Dubious data undermines clout of print-packaging industry
On 18 August 2017, the Government of India (specifically the Ministry of Finance) issued a clarification about the tax payers who have been post-demonetisation (8 November 2016).
The problem was: four different numbers being quoted by the Prime Minister (56 lakh), the Finance Minister (91 lakh), the Economic Survey (5.4 lakh) of India and the Central Board of Direct Taxes (33 lakh, the number shared in the Rajya Sabha).
01 Sep 2017 | 8062 Views | By Noel D'Cunha
Noel D'Cunha, PrintWeek India
Needless to state this data maze has been confusing and perplexing.
Something similar has been unfolding with the data presentations about the print industry. Various bodies have been making presentations, and at times PPT#1 does not tally with PPT#2. And both PPT#1 and PPT#2 have nothing in common with PPT#3.
The big issue is: Do Indian print and packaging factories and companies benefit from government initiatives. The answer is a resounding no.
Our industry receives no direct investment from the government; and this is a serious roadblock. It creates a problem: No industry status, lack of direct investment, long credit cycles, direct cost increases, and lack of lobbying in the corridors of power are identified as the other challenges to the industry.
During the GST Council presentations over the past three months, the government officials have asked the industry representative, what’s the per capita consumption of board, paper, ink, plates, etc? Numbers were not shared. (Please note: I have crunched some data in the box item below. But these are “guesstimates”).
The moot question is how do you peg the size of the industry? And more importantly, who foots the bill to publish an all encompassing report?
Today, the stakes are high. If we have to defend our industry status, there should be one custodian for all data. Instead of investing in a genuine pan India data survey, we tend to make over simplistic apples-with-apples comparison. This means different numbers are uttered by industry leaders in different forums.
Today, the numbers stack up in our favour. The idea to use data correctly in order to justify the clout of the industry. Many people say this is not do-able.
I don’t think so.
In October 2015 the India Book Market Report was released by Nielsen during the Frankfurt Book Fair. At that time, the value of the print book market in India, including book imports, was pegged at USD 3.9 billion.
I recall two things had transpired. One: The India Book Market Report put the compound annual growth rate of the market at 20.4% between 2011–12 and 2014–15. And two, it said there were 9,000 publishers in India, a sharp difference from what has so far been cited by industry bodies, which was 19,000 publishers.
That report was commissioned by the Association of Publishers in India and the Federation of Indian Publishers, with seed funding of Rs 50 lakh (USD 77,000), has relied on a variety of data points to compute the size and shape of the market and consumer behaviour. The study derives from BookScandata, interviews and online surveys with over 100 industry stakeholders, as well as 2,000 consumers representing the urban population aged 18+. Select respondents further validated research findings. At a price-tag of Rs 66,000 / USD 1,000, the India Book Market Report is the first such, and much awaited, study to help understand the complex Indian publishing industry.
That’s the point isn’t it? Data does not come cheap.
Paper and ink data - at a glance
The paper consumption in India is approximately 15 million tonnes per annum (TPA). By 2024-25, under the baseline scenario, domestic consumption is projected to rise to 23.5 million TPA and production to 22.0 million TPA.
The paper mills association and the paper traders bodies say about “1 million TPA of integrated pulp, paper and paperboard capacity is required to get created in India on an annual basis over the current capacity to meet the growing demand.”
Such investments in the paper industry would create a multiplier effect on the economy through gross capital formation of Rs 8,500 crore every year, direct employment to 15,000 people every year and further giving additional livelihoods of 72 million man days per year (for people involved in agro/ farm forestry).
Curiously enough, the imports of paper and paperboard, excluding newsprint, into India have been steadily increasing. In the last five years, imports have risen at a CAGR of 15.5% in value terms (from Rs 3,411 crore in 2010-11 to Rs 7,014 crore in 2015-16), and 15.8% in volume terms (from 0.54 million tonne in 2010-11 to 1.11 million tonne in 2015-16). Imports are growing at a very high rate as compared to the increase in domestic production rate.
Meanwhile the estimated market for printing ink and coating is said to be around 2,60,000 tonnes per annum.
Of this, the offset is approximately 1,40,000 tonnes, with web offset taking a little more than 50% of the share at about 80,000 tonnes. Liquid ink is estimated to be 90,000 tonnes, while metal inks are 14,000 tonnes, screen and special inks at 12,000 tonnes and UV/aqueous inks at 10,000 tonnes.
If we calculate average rates of sheetfed ink to be Rs 230 per can of a kilo, a web to be Rs 120 per kilo, and liquid inks to be Rs 180 per kilo, then the total ink market can be estimated to be Rs 4,500 to Rs 5,000-crore.
Of the Rs 4,500- to Rs 5,000–crore ink market, Sakata’s share would be around Rs 600-crore, Hubergroup India’s 1,000-crore, DIC Rs 800-crore, Seigwerk Rs 500-crore, Flint Rs 250-crore, Toyo Rs 165-crore and others Rs 1,500-crore.
Just to provide a perspective, the printing market in China is estimated to be USD 150-billion. In 2014, the twenty top Chinese printing ink companies produced approximately 377,000 tonnes of ink in 2014, which is half of the total ink output in China.
Again, the estimates of the size of the Asian region’s printing ink industry vary. But PrintWeek India’s numbers indicate that for the Asia-Pacific market is worth approximately USD 5-billion, with Japan boasting of the largest portion at USD 2-billion and India at USD 750-million.