SMI Labels and Packaging Materials

Friday, January 29, 2021

A landlord’s journey into a world of labels

In just about 15 years of inception Barcom Limited based in Vasai (formerly and alternatively known as Bassein during Portuguese rule) a historical place and an important city in Mumbai's western suburbs, reached the stature of being one of the leading label manufacturing companies in India with an impressive client base consisting of leading brands of FMCG, Pharma, Liquor and Lube oils. Prasanna Sahu promoter of Barcom belongs to a family of landlords with substantial rental income based in Cuttack, the former capital of Odisha (formerly Orissa), an eastern Indian state on the Bay of Bengal, which is known for its tribal cultures and its many ancient Hindu temples. Odisha is an Agrarian State. Almost 70 per cent population of the State are dependent on agriculture resulting in low per capita income in the farm sector. Prasanna did his initial schooling and college in Cuttack and then completed his engineering from Basaveshwar Engineering College, (Karnataka University, Dharwad). Prasanna was not interested to sedentary lifestyle living on just rental income as a landlord, the entrepreneurial urge was there in him. In 1998 as a result of campus placement he joined AIWA, the consumer electronics company in Baroda as a process head for music systems. Three years down the line in the year 2001 Prasanna was yearning to move  from Baroda and do something different. With his brother-in-law who was then the Vice President in Sun Pharma, a leading Indian Pharmaceuticals company, he moved to Mumbai.

He started to outsource labels and selling to customers. The success led him to setup his maiden startup venture Barcom Industries Limited in the year 2002 with a used four colour Mark Andy 830 label press. Prasanna had no experience in printing, he is proud to say that he is a self-trained person. The old 4 colour press had a limitation of colours yet he would not say no to any customer who needed a job that was more than 4 colours and whenever it became necessary, he would outsource the labels for his customers. Such was his passion to succeed and excel that in 2006 Barcom invested in their first new machine a Mark Andy Scout. After their first big order of 10-12 Lakh labels from a chemical company they have not looked back. Prasanna’s passion for achieving a pinnacle made him move on at a rapid pace. There was no stopping as the company kept adding a new Label printing machine and complimentary equipment almost every year thereafter.

Prasanna with author
Talking of challenges in the way, Prasanna reminisces that in the earlier days imported rotary dies for short runs were not available quickly enough and for short runs they were using  servo driven flatbed die-cutting machines, dies for which could be made locally within a day. Unfortunately, while running a job for a very important customer they got stuck because of defect in the servo drive of the machine. There was no way they could stop work and tell the customer about delay; it would have cost them a very precious customer. To address the problem, they rushed an employee by air to Bangalore where the servo drive was available and return by next available flight so that the customer’s supply is not delayed. Right from almost their inception they have worked on two ten hour shifts whether they had orders or not. This was to create a pressure on selling because the expense in running the plant is ticking and a steady flow of orders is an imperative. How else can one grow he feels, he asserts that a label printer starts to make money only if he operates on 2 shift basis. Even then the return on investment is 5 years. They have invested in proper shopfloor setup to work in a clean room environment as they cater to the pharma segment as well. It is another thing that now most big companies insist on such practices and want the vendors to be responsible manufacturers. They have invested to conform to all governmental compliances and are now an ISO certified company.

Prasanna is only one from his family of 3 brothers and 3 sisters besides their parents, who is now living in Mumbai, the rest of the family stays in Cuttack. He has been married for the last 14 years; his wife Sangeeta Sahu is a home maker. Over the years he has also diversified into other businesses that include an architectural glass processing unit for glass used in large buildings and airports. He also has a Mahindra certified service station. Covid-19 has left a vacuum in the past year, but they are steadily bouncing back to normalcy. Looking at future, they have decided that when things improve post COVID-19, they will plan further expansion with a new unit in Odisha and finally expand to have multi location presence. As per Prasanna, India still has a lot of scope in labels, “we are doing only 50% of what comes our way” he states. In fact, with regards to adopting new technologies they already have digital printing capabilities after installing a Digital Label press 3 years back. However, he feels that even though digital printing is the future yet presently digital inks are too costly and are a deterrent but with increased indulgence the prices will become affordable and surely when the time is appropriate Barcom will invest in more advanced Digital printing equipment or Hybrid equipment to gainfully employ usage of diverse printing technologies. Presently in Barcom, Prasanna has another partner Keshav Karapurkar, as Director in the company.

Barcom has been continuously registering a growth rate more than 15% for past many years. The whole unit is in a single premise in Vasai, working from a shopfloor area admeasuring 32000 square feet and 210 strong work force. As mentioned earlier they have been adding a press almost every year but have had to pause last year because of the pandemic and now they need to wait for the situation to get back to normal before they expand more. They have capabilities to print flexo, screen and digital with a fleet of 10 label presses (Two with Rotary Screen), 2 digital printing machines, one offline screen-printing machine, 9 slitter rewinders with inspection and a long list of allied equipment. They are confident about returning to positive  robust growth as Prasanna says there is still a huge segment of wet glue labels that is existing, providing room for switching over to Self Adhesive Labels and furthering the growth in this segment. He is definite that in 5 years he will be able to double the turnover of Barcom. He has the financial capabilities to invest in new expansion, new businesses and new technologies to cater to the needs of an elite client base that he has developed over the years.

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi January 2021

Tuesday, January 12, 2021

Labels industry bouncing back to normalcy!

When the way printing world changed due to the impact of widespread proliferation of internet, the printers specially those into commercial printing producing catalogues, brochures, leaflets and posters saw a downslide adversely affecting their businesses. Books and magazines also witnessed a slowdown for some time but fortunately due to customer preferences for print, the demand in this segment became somewhat stable. Many printing companies changed course and moved to other printed products or went in for digital printing to cater to very short run demands of customers and augment their revenues. There were others who saw the growth in packaging, since in a big country with a large population the essential needs would always keep growing and packaging for the consumer goods would also see an upsurge in demand. Over the last few years, we have witnessed a gradual and steady move by the printing fraternity into packaging. According to the Indian Institute of Packaging, consumption of packaging in India increased 200% in the past decade, from 4.3 kgs per person per annum to 8.6 kgs. The industry is expected to reach US$ 204.81 billion by 2025 from US$ 50.5 billion in 2019 growing at 26.7% annually. Labels being the face of any package are an important but miniscule part of the large packaging industry also registering a robust double digit growth over the years. Due to the innovations needed and being undertaken by label printers the industry has already attracted talent and investment to create labels that help generate better demand and sale due to the aesthetics which labels deliver to the products that adorn them. 

The onslaught of Covid-19 and its rapid spread crossing all global borders to become a pandemic lead to lockdowns that brought the world to an almost standstill. Like most industries label industry also was left dumbfounded and wondering about the future. With no work, no revenues and cashflows coming to a halt, jobs were being lost, worker migration started adding to the woes of the industry. The essential needs of a suffering population had to be taken care of, after the initial couple of weeks government allowed those catering to food, pharma and essential supplies to start production. There seemed to be rush of new business coming out of the emergent need for sanitizers and therefore labels and packaging for them. Since these industries needed labels and packaging, a substantial part of printers were back to work. The Indian label industry consists of largely family managed MSME units with limited access to borrowed capital, the lockdown brought with it unprecedented financial hardships and stress. As the world started to live with the reality that for the time being the pandemic was a way of life, with utmost caution the industry started limping back to work and salvage the loss due to the long closure and lack of revenues. By end of the difficult year 2020 the label industry started showing the resilience that it has, by getting back to normalcy. The author travelled to many printers in the North and Mumbai in the West of India to assess the situation; the industry seems to have bounced back to normal working though with and underlying financial stress. Some of expressions of the printers are listed below;

Amar Chhajed, President Huhtamaki PPL Mumbai: “Yes the working is back to normal and we have grown” expressed Amar.

Anil Namugade with his new HP Indigo

Anil Namugade, Managing Director Trigon Digital Mumbai:
They have moved to a large new premises, installed another wider format roll form HP Indigo for labels, flexible packaging, etc. Anil says, “We have eyes on big achievements and we are on way to fulfilment of our aspirations”.

Himanshu Kapur, Director J K Fine Prints Pvt. Ltd. Mumbai: Though they are working to capacity yet Himanshu says, “ It is not as usual and we need to move with caution.” New investment are on hold and they prefer to wait and watch. Consolidation is their preference at this time.

Sandeep Zaveri, Managing Director Total Print Solutions: Sandeep says that the initial days of lockdown were very challenging as worker were not there and at times he himself had to operate the press. The lockdown and after has taught lessons to work with less. They have in place management systems and are implementing workflow and process automation to achieve more with reduced strength. Sandeep Zaveri says “Orders are there as usual or more and we are at almost normal working however we have to be very cautious with credit sale as financial duress is evident everywhere.”

With Vidur & Vivek

Vivek Kapoor, Managing Director Creative Labels Mumbai: They are another example that prove the normalcy, as new investments have been made to augment capacity. Vivek says there is no dearth of business. His young son Vidur is finishing college and has started coming to factory for the interim period before proceeding for higher studies. They have ambitious plans to scale up production.

With Manish Desai

Manish Desai, Director Mudrika Labels Mumbai:
“We are not only back to normalcy but have also registered growth but 5-7% growth is not worth a mention. Only when we return to double digit rate of growing, we feel the growth is evident.” He further adds that the present situation warrants to implement strict financial control and restrict further sale to people who delay payments.”

With Kapil, Aditya and Aditya's father 

Kapil Vaidya and Aditya Ojha Partners Sonic Solutions Vasai:
“We are fully booked and working to capacity!” says Kapil while Aditya nods in affirmation. They plan to wait until the vaccines bring relief to a suffering mankind, before indulging in expansion. They are confident that the industry is back to normal working.

With Prasanna

Prasanna Sahu, Director Barcom Industries Limited Vasai: With ten label presses, a digital press and a host of allied equipment Prasanna says, “We are operating only 2 shifts presently owing to caution. Financial stress is evident in market and suppliers have started restricting supplies in case of delayed payment. We have maintained a strict financial discipline and that is the reason we are comfortable.” Regarding expansion he says we have run out of space at present premises and will wait for the effects of pandemic to recede before considering expansion.”

Ajay Mehta

Ajay Mehta, Managing Director SMI Coated products Mumbai: “We have been working right through except for the first few days of lockdown and capacity utilization is back to earlier levels, our team has handled the affairs very efficiently”.

Sudhir Jain, Managing Director Jain Transfer Pvt. Ltd. Mumbai: “If we talk of monthly sales, it is normal but as regards annual sales, we still have 3 more months of the financial year. This has been a difficult year. By November sales had come up to normal levels”. Sudhir is normally very conservative with his expressions yet he says we have already invested in a new factory and will consolidate our position for this year.

Deepanshu Goel

Deepanshu Goel Managing Director Creative Graphic Solutions Pvt. Ltd. Noida:
Making polymer plates for the label and packaging industry Deepanshu still feels the working of the industry is erratic. It was almost normal in November but December was not really what was expected, this maybe because of financial stress aggravated due to year ending of some multinationals plus the tax and repayment to banks that were deferred due to pandemic causing monetary tightness.

With Kuldip Goel

Kuldip Goel Managing Director Any Graphics Pvt. Ltd. Noida: Kuldip and his son Naveen are hardworking positive minded entrepreneurs. As per Kuldip, “We are back to normal, our new factory of 250,000 square feet is also in full construction mode. We have used the time for development and creating innovation in labels and packaging. Financial discipline helped us tide over the difficult times and we have three months more in the current financial year that ends 31st of March 2021, we are keeping our fingers crossed to end it on a positive note.”

Raveendran, Director Seljegat Sivakasi: “Business is good and all is well” says Raveendran. They remain indulged in upgradation of their business all around. They are making investments in building, capital equipment and new technologies!

The suppliers to the industry have realized the underlying lack of financial liquidity in the industry and have tightened the strings of their money bags. During the lockdown and the period following has been difficult but passed by using savings and the moratorium or additional finance by the banks. Now when it is time to repay loan installments, interest, pending salaries, personal and sale related taxes, cash flows have reduced bringing shortfalls in working capital requirements. All this does hinder the free growth but a resilient label industry is fighting back bravely to normalcy with hope that the vaccines will bring an end to the pandemic and life returns to safety and normal functioning. We do hope the ensuing days will bring more news of fresh investments and installations which are the real indicators of normalcy and growth. The process has begun as we know that many deals are in way indicating “labels industry bouncing back to normalcy”.

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