SMI Labels and Packaging Materials

Wednesday, July 1, 2020

Life in Labels-Yesterday, Today and Tomorrow!

A resilient label industry that was reeling under the adverse impact of lockdown due to Covid-19 is now clawing its way back to normalcy despite facing a highly stressful financial situation that has left them staring at a massive gap in cashflow and loss of production. Customer demand is low as regards retail, with malls still not opening to full strength and consumers restricted to their homes, buying only essential items of use. A sudden spurt in requirement of sanitizers and pharma products has given a fillip to the label requirement but one is left wondering how long this will stay and with increasing number of printers offering similar products, the price of labels for this segment will also soon become intensely competitive and non-remunerative with no value addition needed as a necessity. The silver lining is that the industry at large is confident to bounce back to the pre-Covid levels, but this may take a few months to a year or more. Underlying threat of the virus not dying down continues to haunt the industry and it is time to look back evaluate the present and foresee or plan for a consistent future.
The previous pandemic termed as the deadliest in the history of mankind and called “Spanish Flu” lasted a little over two years from 1918 to 1920. It impacted almost 500 million (50 Crore) people across the world, which was around a third of the world’s population. It killed more than 20 million (2 Crore) people around the world, the worst impact appears to have been in India that time when almost 12-13 million (1.2 Crore to 1.3 Crore) people, almost 5% of the population that time, lost their lives to the flu. With no vaccine or antibiotics those days, general preventions such as isolation, quarantine, good personal hygiene, use of disinfectants, and limitations of public gatherings were applied to control the spread.
Label industry in India had been registering a consistent double-digit growth for past many years. It still managed to keep growing while the country went through, demonetization, implementing of GST and economic slowdown. In recent years we have seen printers expand and enhance their capabilities to empower themselves with diverse printing and converting technologies to create innovations so as to remain in the profitable league of business owners. We saw in recent years the number of label printers grow in all segments indicating the robust growth of demand with which growth of labels is directly linked to. It has been an interesting phase when we have seen the likes of Seljegat in South India expand to a 40,000 square feet  factory, Any graphics in North from humble beginnings to building a 250,000 square foot green factory, Sai Packaging with their factories in Faridabad and Bengaluru, Sai Comcode also going multi locations and then our home grown printers Mudrika Labels and Zircon starting initially as only label printers crossing the Rupees 100 crore sales barriers. This was also the time when we saw multinationals move into the country either directly or by mergers and takeovers, these include the likes of Skanem, Signode, Huhtamaki, Brady’s, Printcare, etc.
Populations around the world have grown many fold since the previous pandemic and medical sciences are much advanced yet it is 4 months since Covid-19 has hit the world and there is no sign of it coming to an end, the numbers just go on escalating. However due to the availability of advance medical facilities which too are falling short in view of growing number of affected people, the recovery rate is relatively good. Yet people are suffering and dying in numbers all around, businesses are in a dilemma of lost production due to lockdown, worker migration, reduced demand and total closure for travel and hospitality segment. It will be a long time before the economic recovery takes shape and return to pre-covid levels. I asked several questions to label printers of varying size across India and reproduce some of their relevant responses as below.
1.       How has the lockdown impacted you?
a.       Raveendran Seljegat, Sivakasi South India: We were closed for a week but then because we supply to important pharmaceutical companies, we got permission to initially run with 30 people out of 150 and 10 days later we were allowed to work with 50. Subsequently we got permission to work with 100% but as per Government directive we gave retirement to workers over 50 years with full settlement without any deductions. Now we are working with 140 persons in 2 shifts for social distancing.
b.       G K Deshpande, Geekay Printing and Packaging Bangalore: Our team was shattered, as many workers went home out of fear, we had to manage with few. Our digital printing facility helped us in meeting requirements of customers from pharma and food segment.
c.       Manish Desai Mudrika Labels Mumbai: Due to reduced work force we must work with flexible timings and holidays. We have lost 2 months of production and sales; payment terms have become unviable hampering finances.
d.       Himanshu Kapur J K Fine Prints Mumbai: Monetary wise the impact is huge but will be short lived. I see another 3-4 months of pain, hopefully after that we should be back to pre covid levels.
e.       Mahendra Shah, Manohar Packaging Palghar: The impact is there but it is a boon to manage in getting a more responsible output with 50% work force 
f.        Dilip Modi, Integrated Innovators Ahmedabad: Business down by 25%
g.       Manish Hansoti S Kumar Multi Products Ahmedabad: The impact was there but not as severe since we came under the category of essential supplies. We had to operate with just 25% strength. The bonus was managing life with less and enjoying quality time with family.
h.       Rajendra Gandhi Maharshi Labels Ahmedabad: We had to shut down factory without prior notice, some machines need daily maintenance without which they begin to go faulty. Today, even after 3 months, we are still not at full capacity. Overheads are increasing, sales are not.
i.         Rajesh Nema Pragati Global Indore: Looking at the positive side, “It has brought me closer to my extended family.”
j.         Hari Shankar Modi ModiFlex India Kolkata: Two months of no productions!
k.       Priyata Raghavan Sai Packaging Faridabad: We have lost turnover for 2 months, have absenteeism and many losses piled up. Payment and Inventory cycles have gone off track. We are now fighting to stabilise vis-a-vis earlier when we were fighting for growth. Many major customers have declared Force Majeure leaving convertors like us, in a difficult situation.
l.         Rajeev Chhatwal Kwality Offset New Delhi: Sudden lockdown announced came as a surprise. All production was stopped resulting in nil sales for nearly 2 months. Orders got cancelled, inventories have piled up and severe liquidity problems are being faced.
m.     Anuj Bhargava, Kumar Labels Noida: Negative: Lost one full month’s sale, Positive: Learned to work efficiently with least resources
n.       Luv Shriram, Shriram Veritech Solutions Pvt Limited Noida: Reduced sales resulted in impact on profitability / longer cash cycle and customers are delaying payments
o.       Shakti Jain, Great Eastern IDTech Pvt. Ltd. Gurgaon: Significant decline in business revenue, liquidity (cash flow) crunch, logistics (delivery) issues persist. 
p.       Kapil Chaudhary ZENBI International (P) Limited: Not much impact on business, we got many new orders for sanitizers and FMCG Sector.
q.       Vinay Verma Label India: Our bar code business suffered, and we were not supplying to food or pharma, so had to wait. Fortunately, the sanitizer label demand has helped us back to work in a limited way.
r.        Mukesh Goel, Gopsons Noida: Few of our core sectors are down and expected to resume up to 80% pre-covid levels only by Q1 FY21-22. During lockdown phase, we were operating at minimal strength. We trained our employees to run multiple machines, larger benefits of which we are realising now. With multitasking, we have created a reserve pool of employees to meet any unforeseen situation or another lockdown if it happens.
s.        Ajay Mehta, SMI Coated Products Mumbai: The lockdown has impacted everyone in the world, we are no exception. It is unbelievable that we have mostly been at home for the past 100 days. Personally, it has been a great opportunity to spend time with family, especially my grandson whom we have seen grow from 5 months to 8.5 months. On the business front it has been a challenging and satisfying time to keep all motivated within and outside SMI!
t.     Nirav Shah Letragraphix Ahmedabad: Lockdown has impacted the overall mind-set of people. We were also impacted in the beginning. However, on 4th day of lockdown-1 we received all necessary approvals to start the work with minimum possible capacity. Our staff members also quickly accepted the change because of which we could come back to operations in short time. The adverse situation has taught many lessons. Instead of waiting for post Covid scenario, I wish people accept situation and work towards betterment. 
Almost all the respondents have lost sales, have been impacted adversely for cash flows or profitability and are now working with reduced workforce. They are learning to live and formulate processes to use the adversity as an opportunity to cutdown manpower while retaining same productivity.
2.       To what percentage have you resumed operations?
Surprisingly amongst the 20 respondents only four companies have resumed 100% production. The rest also have resumed but their levels vary between 50% to 80% the industry average can be estimated at 65-70%.
3.        How are you implementing safety and social distancing norms?
Most of the respondents have adopted the standard operating procedures however some have gone the extra mile by implementing more than the SOPs. Raveendran of Seljegat says the factory is sanitized 4 times in a day and toilets twice a day. Workers are required to wash hands with a mixture of Neem and turmeric ground together besides with provided soap and sanitizers before entering and leaving premises. Plus, on state govt. recommendation every employee including owners are required to drink an ayurvedic drink consisting of Ginger, Pepper and other ingredients once a week. SMI has made extensively elaborate arrangements for sanitizing the premises, untouched door operations and spraying repeated as also restricting visitors to a bare necessity. Kumar labels has also made somewhat similar arrangements both these companies have made videos of their endeavors and these are available on youtube. Many companies have staggered the production in to two shifts with same number of workers to achieve social distancing.  This does seem to offer an advantage of getting more production from a reduced workforce. Machines have been relocated wherever possible. Label India, Delhi was operating their unit on 2 floors, they added another 2 floors to attain social distancing. Collective Coffee and lunch breaks are a thing of past. Machines are kept running and workers are given time one by one for coffee, tea or meals to maintain the distancing. Obviously, this is advantageous as down time decreases.
4.       Are your employees back in full strength? If not, what percentage have re-joined?
The answer to this indicates the extent of problems of worker migration, as none of the companies have 100% workers rejoining. 50% to 80% workers have rejoined and as for office staff most companies are asking them to work from home.
5.       When do you think you will reach full production?
Most printers except one or two, all have expressed that it will take some time to come to full production. This may vary from 2 months to 4 months. The infrastructure and capacity to produce is intact with the printers but there are so many other factors that impact the return to full normalcy. Since retail is greatly impacted and lockdown has been imposed across the country, demand is down and will take time to pick up to pre-Covid levels. Added to this, the financial crunch due to the no operations in the lockdown period has hit all the value chain from suppliers to printers to print buyers impacting their cash flows. Increased capacity with reduced demand and a pile up of payables like instalments taxation and other statutory dues may further add to the woes of label printers, it thus appears that return to normalcy will be gradual.
6.       Will you work as you were before or will adopt more workflow automation and reduced workers?
The only positive side emerging from this pandemic is that printers are finding possibility of working with reduced number of workers. The realization has made all respond positively towards the imperative need for automation both in production and workflow management as some of the most expensive inputs are labour, real estate and wastages. Automation will help in reducing these.
7.       Do you think industry at large will implement better housekeeping?
Most people feel that it is a necessity in view of the spreading infection. Enlightened and progressive industrialists feel it was a need of the hour. They all agree that it will be implemented. In words of Priyata Raghavan, “Yes a cultural change is expected to bring this in.”
8.       Do you foresee expansion in this financial year?
There are printers like Mudrika, Prakash Labels and others whose new equipment ordered earlier have been installed or is in way, other than that there appears to be an emphatic no for new investments in capital equipment this financial year. However still, printers like SelJegat, Kumar Label and Mudrika feel that if they must implement workflow automation, investments in allied equipment is an imperative, they will invest wherever and whenever needed. SMI has already made substantial expansion last year. Vivek Kapoor says, “yes we will be replacing equipment with latest technology rather than expanding”. All the same, the underlying sentiment cannot be ignored that if the market dynamics demand expansion, “then why not?”
9.       Will you travel for any industry exhibitions this year?
19 out of 20 respondents said NO to this, evidently the scare of catching this deadly infection, is a big deterrent.
10.   What is your vision on the industry working in the post covid time?
All across, the general feeling is that the industry needs to change and go into introspection. Housekeeping, sanitization, automation, organized workflow and lean manufacturing will not just be words spoken at conferences but will find a new meaning for implementation even in the MSME units. Rajiv Chhatwal of Kwality says, “Post covid industry should mature more. they will invest wisely, look at reducing overheads and improve profit margins, business models will surely change.” Manish Hansoti of S Kumar says we need to learn to save and park funds for a rainy day to face such calamities. Priyata Raghavan and Shakti Jain feel that post covid also it will be digital engagement with customers and suppliers. Personal contact will be limited.  Anuj Bhargava says it will henceforth be “Digital-Digital-Digital!”. There are others, those who feel the changes are temporary. Ajay Mehta of SMI sums it, “here will be some shift in consumer pattern, economic downturns are inevitable due to lockdowns as well as due to huge loss of jobs in different segments. Having said that, lot of new opportunities are opening up. We are confident that our industry will come through very well in comparison. We see possibilities of growth of the market in coming 12 months’ time.”
11.   Will the changes coming about be permanent?
The industry in unison feels there is nothing wrong in adapting these changes that will make workplaces safe. Just one or two respondents feel that some Indians by nature would like to get back to where they started but by and large as Ajay Mehta says, “Only change is permanent.” Constantly the industry needs to bring about more changes to become more efficient leaner, productive, sustainable and safe. The changes will be permanent for all those who understand the right way forward

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi, India 1st July 2020

Printing magazine are permitted to reproduce the above article by giving due credit to author including the blog address  

Friday, May 15, 2020

Self-reliant India: Response of and options for MSME Label converters

On the 11th of May 2020 an embattled Indian Prime Minister Narendra Modi, fighting a mammoth pandemic Covid-19 on one hand and facing a dwindling economic scenario on the other, made a clarion call to the nation, calling for his countrymen to support his vision for Atma-Nirbhar Bharat or self-Reliant India. He mentioned the five pillars of Atmanirbhar Bharat as: Economy, Infrastructure, System, Vibrant Demography and Demand. A natural human response to any form of attack is to go on defense however it is dynamism and daring spirit to prompt the nation into an offensive with long term growth perception. It reminds one of what George Washington wrote in 1799, “That offensive operations, often times, is the surest, if not the only (in some cases) means of defense”. In simpler terms “offence is the best form of defense”. The five pillars of the Prime Minister’s vision of a Self-Reliant India were also explained as.

1) Economy, which brings in quantum jump and not incremental change
2) Infrastructure, which should become the identity of India
3) System, based on 21st-century technology-driven arrangements
4) Vibrant Demography, which is our source of energy for a self-reliant India and
5) Demand, whereby the strength of our demand and supply chain should be utilized to full capacity

To achieve the vision, a huge financial package is also being put in place to support and encourage the people, industry and other institutions furthering the cause.  Stressing on the imperative need for going local in mind, he stressed the “make in India” concept to escalate inherent strength of the nation. If the instilled red tapism that has prevailed in Indian bureaucratic system and has refused to die down over the years, does not create hurdles in disbursement to the beneficiaries specially the MSME sector, the large cache of technically educated English speaking manpower in democratic India can deliver the expected results. Expressing his reservations Chennai (South India) based A. Ramesh, owner of Sree Krishna Labels & Solutions Pvt. Ltd. says, “Most MSMEs will be restarting from ground zero and Govt support package has still not reached the banks and it is in the bank’s hand to decide”. This sentiment has been expressed by others as well. As for “going local” or “make in India” concept, as explained by the Indian finance minister on the following day of Prime Minister’s speech, clarifies that it does not mean that the country wishes to be in isolation. It translates into achieving freedom of dependence from global brands for everyday consumption of materials which our youth can provide if their entrepreneurial capabilities are encouraged to produce. It remains to be seen if this package is what will make the industry stand up and applaud and move on.

The Indian self-adhesive or pressure sensitive label industry is completing almost 50 years of existence. In the early years, the production was either manual or simpler and evolving technologies of that time were being used sparingly across India. It is only in the last decade that the industry has risen to global standards in installing technically advanced label printing, decorating, and converting presses comparable to the best in the world. Since most label printing companies are MSMEs, they have faced a big adverse impact of lockdown following spread of pandemic Covid-19. They are mostly family owned first generation entrepreneurs who do not have large industrial groups backing them. Now if they get the financial aid as communicated by the government, it will be difficult and long before the industry bounces back. However, at this time the support as given, is not a compensation of losses incurred by industry, Government is only giving loans that will attract interest and add to the burden of the entrepreneurs. It may be enhanced business for Banks but a burden on industry. From the difficult experience gained during this lockdown, it may still make sense to take the Prime Minister’s appeal seriously towards becoming Atmanirbhar. Surely it does not imply going into isolation shunning everything or all technology that is foreign. Surely it means we use the best capital equipment available across the world to produce end products that are largely local in content. If Indian equipment suffices the need, it should be preferred. However, the industry needs to aim and create products in their factories that are of high standards and eliminate the need for imported products.

Label industry around the country on the contrary is unhappy and distressed at government’s
LMAI President Kuldip Goel
response and decisions to sufferings they are facing and will be facing an even bigger challenge of reduced demand in coming months. The author interacted with label industry constituents in all geographical zones of India and the reaction every where was somewhat similar. Kuldip Goel, President LMAI (Label Manufacturers Association of India) said, “I don’t see any benefit in the package being offered. A Loan being given and repayable in just 4 years is not the support that MSMEs need for losses that they incurred in lockdown facing this pandemic. The instalment and interest will be huge and add to the woes of MSMEs in a burdensome time”. Leading Label stock manufacturer Ajay Mehta Managing Director of SMI Coated Products Pvt. Ltd. is also apprehensive about the losses due to the lockdown, he says, “The governments financial support package is a reflection of its policy of Atmanirbhav, the confidence it has on the Indians to be able to take things ahead, despite all the constraints, by providing funds to take care of the liquidity crunch and not delve into the compensating the losses already  made in these months, as well as what losses would be incurred in the coming months.” Manoj Kochhar of Holoflex Kolkata in the East of India feels there is no direct incentive given, the biggest hit is due to this pause in operations. The Government should have at least made the loans interest free and for longer tenure. It is not easy to deal with banks as they have ways to become selective and find loopholes to refuse or reduce support. Harish Gupta heading Sai Com Codes in Rai, district Sonepat in the Delhi NCR is quite upset at the governments package, “We have been pushed back by two years! The support package is an eyewash and joke on the industry” he says and adds, “Ask anyone if he can easily get a loan from bank, they will make you cry”. He is also worried that workers who went back home are starving and they have no support, they now wish to return but there are no means to come back. LMAI General Secretary Rajesh Nema of Pragati Global Indore in Central India expressed, “Lockdown has taught us to live our life in a simpler way. Govt's package would indeed increase liquidity in hands of entrepreneurs but the interest burden is going to be there. The Govt should have waived off interest for 3 months or at least reduced income tax to lessen the burden.” Sanjeev Sondhi of Zircon said, "Two things are killing; cash flow and manpower shortage. Government initiative looks a big puzzle if you can solve it, you may get something in the end". Accepting life as it comes Harish Gulati Managing Director Alpine Containers Jammu in the northern most part of India said, “The biggest impact of lockdown has resulted in bringing economy to its knees which is beyond any body’s imagination and taught many new lessons out of management books. The tough time is going to be a new normal for quite a long time.” With a divergent response
Raveendran Selvarajan Managing Director at Sel Jegat Printers Private Limited Sivakasi in South India states, “In present circumstances Government has made a good effort to bring about liquidity in market, If the intended support reaches the industry, it will bring buoyancy back into markets”. Summing up Jigesh Dani of Maharshi Labels, Ahmedabad western India says, “Justice delayed is justice denied!” he explains that the corona virus erupted in December 2019, government should have gone into planning to reduce stress on workers and industry, it would then have not led to migration of workers. If you look at the financial package of 20 Lakh Crores, the cost to Government is just 2500 Crores! Please see the table at the end of this article.  Even out this amount meant for them only 20-25% will reach the targeted MSMEs. A small single owner entrepreneur does not have the capability to cope up with the formalities that banks ask for and they finally get tired of pursuing and give up. By the time, the support does eventually reach some, they will be deeper in RED. If the government is earnest in supporting, then they should have transferred the monies straight into accounts…this delay is denied justice.”

To recover from this catastrophe there is need to look within and find the strength as Albert Einstein said, “Adversity introduces a man to himself.” To re-engineer your business we must adopt an operating structure of financial discipline. The adherence depends on profitability and cash flows. The production may appear to be profitable, but a negative cash flow will hamper the march toward self-reliance. Printers need to balance the inflow and outflow all the time and ensure its positive status, it may sound difficult for MSMEs but the present situation has made us realise that we have to be focused on quality customers and not quantity. The latter if not taken care of, will adversely impact your own status in terms of quality as buyers. Costing needs to be in check, for some persons this may translate into integrating backward and forward. Some big label companies may toy with the idea of producing labelstock to cut costs, but that would be counterproductive. It will be prudent to stay with core competence and keep achieving excellence in what you produce. It will also help in maintaining a focus of achieving a quantum jump. The reduction in cost must be in terms of wastages, down time, reduced human intervention, better inventory management and effective logistics. Label stock is the major part of a self-adhesive label and it involves a lot of imported papers. In an effort to localize, our Indian stock producers need to take initiative to reduce the imported content of labelstock and consider using alternative liners and indigenous face materials. They need to interact with paper mills to achieve the localization of these specialty papers. Label printers with support from Labelstock producers need to impress upon print buyers to opt for indigenously produced label materials reducing dependence on imported materials which are not really a necessity.

This leads to the need for better infrastructure and equipment which is a onetime capital investment, amortization of which is quicker as you produce in quality and quantity without wastages but if the equipment is wanting in parameters the impact of higher cost is ongoing for all jobs resulting in reduced profitability. There is now need for printers to implement automation and workflow management. Materials must move in a planned manner without hindrance in the given floor space. Equipment with highly advanced automatic registration control ensuring reduced wastage and setting time help in cost control. Order receiving from customer, approval and processing  for production, make ready (like ink preparation-plates and dies), just in time raw material ordering, final printing, converting, packing and finally logistics to dispatch all with real time targets can all be done through software. The progress of any order can be tracked by the customer, all departments concerned and logistics handlers who are involved with the process. There is virtually no need for huge inventory as materials are received just in time at allocated times and are lined up at designated presses for converting without need of extra worker moving around on shop floor reducing dependence on them. This may look expensive but as mentioned these are one-time costs that get amortised quickly as you produce more.

Systems are which make life easier for the management in label companies. May it be HRD, time management, sales/marketing, customer care, production, order tracking both inward and outward, etc. should all have pre-set systems implemented through proper software that can be accessed by whoever it pertains to with it being limited to his or her area of responsibility or concern. Successful will be those companies that are driven by systems and not by persons. This will surely leave enough time to innovate, create, network and much more to be a part of a vibrant demography.

As the economy of the country if and when it improves and there is more disposable money in hands of consumers, the demand will rise. Demand that has nosedived due to lockdown has impacted economy heavily and created a difficult situation for the label industry which has a direct link to sale of consumer products that need labels and packaging. The present boost promised by the Prime Minister is expected to bring the consumer back to the shopping arenas uplifting demand. Currently Label printers need to deliver well, quality of a label and its ability to motivate an end customer to lift it off the shelf gives a fillip to demand. It is a difficult unprecedented happening that has occurred in our lifetime and we wonder how long it will last? It is now duty of all concerned to contribute their might in bringing back normalcy, there is of course the big condition of receiving governments promised support in time with ease and not loaded with conditions.
 Written by Harveer Sahni Chairman Weldon Celloplast Ltd. New Delhi May 2020

Printing magazines may reproduce this article by giving credit to author

Thursday, April 30, 2020

"Label industry- post lockdown @covid19"

The Indian label industry has been quite resilient to market oscillations over the years. It has constantly been registering a positive CAGR (Compounded Annual Growth Rate) and attracting investment over the last two decades. Even in the time of economic slowdown or the great global recession of 2007-2009 the Indian label industry was still growing, though at a lesser rate. The investment in new label presses and equipment that were technically more advanced offering automatic registration control, faster job change overs, short web path and reduced wastages was never stopped, it may have paused for a couple of months but would bounce back. This has been primarily due to the growing demand of consumer products sale emanating from an increasing number of literate young people with gainful employment and higher disposable incomes in their hands. A large population, predominantly rural and which is second in numbers only to China has a middle class that is getting urbanized being exposed to changing lifestyles courtesy the TV channels or networks and mobile telephony is adopting the modern day global living and shopping standards. From buying essential needs from neighborhood stores in lose condition they have been shifting buying packaged commodities and consumer goods from organized retail outlets and fancy malls offering an amount of safety mentioning manufacture and expiry dates with price and product safety information. This culture has continuously provided fillip to the growing demand of consumer goods and subsequently to demand of good labels and packaging. Unfortunately, the present situation created by the spreading Covid19 virus has put everyone in a state of worry, high alert and caution.

The virus has caused colossal loss of lives around the world besides infecting millions who are fighting to recover from the effects of this life-threatening pandemic. Originating in Wuhan China the first lesson learnt to contain this virus also came from there, to curtail the spread one must resort to complete lockdown of the city. Once the fatal consequence of this fast spreading virus was witnessed in countries like Italy, Spain, Iran and many others, the Modi government in India took a timely decision to put the entire country in a state of lockdown initially for three weeks. This may have slowed down the spread to a great extent but since the danger loomed over the large population, the lock down was extended for another 3 weeks. The initial days of lockdown was like a vacation but when the reality of its impact on life at all levels of humanity became evident it has surfaced as a nightmare. On the 3rd of May 2020 when the extension of lockdown ends, we are left wondering if the lockdown will be lifted completely or partially and when life will return to normal. With Malls, airlines, transport, bus services, restaurants, markets, industry and business at large all closed, life has come to a standstill. The imagining of job losses, no revenues coming in, salaries and expenses payable for businesses and receivables for the salaried, not coming makes one sit up and wonder how will life move ahead like this?

Paruchuri family, owners of Pragati Pack Hyderabad
The impact: Most label companies are family owned and run on the rotation of funds model with extraordinarily little funds parked anywhere for such contingencies. Now with no payments coming in due to lockdown and customers having a valid reason that they are closed in a similar situation the result is evident. It has a cascading effect on the industry. The workforce consists of temporary, casual, permanent helpers, skilled and management staff. Most of lower and middle level workforce are migrants who have travelled long distances from their villages and live in rented accommodation on what they get each month getting their rations on credit from neighborhood stores. In the current scenario and no permanent solution in sight they are left with no option but to return to the safety of their homes in villages where they have roof on their heads and meagre agricultural incomes to feed them but without the fear of getting infected. Since Government directive says salaries and wages must be paid in full during lockdown label printers are in a dilemma, how to pay when no revenues are coming in. Production is stopped, receivables are not coming in, both fixed and recurring expenses are accumulating, bank instalment and interest adding on, maintenance is needed to restart, security personnel have to be in place, minimum electricity charges have to be paid, imports are attracting customs duty and incurring demurrages, all together the situation seems to be grim.

Consumer spending for the present is going to change completely and buying will be restricted to bare essentials. Visits to malls and markets or such public places will be restricted to avoid getting infected. Travel by air, rail or state roadways is virtually stopped and will be immensely hit, this will also similarly impact restaurants, cinemas, shows and events. Biggest sales of garments originate from shops in malls and dedicated markets, these are likely to be impacted adversely. Label is one item that finds usage in all business segments, may it be product labels, Garment labels, Barcode labels, Baggage tags, Automotive labels, Lubricant labels, Computer labels, etc. The garment labels that account for almost one third of the total usage of labels is likely to see a big decrease in demand. Baggage tags is another area that will hugely impacted until air travels picks up to pre-Covid 19 levels or more. With all these indicators pointing towards a shrinking demand, printers are a worried lot and for this reason they have put on hold expansion plans for the time being and at least for the current financial year we do not expect any major expansion decisions coming in. Those deals made earlier may have to be honoured and installations may happen. However still the printers would like to put on hold these deals so as to wait and watch. Since the entire supply chain is affected the resources also become limited, supplier credit may reduce on the other hand customers demand for more flexible terms will arise. The industry will be looking at government support to keep afloat.

With most travel plans shelved print shows postponed or cancelled; it is evident that this downturn will have its full impact during the current financial year which for Indian companies is up to the 31st of March 2021. Hopefully by then a vaccine has been developed and life may start returning to pre-covid state. Until then investment will remain extremely low or on hold and customer visits will also be limited, alternate business strategies will have to evolve and ways of doing business will change for good. One thing is sure that eCommerce will emerge a winner in this fight against the pandemic. People will try and order things online and receive at their doorsteps, sanitize them and use. The system may become a habit for all time and a large part of the buying will happen that way. Labels and packaging for ecommerce may also undergo change as the imperative need to tempt the buyer to pick up the product off the shelf at point of sale is not there, so embellishment that increase the price of labels and packaging can be cut for ecommerce.
The brighter side: The Pandemic is not going to last forever. The one that came over a hundred years ago was at a time when science was not that advanced, to day when the technical capabilities and research is extremely advanced it will not be long before a vaccine is invented and the world is freed of this menace. All the earlier epidemics also came and went away so we must look at things positively and wait for better days to return soon. This pandemic has brought the global opinion against China as it is believed that this was created by them, one must wait and see if there is any proof of such a thought process. Meanwhile global multinational companies have started to consider moving their international manufacturing hubs. India does look to be a preferred destination being a democratic, English speaking country with one of the largest educated and technical workforces. The Indian government needs to create conditions to make the full use of this opportunity by simplifying the entry procedures and ease of operations without unreasonable red tapism. This will attract foreign direct investment and also expand the economy and facilitate return to continued growth.

The way forward: Our label printers need to positively use this lockdown time to make strategies to revive their business, list their strength and plan to put them to effective use to grow their businesses and make it future ready. Create an entity that is resistant to external contingencies. The business must be reinvented to be system driven rather than human driven, integrated workflow automation and distant operation possibilities need to be evolved. All segments of customer service from development, planning prepress, production planning, printing, logistics, servicing and up to point of sales support need to be brought to a unified electronic platform to make it an extremely satisfying experience for the customer reducing the human involvement to minimum once an order has been initiated. In coming time dependence on online business is going to be the future. Selling via ecommerce model, creating labels from computer to either digital print or initiating the other processes will have to become the operational way in future. Printers need to keep reviewing their planning, updating themselves with latest techniques and processes. They need to create free time to make human contact with important customers when the situation warrants that also through online meetings until things are back to normal

Hugs from a friend!
Vinesh Bhimani Kimoha Dubai with author
So that we realise and feel that we are human beings and not machines or computers; Once we are back to normal do go over to your customer for a natural desire of meeting personally and giving a warm handshake plus a big hug!!!

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi India April 2020

Friday, April 24, 2020

“Who has done it?” Covid-19!

As the few days of staying at home in lockdown extend to weeks and now looks like it is going to be months, what appeared to be a small intermission in life has now started to appear a massive traumatic challenge to daily existence even to the upper middle class of the Indian society. The initial days of this pause in life went like a small vacation, spending time with family, indulging in hobbies. I have detailed some of these in an earlier blogpost. Time was being spent playing with children or grand-children, reading, surfing on the net, meditating, praying, working out at home and when the thought of business at a stand still gave rise to stress many like me busted it by trying creativity in cooking. Anuj Bhargava of Kumar labels shared his singing talent on social media. My own cousin and best buddy since childhood Mohanbir Sahni, chairman and managing director of Elofic Industries Limited, India’s largest automotive filter manufacturers, in response to my twitter/LinkedIn/blog post  which read, “Cooking seems to be the best stress buster during lockdown!” sent to me a WhatsApp message, “I agree cooking is the best stress buster…The cook inside me is getting active!” Sudhir Jain of Jain Transfer products is reading biographies of successful businessmen, Sanjeev Sondhi of Zircon Technologies, a devout follower of Lord Shiva spent a lot of time in prayers, meditation and cooking staying alone stuck at his manufacturing hub at Dehradun, LMAI President Kuldip Goel found time to reignite his passion for writing poetry, my school friend Rana Gurjeet Singh former minister Punjab and MLA Kapurthala spent time and money sanitizing his constituency, distributing food and supporting development of cost effective ventilators”. These are just a few examples of how people have used their time, but as we reach the end of the second part of lockdown; worries of time, money and business lost, looms large on our minds. Also worrisome is the fate of the workers and staff that face loss of jobs.

A growing number of organisations around the world have already started shedding jobs. Some of international Label industry equipment suppliers in Europe and USA have already cut down on the number of senior executives, especially those posted at foreign locations. It would be unethical to mention any specific names in this difficult time until the companies themselves announce. Suffering is not just from infections due to covid-19 but also from its impact on jobs and lifestyles. In India, as you go down the lower rungs of society the difficulties grow exponentially. See the plight of migrant labourers who travelled hundreds of miles away from home to make an earning to feed their families and now they are without a shelter and without food. Many of them are daily wage earners who earn during the day to have money to buy food for the next 24 hours. They also have no transport to go back to their homes in villages faraway. They cannot pay the rentals and do not know what the next day has in store for them. For those who managed to reach their homes in villages are not sure if they will be accepted back at work. Even the employers will be hesitant as they are not sure who maybe carrying some infection. At this, one is tempted to wonder, “who has done it?”

The origin of Corona virus, everyone knows is Wuhan in China, then who originated it and who brought it to India? While the western world is convinced it is China’s doing and the Chinese say it is American plans to defame them. Only time may tell the truth if it ever surfaces. Meanwhile it is obvious that the travelers are the ones who spread it inadvertently. In India it is either the foreigners travelling in or the outbound Indians returning home. Almost 3 million Indians travel out of India every month and the arrivals into India are less than a million every month making it a total of 4 million per month. If we take the total arrivals into India from January to march in 3months it should be around 12 million or 1.2 Crore people. Now is it not strange that less than 1% number has put 135 Crore Indians into problem. On the flip side, even just one percent of these travelers if infected, could have spelt havoc for the country. But then no one carries the infection intentionally. Who passed it on is not in the know of the unsuspecting traveler, one cannot really blame them? However, the timely lockdown by prime Minister Modi seems to have stemmed the fast spread to a great extent.

While the industry is still to realise the actual impact of this unprecedented occurrence, the very thought of the time ahead sends a shiver down the spine. India has been adversely impacted due to continuous changes which may have been brought about with good intentions, Demonetization, GST introduction, Slowdown and now the Lockdown due to Corona Virus. Except for essentials for survival, all spending has been on hold, trade and industry is at standstill, expenses of businesses have ticked on while earnings have vanished. Even when the lockdown is lifted it will be a very slow process and may take many months to return to normalcy. Lack of demand for fmcg and other non-essential consumer goods will impact the industry negatively. The travel trade, organized retail and restaurants will face a crisis as it will be long before people gain confidence to travel or venture out in public places. Schools are not likely to open for a few months, unemployment is likely to rise. Life must go over a complete change. However, as they say there is light at the end of the tunnel. India may appear to become the preferred manufacturing hub for the world and when things improve (may be next year) the economy may bounce back to greater heights. It would be pertinent to mention here that in view of the imperative need for social distancing ecommerce is likely to grow immensely. Instead of crowding in shops and malls, home delivered shopping with safety measures will be opted for. On a brighter note; the pollution is down, the cities are cleaner, the rivers are clean, the sky is clearer, the birds are back and chirping and the world is united in its stance against this pandemic.

Coming back to those who lose jobs and homes (due to non-affordability of rentals), life may put forward many difficult parameters. The daily wage earners or those companies who are forced to shut shop due to being unviable will be asking themselves why this happened to us for no fault of ours? Who has done it? The government has been putting some small amounts of cash in their accounts that does not cover all and moreover the amount is not enough to feed families of 4 or 5 persons. They are not sure how many will be able to return to their erstwhile jobs and whether they will be taken back or not and what precautions they have to take and whether life in cities will remain affordable here on. The poor and the worst effected will be left wondering the meaning of residual part of life, they will for sure be looking towards government for help. The constitution of India provides for a right to life. Article 21 of the constitution reads as: “No person shall be deprived of his life or personal liberty except according to a procedure established by law.” Elaborating on this the Supreme Court of India has put forth that, “The right to live includes the right to live with human dignity and all that goes along with it, viz., the bare necessities of life such as adequate nutrition, clothing and shelter over the head and facilities for reading writing and expressing oneself in diverse forms, freely moving about and mixing and mingling with fellow human beings and must include the right to basic necessities, the basic necessities of life and also the right to carry on functions and activities as constitute the bare minimum expression of human self.”
So, it is an imperative for the government to come to the rescue of the affected citizens. The lockdown is not the brainchild or imposition of business owners or the trade. It is a result of a pandemic over which neither the workers nor the business owners have any control. At this time the government needs to come to the rescue of their citizens to exercise their right to life. Each time one tries to ponder over the impact of this virus and its deadly nature that has affected millions around the world, the question that is beyond a common man’s comprehension keeps cropping up, “Who has done it?”

Written by Harveer Sahni Chairman Weldon Celloplast Limited April 2020

Print Magazines are free to reproduce this article by giving credit to the author.

Tuesday, April 14, 2020

Life of Label converters/Suppliers in Covid-19 Lockdown

One wonders if social media were not there how we could have spent these days of lockdown. WhatsApp, Facebook, Zoom, Instagram, LinkedIn, Twitter, etc. have kept the public bonded globally sharing news, jokes, experiences, hobbies and so on. With nothing else to do, businesses shut all over and an eerie silence on roads coupled with the underlying fear of an escalating spread of the deadly corona virus, time has brought the strongest economies of the world to their knees. The fear of contracting the infection that has no known vaccine has put the global population on a defensive and protective mode fearing the impact on their near and dear ones. Spending the unending days within the confines of one’s home has weighed down quite heavily on the minds and life of people. The label industry globally trying to put a brave front, stays bonded with industry peers through telephony and social media platforms. The worrying impact of this lockdown stirring at the back of their minds, they do discuss the pressures building up and that they will have to face the reality of a huge setback when they eventually open, yet trying to relax and bide their time they have taken up hobbies like cooking, singing, meditating, praying etc. Social media is packed up with pictures and posts of their creativity in the kitchen from those who probably never even boiled an egg or made a cup of tea. Anyway, it is good that they are still in the innovating mode which will help them in their mindset when back to business.

Indian label industry is mostly family owned and largely MSMEs. Most of the entrepreneurs started their label businesses as first-generation entrepreneurs at very modest scales and have gradually scaled up. These printers have a hands-on approach in running their businesses. For them it is a day to day way of reviewing and deciding on ways of operating business effectively. Many of the entrepreneurs have experience of having worked in other label companies as employees before deciding to venture out on their own and set up label manufacturing entities. They have limited resources but as mentioned due to the hands-on approach they decided on the money rotation model to work and grow. All financial outflow is dependent on their inflows each month. They have hardly any parked resources. A lockdown like the one we are experiencing could not have ever been imagined when suppliers, printers and customers were all shut and not allowed to move out of homes but the operating expenses, salaries, interest, repayment, rent and statutory dues would keep ticking on and remain payable, also attracting interest. The issues when dwelled upon stir up a storm within and then the colleagues in the industry start calling each other and association leaders in hope that they will be able to communicate with powers that be, to get financial relief to the industry. The worries are a plenty but since Label printers are locked in at home, they have been able to put their worries at rest at some point of time and then find ways to relax and make the best of their time.

LMAI president Kuldip Goel revisited his passion for writing poetry and posted his work on WhatsApp groups and Facebook to receive immense appreciation from friends. Rakesh Mahajan Joint Managing Director and the man behind all the production at the fast-growing Prakash Labels Noida was learning how to bake a cake when I called him last. 

India’s largest indigenous Labelstock producer Ajay Mehta Managing Director SMI Coated Products Mumbai has now an ardent fan his 4months old grandson Ivaan for whom he is required to sing to, otherwise too he has a busy schedule as follows:
Morning Yoga 45 minutes.
Then breakfast 20 minutes
Time with Grandson. 2 hours.
Attend to emails and WhatsApp for 3 hours.
20 minutes meditation before lunch
5.00 pm Gayatri mantra chanting with friends online for 25 minutes.
6.00 workout under guidance of daughter Nikitaa
7.00 to 8.30 Grandson time.
Dinner and some Netflix.

Sanjeev Sondhi of Dehradun headquartered Zircon Technologies got stuck at Dehradun while his family got caught in Delhi Lockdown on the day, they were to travel to join him. A firm disciple of Lord Shiva and deeply religious, he spent the first 9 days in prayers due the auspicious period of Navratri. Now since most of his senior staff are on leave due to lockdown, he spends some time managing a few things for the limited functioning of his factories and then he says besides trying his skills at cooking, he prays and does introspection of what life should be beyond labels. Until now all his time was consumed by his growing the label business. Lockdown has made him sit back and think of life in another perspective.

Ajay Agarwal of Syndicate labels Delhi says, “Meditation, Online courses, Cooking, Netflix and long hours of sleeping. Most importantly staying positive has been the hallmark of the lockdown for me”.

Manish Desai past President of LMAI and heading Mudrika Labels Mumbai says, “It is a very difficult time for all of us and for the entire economy of the world but still we have to deal with it.” He further adds, “There are mainly the following ways that I am spending my time; 1) I am giving good time to my family by playing cards/watching movies, playing games as per wishes of my parents and children. 2) I am trying to learn typing on laptop keyboard more efficiently by using both hands as one used to type on traditional typewriters, normally I type with my single finger. 3) I am very week in making PPT presentations, my daughter is teaching me how to make presentations on the laptop. 4) I have given task to my marketing people to think of new products that we can develop for the industry. 5) lastly, I am also doing physical workout for 1 hour daily.

Anuj Bhargava heading Greater Noida based Kumar Labels is spending his time enjoy leafing through old albums refreshing memories, enjoying the pollution free air, playing with children, chatting with school friends on Zoom, Cooking and Singing. Surprisingly, he shared a link where he is singing in tune without musical instruments to aid!

Mahendra Shah of Renault Paper part of Manohar Packaging Group is also staying at home and in constant touch with his factory which is catering to labels for essential supplies. He says his wife is happy that he is helping in household chores besides working out and strategizing for future of his business. Sudhir Jain of Jain Transfer Products Noida has subscribed to online channels for meditation and has now time to spare so he has been reading extensively, presently he has been reading biographies of many successful people. Rajesh Nema of Pragati Global Indore says, “No business talks these days!” he interestingly elaborates his schedule further, “After morning rituals, go for walk, cycling and pranayama (Yoga). Then watch TV serials of epics Ramayana and Mahabharat. In between and during the day I help my wife in household work like “BJP:  Bartan, Jhadu, Ponchha” (Doing dishes, sweeping and mopping)! In the evening again walk, cycling and pranayama. After dinner sit with family members for some games like Tambola, Antakshari, Quiz etc.

The Coverage would be a little wanting if despite being a part of the Indian Label industry for over 40 years I, the author of this article, do not mention my own time spent in these days of lockdown. Well I have stuck to my regime of walking 10,000 to 13000 steps each day(Now in the drive of my house), cooking also being a passion I imagine recipes and try them out to share with friends and family over Facebook and WhatsApp, the additional time that I have I am using to compile my book on “History of Indian Label Industry” and the best and most lovable part is to spend the maximum time playing with my two and half year old grandson!

Obviously Cooking seems to have been the universal stress buster and a hobby that provides opportunity to the colourful label manufacturing industry to experiment creativity of another kind. A type that delivers taste, colour and presentable plating drawing some parallel to the wonderful labels they create. They have been able to push away for the time being, the worries of how the lockdown will impact their business or future by bringing quality and constructive thoughts to their mind finding a new meaning to family bonding.

Industry in India has been facing a difficult situation in the past few years. First it was the demonetization then the switchover to GST and followed by a general slowdown, despite the issues India’s label industry maintained a double-digit growth rate which may have oscillated a few digits up and down. India is a young country having more than 45% of its population in the age group of 20-35 years of age with the median age at 27-29 years and literacy rate at over 74%. The youth is knowledgeable, well informed, resilient and has attributes with energy to put past behind and move on to recover from adversity. It is estimated that in coming years over 70% of the consumer spending will be coming from the bulging middle class that is almost 45% of the total population of 1.35 billion. Moreover, it is now gradually becoming clear that given the global need for a more democratic industrial and IT hub to produce cost effectively, India may well become the preferred destination. This is so because the availability of a huge technical and educated manpower available. The “Make in India” process will surely get a boost once we overcome the pandemic and need for materials and equipment starts picking up. The western world already appears to be looking at India for creating an alternative hub where resources, materials and technical manpower is available in abundance, additionally with an English-speaking population. It is a good sign that despite the national lockdown the mood is still not negative and God willing India will emerge strong and successful not only in fight against the Covid-19 pandemic but even turn the adverse situation to become diverse, offering opportunities to create new success stories.

Written by Harveer Sahni Chairman Weldon Celloplast Limited, New Delhi April 2020