During a recent interaction with The Packman, Ramakrishna Karanth, CEO, Siegwerk India, said that Siegwerk had seen significant growth in its business in India during the past five years, in addition to the growth in its export business. However, he shared that the continued peak in RM prices would adversely hamper the industry, and an immediate challenge is to manage the supply chain continuity to ensure the availability of inks to customers and remain healthy in these difficult times.
Mahan Hazarika: What is the impact of the pandemic on the ink industry? How have you coped with it?
Ramakrishna Karanth: With lockdowns across the states and people compelled to stay indoors for a prolonged period, it is but obvious that the FMCG industry has taken a hit since the second wave of the pandemic. As per the available information, the FMCG market shrank for two consecutive months in April and May, and consumer sentiment has seen a deterioration, which in turn has impacted the packaging industry and ink industry.
However, to a large extent, we have been insulated from the adverse impacts primarily due to the continued good operations of most of our customers and their needs for the product lines that we offer, including many of the special value-added products. This has allowed us to maintain our share of business with our customers. In addition, steep deterioration in demand for certain segments like ice cream and white goods have been adequately made up by the surge in export orders, and this has helped us to maintain our business in a healthy situation.
Mahan Hazarika: What does the next year look like?
Ramakrishna Karanth: Over the last six months, we have been seeing a major crisis, possibly the worst in the last decade for the inks industry, on raw material pricing and availability front. The price of most of the inputs of inks and coatings are at all-time high levels, which has adversely impacted the profitability of the ink industry. Despite remaining high for a prolonged period, the prices do not seem to see any softening yet. Such continued peak in RM prices is definitely going to hamper the industry adversely. An immediate challenge is to manage the supply chain continuity to ensure the availability of inks to our customers, protect our top and bottom lines, and remain healthy in these difficult times.
On the other hand, with less than average per capita consumption of packaging material even in comparison with the world average, and with a significant gap in comparison with developed countries, the Indian packaging industry is expected to see substantial growth during the next few years, which will help us in our growth plans for the years ahead. In addition, with the regulatory norms related to food packaging getting more stringent, during the year ahead, we see significant traction to the growth of our inks and coatings portfolio, which are fully compliant and are food and pharma safe.
Mahan Hazarika: What are your future plans in India?
Ramakrishna Karanth: We have seen significant growth in our business in India during the past five years, in addition to the growth in our export business. Successful commissioning of our new blending center in Bangladesh earlier this year has released an additional capacity of 1,800 tonnes per year at our Bhiwadi operations, which we have already effectively filled in with our domestic and export orders. Further to this, our new capacity expansion project at Bhiwadi will be operational this year and add another 13,000 TPA to our production capacity. With our focus on safe inks system, circular economy and sustainability, and with the continuous introduction of new portfolio of inks and coatings to support this vision, we aim to consolidate our position as a provider of technologically superior and product safety compliant ink systems of choice to our discerning customers and brand owners.
Mahan Hazarika: What are the kinds of inks and coatings that Siegwerk has the most success in?
Ramakrishna Karanth: Our product range comprises safe ink systems that effectively serve the needs of our customers, brand owners and the end consumers while making no compromise on the safety and compliance aspects. We operate across all the packaging segments, like flexible printing (for both gravure and flexo printing application), sheetfed offset printing, narrow web flexo printing for labels and sleeves, water-based inks and coatings for liquid food packaging segment, food services and corrugated industry.
Mahan Hazarika: What are some of the latest product developments at Siegwerk?
Ramakrishna Karanth: We have been operating in the toluene-free segment of inks by choice, well before the toluene ban was being contemplated in India. Today, our toluene-free inks for the flexible packaging segment are a force to reckon with, and we have seen steep growth in this segment. The recent launch of mineral oil-free ink systems in the sheetfed inks segment and LED inks for narrow web flexo printing and sheetfed offset printing are also generating keen interest in these segments. We have been setting up ‘My Digital Ink Room’ at customer premises which significantly reduces the involvement of specialized people at customer premises for handling the inks stocks and color matching and eliminates manual intervention in stocks keeping, monitoring and inventory control. Our recent launch of ‘Customer Portal’ and ‘Track and Trace’ systems have improved transparency, reduced the uncertainty in the supply chain and logistics, and has resulted in improved information flow.
Mahan Hazarika: How has the printing/packaging ink market evolved in the last five years in India?
Ramakrishna Karanth: The printing and packaging segment, and in turn the inks segment for packaging, has been on the growth path in India for more than 30 years now. Inks and coatings have been seeing a transformation over the last five years, with an increased focus on sustainability and product compliance aspects. A large number of medium and small-sized players, mainly domestic family-run businesses, have a major presence in the packaging manufacturing industry in India.
With hardly any entry barrier to the business of packaging, today, every packaging player – whether small or big – wants to create a differentiated presence and hence are looking for technologically superior products in addition to the everyday needs of quality, consistent supplies, and economic viability, which in turn has driven the evolution of inks industry. This has also helped us to grow with our technology-led approach with a necessary support system like process management support, application technology, and ink rooms at customer premises. Our ‘Digitalization’ drive has helped in improved transparency and offers the customers a reliable flow of information. Further, a strong focus on circular economy and sustainability will likely re-define the inks business over the next decade.