Inking a dexterous business operation - The Noel D'cunha Sunday Column

We all know that printing ink is a major component of a printed job, and though it accounts for only 3% to 5% of the expenditure, it can make or break a job. So my colleague, Tanvi Parekh, and I decided to meet the Sathayes of United Inks, Dhananjay and Gaurav, and find out the journey of this company, which was once a dominant force in the Indian printing aren“It’s not an old fashioned battle for dominance now. Whoever brings the product and services that suits the print customers, is the best,” say the Sathayes.

This made us think about the characteristics of success necessary for such business to succeed. So here are some of the lessons on how to be an Indian manufacturer, think big and grow the business.

First it needed the business knowledge of making inks and resins that it could scale. True, it was a patriotic decision in 1939 that Dhananjay’s grandfather took – a stand against serving the British, when he established United Inks, manufacturing oil-based products like varnishes, phenyls, double boiled old, etc. later moving to producing single-colour inks, predominantly black.

United got a partner in UK-based Ault & Wibort, which manufactured inks and resins, combining its knowledge repository to strengthen its ink-making activity. It was a moon shot.

“We pioneered and specialised in the production of metallic inks like gold and silver inks,” says Dhananjay. By 1973, offset printing primarily sheetfed, started to spread in India.

After Dhananjay’s return from UK, where he did completed post-graduation studies in printing ink technology at the London School of Printing, the company addressed this trend and launched its first four-colour ink set in 1975. Vakil & Sons, a top printer then, was the first to approve the set. Thomson Press too procured supplies from United.

The ink set became popular. The company added production capacity. And by 1977, the company crossed the Rs 1-crore annual sales figure. It could not have done it if they hadn’t scaled up.

A strategy to combat competition. When United were faced competition from MNC’s of the ink world made their foray into the Indian printing industry, it had to find ways to combat them. It overhauled portfolio, introduced customised products, developed a service approach. United did this all under one banner. “We reposition ourselves from a dominant market leader to a niche and speciality manufacturer with products aligned to the customers’ requirement,” says Gaurav.

Partner with your customers. Few manage business communicating over emails. You need to build relationship by meeting them, talking to them about their needs. partnering with them.

United does this with the help  of various initiatives – shade development in ink kitchens and matching centres, customisation of inks for best machine performance; tweaking inks to suit the particular inks to suite the particular type of water type and machine conditions etc. “With our repositioning, we have a natural advantage over bulk players,” says Gaurav.

Be authentic, honest, realistic and build a reputation of being an expert. People are smart enough to work you out if you don’t know what you are talking about. United works on developing new products at all the three centres, where it has an R&D unit, where research on speciality, security and UV-curable inks are done.

To a question on price war and squeezing margins, Gaurav had this to say. “Honestly, for a printer, ink constitutes only 3–5% of the production cost. So how does selling ink at a lower price, say less by 10%, make any difference to the printer’s life? I would rather take a premium of 10% by delving into the means by which I can help him improve margins on overall revenue by 5%. For example, when we propose to provide brand protection, we do tie-up with the printer’s client, where required, and develop a unique product or design, such that the value chain benefits. The outcome is three-fold, we add value, build loyalty and increase margins; at the end of which, everyone prospers.”

Be selective and exclusive. For many successful businesses, less produces more. Increasing costs is one of the biggest pain-points facing the ink industry. Wild fluctuations in raw material pricing right from pigment, resins, oils, etc and efficiencies in procurement through scale need to be balanced on a regular basis for the customers benefit. “We have adopted a dynamic pricing policy to address this issue.

The lowest price of a four-colour ink set for webfed is Rs 550–800 basic, and that for sheetfed it is between Rs 800–1600 basic, depending on the quality level, and it can go up to Rs 3000 too,” says Gaurav.

Provide service and support. Little things matter. One of the most effective way to market is to service that matter. “We focus on a printer’s applications, focussed markets and type of jobs, rather than just asking him about his equipment and consumption. We would like to move a step forward and collaborate in a way that his success results in our sale. It may include suggesting the right kind of substrates, the perfect ink sets, and special elements / anti-counterfeiting features, among others, all within his budget constraints, or a slight justified increase,” says Gaurav.

So, a fair price, a great product and providing any kind of customisation within that product line, is what United is keen to offer. “Wherever possible we will impact the printer’s margins positively. We believe customisation helps him build and maintain his market share.”

It’s no secret. Building a successful business is not reserved for big MNCs. “For the Indian industry, anything foreign is always better. I hope the faith in an Indian company and brand gets stronger each day,” says Dhananjay.

Gaurav agrees, “It gives us a sense of pride, of being titled as the only Indian player, but it also feels lonely at the same time. I would like a lot more Indian companies to give the MNCs a tough fight. Even though the belief prevails that imported is better, one should know that these products are manufactured right here. Some of the materials that these MNCs use are also local, as they cannot afford to import the raw materials. And, beyond a point, there is only a bit of difference on the technological front that can exist between a good ink and a good ink. If you cannot provide a certain minimum level of quality, you are bound to be out of the market.”

Nothing that United Inks does is extra-ordinary. But by the account above, it presents itself to the customers in an honest and friendly manner and offer unique solutions. “That’s our success,” say the Sathayes.

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