the partners in his father’s company died in 1986 and discontent started between the partners creating uncertainty. His mother too was diagnosed with cancer at the age of 64 however she passed away much later at the age of 93, just one day after Chris moved his operations to the present facility. His father Jack Ellison could not take the stress at that time, so Chris first took over his father’s share in the business that his father was in with partners and later, since he had the cash from sale of his own business, he bought over rest of the partners. The company had at that time just installed a small Tackiboy label press. Operating out of 1000 square foot factory, 95% of the business was coming from the label press, machine manufacturing was terminated making them primarily a label manufacturing company. 

The company was renamed OPM Labels & Packaging group as Chris wished to produce labels and flexible packaging which till date remains their core business. In 1989 OPM bought their first flexo press Propheteer the very first one to be sold into UK. By 1999 OPM flexibles was in place to produce printed films, filmic laminates and sachets. They had by then acquired 6 Nilpeter label presses. As time went by OPM have upgraded their machines by replacing the old ones with new machines. This was done to achieve better efficiency, low wastages and faster production, the number of presses remain; 6 Nilpeters. A seventh Nilpeter is expected to be installed in the last quarter of 2018. About waste management Chris Ellison says “OPM take their environmental responsibility seriously, we are proud to assure our customers that their label products are being produced with as little impact on the environment as possible”. They have recently been awarded their Zero Labels 2 Landfill Certification.

OPM is jointly owned by Chris and his wife Susan Ellison. Susan is active in business, looks after the human resource functions, Manage and organise implementation of MIS and Automation systems, Project Managing, R&D alongside with Chris, offers inputs from a design and repro background, takes initiatives for new developments, marketing-Communications and strategic planning. She came to the business with reprographic experience having worked with various companies in the field. Their daughter Charlotte 28 and son Arnold 26 are also working in OPM making it a totally family owned and managed company. 

Chris feels it is challenging to keep pace with your business as it evolves. One must rely on people and motivate them to grow with your business, the leadership must have the desire, passion and will to take it further and pass it on to his team. Chris and Susan also are involved in a lot of charity work investing time and money in cancer research and aftercare. His elevation in FINAT as president has helped him to get a broader perspective of international label trade. It has helped his expand his knowledge through the global networking platform that FINAT offers. He tries hard to connect with the large spread out membership base and create value for members.

The above article is exclusively written for Label and Narrow web magazine USA. This may not be reproduced without permission.
Written by Harveer Sahni, Chairman, Weldon Celloplast Ltd. New Delhi India September 2018

Friday, August 17, 2018

Labels on the move-growth in India-2018

Fifty years ago, 80% of India lived in villages.

People are moving from villages to cities to experience the modern-day city life as they see on TV and internet. 

The scenario has transformed over the years. As a result of ongoing urbanisation, the urban population in India has now grown from 19.4% in 1968 to 33.5% in 2017. The shift has a direct impact on the consumption of household goods, as daily needs in city dwelling are obviously different and more than that in villages. More so due to the impact of a growing rate of literacy level which is the percentage of people aged 15 and above who can read and write having increased to over 72% percent from 40.76% in 1981. People in the working age group 15-64 years has escalated to 66.2%, from a level of 55.4% in the last 50 years. In 2017 the median age of the country, which is half of the people to be younger than this age and other half older, was estimated to be 27.9 years. In a country of 1.32 billion people a growing need for household goods or consumer goods also referred to as FMCG or “fast moving consumer goods” means there is an ever-growing huge demand for labels and packaging that are a part of the consumables they buy.

According to a report in The Economic Times dated May 01, 2018, consumer products market grew
13.5% in the Financial year 2018, with eight of 10 leading companies posting double-digit value growth, FMCG being the 4th largest segment of the economy. Online sales of consumer goods is also seeing an enormous rise as number of online users is poised to cross 850 million by 2025. According to a report by marketing research firm “eMarketerOnline” retail sales in India are expected to grow by 31% this year to touch $32.70 billion, led by e-commerce players Flipkart, Amazon India and Paytm Mall. Retail market is estimated to reach US$ 1.1 trillion by 2020, up from US$ 672 billion in 2016 further expected to boost revenues of FMCG companies to 104 billion US Dollars. The data herein mentioned indicates a definite, constant and escalating demand for labels and packaging.

Indian Label industry has been witnessing challenging time since demonetisation of currency and later due to implementation of GST. While these measures may be beneficial for the industry at large, yet they slowed down the trade impacting margins and revenues. With capacity growth already committed by existing label companies who had already placed orders for new equipment and by those entering the segment in this period, slow down impacted adversely the positive sentiment in label industry. The Label printing and converting equipment was being upgraded globally by machine manufacturers to achieve efficiency in production, reducing wastages, producing to economies of scale and was becoming more expensive. An industry that was used to a quicker ROI (Return on Investment) and better margins found the situation challenging, decided to be cautious and held-back investing decisions. While the economic parameters of growth as mentioned in the earlier part of this article were on the move all the time, a pause or back stepping for two years created a gap that has resulted in now a positive situation whereby new investments to increase capacity are being made. However still, label printers are apprehensive that this sudden indulgence may result in over capacity, promote unhealthy competition resulting in lower margins and make servicing of loans a little difficult. Despite this the positive sentiment in the label industry is evident as those who have excelled are committed to expand and maintain their position.

Change is the only permanent in a growing scenario, also stagnation leads to deterioration so one has to keep improving, innovating and expanding to remain in reckoning in a vibrant colourful industry. The label industry, much to the discomfort of the existing peers of the industry is seeing a lot of investment from the sheetfed offset printers. The sheet offset industry is used to big time investments in equipment and voluminous sales justifying their lower margins with massive turnovers. They were content with ever growing toplines, yet when the bottom lines needed strengthening labels appears to be a solution. While this would not add much to the top line but would surely contribute positively to their bottom lines. In a conspicuous effort to make their balance sheets look more presentable, it seems the offset printing industry is becoming indulgent in labels. It is for this reason we see label exhibition stalwarts Tarsus targeting the offset printers for their upcoming Labelexpo India. This is much to the discomfort of existing label industry constituents as it would add to the intense competition bringing pressure on already depleting margins in terms of percentage.

The label demand in India continues to grow and investments in label printing and converting equipment is on the rise. Though not much authentic data is available, yet the author based on experience and time spent in the industry has attempted to reach a reasonable size of the market. There are about 1000 label manufacturing companies in India. These include very small and big plain label, barcode label and product label manufacturers both in roll and sheet, spread all over India. The number of machines that each of these companies possess varies from just one machine to multiple machines, in many cases the machines installed are in double digits. On a very modest estimation if I assume an average of just two machines per label company, the total comes to 2500 label converting machines. The number of rotary machines announced in media in the recent past as installed in India over the years till now by leading label suppliers like Mark Andy, Gallus, Nilpeter, Omet, Bobst, Edale, MPS, Weigang, Orthotec, etc. coupled with those supplied by local manufacturers like Multitec 200 machines, RK label 150 rotary plus 600 flatbeds, Jandu 135, Alliance, Webtech and others, is well over 1500. Now if we add the used machines, the intermittent and other flatbed/rotary options, the figure is definitely over 2500. Working backwards for converting capabilities with realistic downtime, the per capita consumption of labelstocks is well beyond 1 square meter.

Calculating quantities of label stock manufactured from the number of coaters installed with Labelstock manufacturers we have, according to the author’s personal estimation, Avery Dennison is leading the pack and SMI following, together they account for over 40% of the production in India with almost 48 Crore or 480 million square meters per year. According to Jandu Engineers, who have been the main coater laminator supplier to the unorganised sector, they have till date installed 150 adhesive coating lines in the country. While Jandu asserts that his coaters run at 100 meters per minute but for a realistic estimation their speed with down time has been considered at 50 meters per minute. Added to this is the production coming from numerous Hotmelt coaters installed and together with the stock lots used, the total again justifies the 1 square meter per capita usage. Another evaluation done with base consumption that most in the industry had agreed at 0.25 square meter in the year 2003. Applying a year on year growth rate of just 10%, this year we cross the 1 square meter per capita usage. The estimation is the author’s personal estimation only, many of the industry peers may not agree with the author’s estimation yet it appears that we have come a long way in the last 20 years. The self-adhesive label production and consumption in India all including roll, sheet, stock lots etc. this year seems to have reached a whopping 1.30 billion square meters!!!

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi India September 2018