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Mahan Hazarika: What according to you is the most disruptive technology in the label industry right now?
Harveer Sahni: Digital printing is now recognized as the most disruptive technology in the printing field. But it cannot be a standalone future ever – all forms of printing technologies will coexist. It may be noted that digital printing has already been able to register continuous growth with a faster CAGR than other technologies in different places across the world.
Different printing technologies are now possible on the same equipment. Screen printing re-emerged in label printing machines with rotary screens, where high deposition of color is needed. Gravure printing is also now a part of a label printing press where metallic inks are to be printed. Today presses are available with flexo, offset, gravure, digital and screen printing inline on the same press along with decorating and finishing like varnishing, lamination, embossing/debossing, diecutting, waste matrix removal, slitting sheeting in a single pass. The label presses have further evolved to have multi-substrate printing and converting capabilities. They are now capable of handling from films of 12-micron thickness to thick boards. These equipment are now able to produce a wide range of end products like labels, flexible packaging, shrink sleeves, lamitubes and folding cartons.
Mahan Hazarika: How do you envision the growth of label printing and converting equipment in India?
Harveer Sahni: 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 based on my experience and time spent in the industry, I can safely put it across that 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 machines), 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 backward 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, according to my 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 unorganized sector, they have to date installed more than 150 adhesive coating lines in the country. While Jandu asserts that its coaters run at 100 meters per minute, but for a realistic estimation their speed with downtime 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 was done with base consumption that most in the industry had agreed at 0.25 square meters in the year 2003. Applying a year-on-year growth rate of just 10%, in 2018 we crossed the 1 square meter per capita usage. The above estimation is my personal estimation only, many of the industry peers may not agree with this estimation – yet it appears that we have come a long way in the last 20 years.
Mahan Hazarika: In India, label companies are primarily family-run businesses. Are these companies facing any challenges in transitioning their businesses to the next generations?
Harveer Sahni: This is exactly what is happening in Europe today. European label companies are either struggling with the challenge of transitioning into the next generation or the dilemma of whether they should continue their business. In India, though fortunately, the situation is not rampant yet, it cannot be ignored. With more and more members of the next generation showing a lack of interest in their family businesses, the Indian label industry may soon need to think of transitioning from a family company to a corporate family to avoid a Europe-like crisis.
However, there are many good examples in India where young generations have come up and taken forward their businesses. And they are doing extremely well. For instance, Any Graphics is a very good example. Today, its new generation has joined the business and is performing quite well. The business model they have put in place is a very efficient and forward-looking one.
I would say, the hope is not lost. There are still good and efficient new generations in the country who can run their family business quite well.