Commercial print sector in Hyderabad losing steam?

Hyderabad’s commercial print sector is on a weak wicket, with the sector which reportedly grew around 5% last year is recorded a lower growth. “The growth is visible only in the packaging and publishing sectors,” says Ram Mohan, manager for regional sales commercial print at TechNova. There may be both, social and economic reasons. Additionally, the printing sector has not been granted industry status; thus the power tariff is paid on the domestic commercial tariff which is quite high. The associations are fighting a hard battle with the government to attain industry status.

There’s a sudden drop in the number of jobs coming from territories around Hyderabad. Introduction of GST and demonetisation meant reduced cash transaction, says Mohan.

So many jobs have cut down coming from the rural areas and people's spend on commercial activities such as brochures and leaflets have depleted. Even during elections orders for commercial print media were fewer due to government restrictions. “During the festive season too, we have not seen the shops etc opting for large big quantity printing. Orders have gone down,” said one printer.

PrintWeek India visited two commercial print companies which show that there are some in the commercial space who are doing things right and hence doing well. For example, Balaji Scan and Sphoorthi Printers, which reported good growth, only because of the virtue of producing quality jobs. The two are in the mid-segment of the commercial space. A third was Dachepalli Publishers, which has recorded a turnover of Rs 100-crore and is aiming higher.

Mohan says, “High-end job goes to big print houses, where they specialise and are equipped for end-to-end operations. But in the mid-segment, there are a number of printers vying for the jobs. The worrying part is the price war, which is why the profit margins are continually falling.”

However, there is an element of economic discipline, where the credit period is much less than some other cities which are as high as 90 to 120 days. In some cases, work in Hyderabad is delivered only against payment.

While there’s no report of any print company shutting down, there are new printers which have entered into the print arena, while the existing houses have either gone in for expansion or replaced old machines with new ones to match the industry standard.

We also understand that some big names have reportedly downscaled.  With margins falling, it is becoming tough to manage the infrastructure cost of handling print plants. “These print companies cannot offer rates offered by the competitors, medium or small. The operational cost for big printers is high.”

However, for print companies which have diversified into packaging, the impact of deficient commercial jobs may have been limited. “These print companies have their own clientele. They don't have to go to the market like others looking for jobs. The clients in fact, walk into reputed print houses with jobs,” says Mohan.

New investment and plate consumption
At least 10 new and used four- or five-colour presses have been installed in Hyderabad in the last 12 months. “Presses which are coming in are with coaters, that is the trend,” says Mohan. Why, we ask? “Because some portion of the jobs these print companies cater to is packaging,” says Mohan.

According to PrintWeek India, both the States of Andhra and Telangana put together consume around 1.8 to 2-lakh sqm plates per month. 
There are around 20 trade shops supplying plates to printers in Hyderabad. “Only one is a thermal plate supplier, and rest use a mix of plates of different makes,” says Mohan.

Earlier, thermal and violet put together, the bureaus were about 10. With the availability of the CTCP option, the number has doubled.
In terms of plates, the use of violet plates has drastically reduced. One or two are using it to serve the newspaper or book segment. CTCP technology has gained because of the plate pricing. “With additional CTCP bureaus being set up, the competition gets tough, as a result, prices come down,” says Mohan.

Digital print kit
PrintWeek India did not see much growth in the number of digital print kit among the commercial print houses. There would be around 150 digital production printing presses in Hyderabad. The big print companies have their in-house digital printers for proofing etc. “No doubt that the digital print volumes have gone up marginally, gradually taking over jobs from commercial offset print segment. But the commercial printers are also printing fewer numbers even on offset. For example, a run of 500 has become the threshold for offset now,” says Mohan.

The other is the resale value of the digital press versus offset press. “A digital press does not command a good resale value, while an offset press has a return of close to 70-75% of the original value,” says a printer.