Pratham Technologies: Not so big, but perfectly formed - The Noel D'Cunha Sunday Column

PrintWeek (PW): Pratham started operations in 1988 in Pune. Why did you name the venture Pratham and how have you built your manufacturing capabilities over the last 33 years? 
Datta Deshpande (DD): We started in 1988 as Pacific Technologies, with partner Sanjay Dandekar. The partnership transformed into a private limited company in 2000, with a new company name, Pratham Technologies.
Pratham means number one. By the time we gave this new name to our company, we were already dominating the market for insert folding machines in India. By keeping pace with new developments, adopting new technologies, and introducing new products, we are still there at that top spot in India.

PW: Manufacturing has to be the backbone of any equipment making company. What was yours?
DD: It certainly was and still is. We did invest in our own tool room set-up, even as we strategically focused on our design, assembly and marketing right from the beginning. We still continue with the same strategy.
Continuously improving our products, developing new features, and adapting to new technologies are our strengths. We have capitalised on them in the last three decades to become a global brand for pharmaceutical leaflet folders.

PW: What have been the major milestones in this journey?
DD: Participating in Drupa in 2004 was a major milestone for us. It changed our perspective totally from a national player to an international player. During that process, we upgraded our designs, brought organisational discipline; inspired our team to think global, which helped us for a long time and still helps us.

PW: Breakthroughs any?
DD: Entering into outserts folding machines in 2018. Till then, we only sold products up to eight or ten folds.
Now, with the new introduction of outserts range, we offer machines of various widths from four-folds up to 24 folds. Since 2018, we have sold more than 45 outsert machines and accessories worldwide.

PW: Have you moved into a new plant?
DD: Yes, it’s a plant built to an international standard on a 44,000 sqm site. It will enable us to grow ten times our present annual turnover of Rs 43-crore (approx USD 6-million). We are also launching new products in paper folding print finish and pharmaceutical packaging machines having global standards.

PW: When you launched the small folding machine for pharmaceutical leaflet folding, what were the trends in pharma then? Has there been any change in those trends now, considering the changed scenario?
DD: We launched a small table-top four-fold folder in 1992 in India. At that time, the pharma printing industry was much unorganised, as printers used to give folding work to the small contractors who are not aware of quality standards. Apart from the delays in supply, printers used to face quality and wastage issues plus the requirement of a hygienic work environment. As options were limited, we could generate pretty good business at that time.

PW: Was folding seen as a value-added business in those days?
DD: Printers preferred to get the folded leaflets from contractors, but they started insisting on having our machine. Many folding contractors minted money by using our machines.

PW: What trend are you seeing now in the folding sector?
DD: The new trend among the printers is to have the facility in-house, with faster pile feeders. Plus automation features, and vision inspection systems. Today, customers don’t hesitate to buy more expensive machines for better performance and durability.  I am happy to share that the pharmaceutical companies insist printers have Pratham folding machines before giving them work. That is really a great reward for us for our long-term dedicated hard work in this field.

Deshpande (r) and Sanjay Dandekar, partner and chief technical officer at Pratham

PW: Your tagline is “World-class from India”. What do you mean by this line?
DD: It’s a one-line mission that has driven us so far and will drive us in the future, too. It means, world-class product, services, infrastructure, people, and systems from India. Whatever we do, whatever we produce, has to be world-class. There are no two ways about it.

PW: Did you collaborate with any international company to develop products that are at par with the best in the world? Which kit from an international competitor is your benchmark product?
DD: So far, we haven’t collaborated with any international company. But all our products are indigenously developed and fully made in India. We use the best-in- class parts such as rollers, vision systems, vacuum pumps, and gluing systems, all made in Germany to keep our product’s quality at par with our international competitors.

However, we have always looked up to and learned from our competitors – GUK, Heidelberg, and H&H. Now, after three decades, we have our own distinguished patented features, which are the best in the world. We set
our own benchmarks now.

PW: The pandemic months saw packaging companies upgrade their post-press platforms and enhance their production lines with an additional kit in order to meet the demand. Has Pratham benefitted from these investments made by packaging companies? Can you explain the extent?
DD: Yes, and this was the scene all over the world. Unfortunately, due to our limited production capacity, we couldn’t fulfill the requirements of our customers. We saw a surge in orders from all over the world such as USA, Canada, UK, Spain, Israel, Greece, and Australia. Now we have a bigger set-up with a much higher production capacity and can cater to all the challenges.

PW: One of your key products is in the insert folding segment, which you started in the early nineties. How has it panned for Pratham? What’s your market share today, in India and worldwide? 
DD: We didn’t have any competition for insert folding machines when we started in the nineties. Now, there are few local players who are focusing on low-cost machines. However, that market has shifted towards good quality, higher versions of folding machines with a lot of automation involved in it. Here these local players can’t compete with Pratham.

The other players are the German or Japanese manufacturers. As we have kept on investing in newer technologies and made them available at rational prices, we have built strong goodwill with our customers. So Indian customers didn’t move away from us and are loyal to brand Pratham. With this, we are still holding a majority of the market share in this particular market segment in India.

PW: Which are your strongholds in the global market?
DD: Apart from India, our strongholds are countries in Africa and Asia, and Egypt. But we have to still establish ourselves in the European and American printing industry. Now with the new set-up, we will explore every corner of the world.

PW: You are one of the Indian manufacturers to participate in Drupa. Can you share your Drupa experience? How has the participation helped Pratham’s business, in terms of understanding the potential of different segments/markets and products development?
DD: We participated in Drupa in 2004 for the first time. We again participated in 2008. The first participation was a major game-changer for us. It changed the whole perspective of our business. We also received huge recognition in India and our customers started looking at us as organised global brand. However, in 2008 we had the same products to show. So, it was good enough for us to show that we are there and growing.

However, after 2008 we realised that it is better to participate in the local smaller exhibitions in other countries, where you get better visibility. So we used that budget for participating in Kenya, China, Bangladesh, Nigeria, and Egypt. It helped us more in terms of getting local dealers and new customers.

This year we had planned to participate in Drupa 2020 and had booked a larger booth. But due to the pandemic, all our dreams vanished. The Virtual Drupa was not such an encouraging experience.

PW: Despite the success in pharma leaflet folding, you have not diversified much in other segments, isn’t it?
DD: We did. We tried entering in new business segments, but couldn’t succeed.

PW: Why?
DD: Between 2000 and 2002, we started making shrink wrap machines. But soon we realised that it’s too competitive and the price was the deciding factor for getting business. Shrink film traders were interested in selling films and were offering machines at throwaway prices. So we exited from that business as we didn’t have our strengths in trading.

PW: Your flexo and inspection system experiments also failed? What did you learn?
DD: In 2010, we dared to enter in the manufacturing of flexo printing machines, but soon realised that it’s not our cup of tea.
In 2013, we launched carton inspection systems where we had software from one of the pioneers in the world named Vision Experts from Germany. We installed few early systems and then the company Vision Experts got merged with the other company – Isra Vision. The earlier people left the company as a result, we were unable to support our customers. This made us exit from that business. Developing such complex software in such a short time was not possible at all.

But we learned a lot from our experiences – that we should stick to our area of expertise, which is print finish business.

PW: How much has the patenting of outsert folding technology impacted Pratham’s product development and your market? What is the status right now?
DD: Outsert making method was first invented in the USA and got patented way back in 1993. It was protected by patent for 20 years from other players to develop and sell these machines.
Before we entered this market, we had thoroughly studied the worldwide patents for outserts machines and made sure that we are not infringing any of the claims of these patents.

Now we have our own globally registered patents for the innovations in making outserts. So we and our customers are 100% safe from any infringements of patents.

PW: Besides price, what are the main reasons for which customers should buy your machines?
DD: Price-wise we will always have a competitive edge. Besides the price, engineering innovation is our backbone, but we also make huge efforts to achieve the quality of our products right from the part level to the finished products. Every product dispatched is thoroughly tested and we don’t allow the product to be dispatched before our quality department releases it.

PW: It’s been a tough 18 months. Has Pratham been spared?
DD: We had never faced problems on the orders front, but we had faced a lot of trouble on the manufacturing side. Almost half of our previous financial year’s sales came from the last quarter. We had plans to move to our new premises in June 2020, which finally happened in January 2021. It was formally inaugurated on 1 September  2021, our 33rd anniversary.

PW: Were your supplies affected, both inwards and outwards?
DD: Many of our suppliers were unable to supply in time. Transport costs and international freight rose. For many orders, we had to bear the increase to keep our relations. The machines were dispatched in other countries just before the pandemic got stuck without installations. No one could do anything.

Sales and service people couldn’t travel much. But we had no options. However, these challenges made us develop habits to work remotely using internet technologies.

Team Pratham at the newly-built 44,000 sqm plant in Pune on 1 September 2021 

PW: What have you been telling your customers?
DD: Customers understand the situation and they, too, are helpless. So with the vaccinations done, I hope we will come out of this situation soon – and the business will be regular.

PW: What are your current challenges and what is your strategy to overcome these challenges?
DD: Since the last financial year through the current financial we have focused on building our capacity and capabilities to become a scalable business. Among them are implementing ERP, CRM software, establishing new quality management systems, adopting the Theory of Constraints (TOC) among others. This should be over by this September end.

We will keep on expanding our global footprint for inserts and outserts folding machines and will establish ourselves as a major global player in this product range within the next three years. While doing this we will explore the pharmaceutical packaging market as well as other print finish solutions.

Last year, we achieved a turnover of Rs 43-crore. In the next five years, we are looking at a ten-fold revenue jump from at least two to three strategic business lines.

PW: You haven’t, but would you look to diversify if there’s an opportunity, say, for a joint venture?
DD: We are open to collaborations or joint ventures if such an opportunity comes from reputed multinational companies. However, we don’t have such proposals in hand at present.

PW: A lot of emphasis has been placed on sustainability. What has been Pratham’s drive towards helping its customers move towards sustainability?
DD: Build, capitalise, and sustain is the sequence you have to follow for sustainability. ‘Build’ is establishing new markets, new products, new systems, new capabilities, and capitalise is to use them to grow business. Then the growth is to be sustained by increasing throughput, cutting costs, using processes. This cycle is repeated again and again to grow the business.

Our products help increase the throughput as folding is the major bottleneck in the supply of printed leaflets. Also, your investment remains lower compared with the German products.

Our printers can look for the exports market, too. This will help to get better margins and good payment terms. However, you need to invest in good infrastructure, systems and software, to attract global customers.

Team Pratham at the newly-built 44,000 sqm plant in Pune on 1 September 2021 

PW: The Dandekars and Deshpandes are equal stakeholders in Pratham. Is your next generation involved in the business to take it to the next level? Any Pratham blueprint?
DD: My son Varad has already joined the business as director of operations. He completed his MBA from HEC University in Paris. He is working on building the strong operations of our company so that we can deliver our machines faster than our competitors worldwide.

We are also working to strengthen our corporate management systems, which will separate business processes from operations. It will reduce the dependency of business operations on the family members.