In the first of its kind initiative and probably the first major challenge for the top ten book printers in India, global publishers were asked if they believe India can be a hub for the book industry, at the Indian Noon event held at level one of Earl’s Court, the venue for London Book Fair on 16 April.

The seed for this event was proposed during the National Book Printer’s Conference at Thiruvananthapuram in November 2011. Top book print firms such as Gopsons Papers, International Print–o–Pac, Jayant Printery, Kalajyothi Process, Lovely Offset, Manipal Technologies, MultiVista Global, Nutech Print Services, Rekha Prints, Replika Press, Repro India and Thomson Press were a part of the process.  

The two sessions at Indian Noon underscored the theme of ability, affordability and adaptability. The first session by Pramod Khera was an overview of Indian book print industry.

Khera emphasised that the interest in India as a book market has two aspects to it: the domestic market and India as an outsourcing destination for printing. “The endeavour is to make book printing industry in India a well-directed, income and profit generating industry – and capable of handling global requirements.” Khera’s presentation focussed on what makes India an “outsourcing destination for book printing”.

Khera said, the adaptability to partner global publishers is emphasised by the fact that India is the third largest consumer of English books after USA and UK and the number of books published in English is growing by 30% a year. He felt inviting publishers to explore India as a publishing destination which will lead to growth of book printing in India, Khera quoted from a CLSA report on education that said, “Market for higher education in India is projected to grow almost three times in the next ten years. Currently, the private education market in India is approximately $40 billion. It is expected to grow to $115 billion in 10 years. Indian education market consumes two billion textbooks every year.”

The presentation came to an end with an overview of the Book City concept in India, which will create an eco-system for setting up the content management and print services. According to the Book City concept, the top book print firms (with a partner in the infrastructure space) will build the infrastructure and invite content, print and related media companies and entrepreneurs to offer services and products – in a central SEZ and a domestic tariff zone.

If the first session endorsed the theme of Book City, the panel discussion that followed had leading global publishers who analysed and critiqued the Book City concept.

The panel discussion
Chaired by Dominic Mills, the group editor of  Redwood Publishing group, the panel had  David Murray, operation director of HarperCollins along with Neil Bradford, Random House divisional production director and David Hetherington Baker & Taylor VP for academic and educational merchandising and digital printing.

Dominic Mills (DML) What has been your India experience? What do you think about the concept of top Indian book print firms coming together to form a Book City?
David Hetherington (DH) We had an active relation with Indian outsourcing organisations through the excellent content management services that so many Indian companies are offering across the globe. I think Book City is wonderful if all the top Indian book printers put up a united front. Not just because of the challenges with your own industry but more so, the challenges of the publishers’ mindset who are looking at new business modules.

David Murray (DMR) My experience has been of 19 years when it comes to outsourcing to India based on a single vendor model. HarperCollins has straight manufacturing principles. We are looking for partners with service beyond printing plus everlasting efficiencies.

Neil Bradford (NB) Random House has been working with book printers from India for seven years now. Until about seven years ago we were using India as a distribution centre. It was good business where we manufactured the books in our traditional market and distributed it within India from Delhi. But it needed to be backed up by real commitment to the Indian market. So we re-worked our strategy to publishing books By Indians, For Indians, Within India. Because we felt (and probably it was); India is the most exciting and dynamic market for producing physical books at the moment. We are seeing our traditional markets being eroded by digital products but India continues to represent the most exciting physical books production marketplace. Regarding the concept of Book City, getting past the mindset of publishers will be great but it will be a change for the Indian book printers  who are stuck with a certain mindset. Whenever I see a group of suppliers in a room, it doesn’t take very long before I start shafting each other. If you keep your direction, then that will be an achievement in itself.


DML: Have you used India as a manufacturing destination and then supplied to other markets from India?
NB: Currently all of our local publishing programs are manufactured locally through our local office. We now produce a significant amount of back-end (for the local market) and a lot of our front-end production (for the Indian market) that used to be manufactured in Europe. We are utilising Indian suppliers as a base. The way it worked is: Random House India was a relatively small company when it started with eight or twelve people working for it as against forty who work for it today.
Now, we are the second largest general trade publisher within India. The objective was to assist our local production by pushing manufacturing within India for books that we produced in UK in combination of our local publishing program that I mentioned before. We had volumes that could be outsourced and so, we approached a number of Indian suppliers through tender. I spent a week in Delhi criss-crossing the city visiting suppliers and getting prices from them. We went through this exercise three to four times during that period before concluding that the Indian supplier does stand a chance.
However, the objectives changed over the years because when your volume starts to grow you start to think more about the geographical challenges of India that came across while manufacturing in Delhi and transporting it all over the country. Say for instance, the distance from Delhi to Chennai is roughly from London to Moscow. And so, we thought, why not produce books at sites closer to Moscow or Chennai in this case. At present we have chosen to concentrate most of our work with one supplier for black and white production. But we started to move our manufacturing from black and white area to colour, which led us to export work back to UK or to other capable markets. Our initial core desire was for the domestic marketplace. The Indian domestic marketplace with a population of 1.3 billion has an enormous opportunity for everyone associated with the publishing industry. The slightest increase in the percentage sale in India probably outweighs the significant number of average sales. And of course we have a major advantage of the English language being a unifying element to our whole approach.

DMR: At HarperCollins, we use India for both, to service the domestic market in India as well as to exports for our local market. So we see India as a growth market in print. Plus the thirst for knowledge and the learning language, particularly English, in India is incredible. So we have a lot of local business in print coming from India. We have our two preferred print partners from India. I think it’s good to have a healthy competition by having two instead of one preferred supplier. However, I see that the two vendors in India try to understand and cope with the demands of a complex group like ours. Because HarperCollins is a company with many divisions, and each division is like a company in its own right. Each production director has his own set of unique requirements in terms of the product and how they perceive quality. It leads to a cluster of requirements. Understanding these cluster needs and be nimble and be able to adapt, will be a challenge for the Book City model. Predominantly the print outsourcing to India is two-colour. I think there is a big gap between China and India in four-colour not only on pricing or quality but also significant investment both in terms  of equipment and the mindset of what’s acceptable to the export market.


DML: We have the first mention of the “C” word in China here. David Hetherington, what’s your view on the strengths of India versus China in this context?
DH: Each of the two countries has its own strengths. If we look at China, you are dealing with an established book manufacturing industry. The publishing community sees this as a reliable source and a no-risk destination. But if we were to turn to China and say I would like to put my IT and content outsourcing in China, that might be difficult to sell. And although English language is on the rise in China, the fluence is missing. India on the other hand has to build it from the base up  and unfortunately you have chosen a time to launch when the book industry is in the changeover process. I will speak from the US perspective with one important consideration which is that, this is not a single “book industry”. This is the “book industries”. So the sales pitch and the business value that you bring has to exist for individual marketplaces. There’s a trade market, higher education market, elementary high school market and a professional market. Each of it has different dynamics.
Last few years I have been selling print-on-demand services, once for a small printer and now on behalf of a cartel. And I must tell you that it has been a character-building experience selling print on-demand through a well-established production requirement mindsets. It is a tough road when you are dealing with people whose reason for existence is lowest possible unit cost.
 

DML: Is this the kind of thing you were talking about when you said, we must get over current mindsets and that the approach has to be at a higher level ...
DH: We have a saying that “no one ever got fired for buying IBM”. The implication was that at the time, IBM was a safe bet, a popular choice, and that one couldn’t go wrong by selecting it. Even though it’s more expensive, the fact is that it’s tried and true. I think the quality that one manufacturer delivers will spread through the industry like a wild fire. It’s a classic customer service equation. One bad experience gets magnified ten times. What each of you in India does, has an effect on the long-term viability of the Book City model. There has to be a common mindset. Success for one is success for all. Failure by one also has the possibility of translating into failure for all.


DML: DMR, you mentioned that you set up a consolidated approach when you first began in India and you went to a particular supplier. What were the strengths of that particular supplier that attracted you to the other suppliers and what were they competing against?
DMR: The exercise was created to address the cluster requirements in the traditional space. Like, with HarperCollins the decision has to go through various channels. In traditional space that takes time, effort and energy, and for the additional market we needed someone quicker and much-more nimble. With our production focus on outsourcing, we were managing 20 to 30 different vendors with specific, niche requirements in the publishing workflow. The best exercise for me was to find one vendor who was cut on time, with knowledge on inventories and efficiencies and thus strip off any duplication of efforts which happens when you have multiple vendors. And look for a partner who could leverage us by getting to the market quicker, in the traditional or additional product.


DML: Are there examples of other industries where they have managed to defray the natural competitive instinct they might have. For example in China, are people doing that? Are the suppliers under-cutting each other on price? Or any other outsourcing destination? Are they any better at that? 
DMR: Talking about HarperCollins’ principles, we look for vendors that are medium to large-sized and bring about significant investment and weight behind them. One challenge that presents itself is your spend could be effectively small for these type of organisations but you can leverage your spend as a publisher and prove it to the vendor that you are able to fulfil the objectives. More importantly you enable a supplier’s perspective whom you help with resources and develop a new product.


DML: NB, what kind of areas you thought the Indian suppliers were out performing in? Was it the price?
NB: What we need is that the “P” word is for “partners” we can grow with and not the “price”. We need organisations to understand what we do; where we would like to go; and what the suppliers need to be planning for the future. The point about supply chain is critical to our thinking. The last thing I want is warehousing worries. And I think, inevitably India offers the opportunity to miss out on some of the pitfalls. Perhaps traditional publishing has suffered from it and it can make a leap ahead. The environment at the moment is so fluid; we have the challenge of the digital products and I don’t know about the potential of digital products in India. Will people be downloading products rather than purchasing a physical product? There has to be an open mind about how things would develop.


DML: We talked about the “P” word and you very cunningly turned it to partnership rather than pricing. What does partnership mean to you?
DMR: For us partnership means reliability, stability, honouring the price agreed upon, commitment to annual turnovers, invest and scale in equipment when necessary with long term vision of fulfilling customer requirements. When you have a partner like that, you tend to get continued improvement. Fishing for best price never leads to a fruitful partnership.

DH: If service becomes a commodity, the publishing industry will get into trouble. When I say commodity I refer to orange juice packs which are traded everyday at different prices. Partnership for me would mean at least three years of arrangements with the Indian book printers. Where, there is a commitment on the side of both parties to invest time and resources for sustaining and further building the relationship. The most important thing for both parties is to understand how the business is done in India and how the business is done with the publishing industry’s customers and what life is like at both ends. Full and frank exchange of what can go wrong leads to anticipation.There are some companies who know how to do it well. In United States, John Wiley does it very well, Pearson does it very well, Oxford University Press does it very well. So there are real models present put there which can be emulated for the foundation of success.


DML: What else apart from emulating the successful models do you think will be key to the success of Book City?
DH: I think extending the very strong relationship that has been developed between international book publishers and the Indian content management industry is probably the first thing I would opt for. If you could learn from that the chances of Book City as a success is imminent. The stronger this alliance between the content management service providers, the stronger will become the publishers’ faith in Book City. (A quote by David Hetherington in an article that he had written for Business Weekly: “the business process outsourcing (BPO) of publishing services is a growth business, forecast to reach $1.2 billion in 2012  – including outsourcing for book, magazine and newspaper publishing – with 60% of these revenues being directed to Indian providers.”)


DML: One area that the Book City will focus on is content creation. Do you think India has possibilities in the content creation area?
DMR: We have already started moving in that direction. Seeing that India speaks the same language, a level of creating a content for say a dictionary. I think there is an opportunity to create content among a lot of content management service providers.

NB: Definitely yes. Whenever I have travelled to India visiting the suppliers, everyone has great entrepreneurial spirit and  enormous intelligence and adaptability. But I would say it is necessary that the Indian book printers restrain their natural enthusiasm to want to do everything for that particular publisher. Instead they should try to focus on more specific areas where perhaps the goals are more defined. Although Book City can de-clutter the actual ability to do everything and fulfil the desire which is not completely possible for a single service provider.


DML: What would you be looking for in your partner in the area of digitisation?
DMR: If we as publishers don’t digitise the content, we will be out of business. Book City initiative will need to have a balanced module of digitising the content as well as traditional printing. If something of this magnitude has to be set up, the Indian book printers will have to have the necessary resources and the skill set to do. Let’s face it. The digital content has already made huge inroads into the traditional form of printing. I do not see any reason why it wouldn’t be the same for India. What we as book publishers are looking for is someone, probably a Book City which can provide a complete all-round solution beginning with the creation of content, ability to digitise it with a simultaneous ability to offer traditional print in the form of web, sheetfed or digital (depending upon the volumes). It would be interesting to see where the focus of the Book City lies as a business module. If you can have a setup of this magnitude and if it has to be successful, the important thing would be the target markets, product offerings and dealings with publishers. Fundamentally, the Book City will have to be more than just offering print.


DML: Do you think Book City is an actual possibility?
NB: Yes, if the central and state Government extends its support through training, tax abatement, SEZ and then back it up by a continuous grand presence at book fairs be it Frankfurt, London, Bologna and so on.

DMR: I would look at Book City as a concept of great minds combining to find a solution. The overall objective of combining scales will have to be closely looked upon by each before it is setup.

DH: Fundamentally it will have to be feasible not only from the process point of view but also from the economics point of view. All that the Indian book printers, who are part of the Book City, would need is one success story. This will become an iron-clad endorsement for this business model.