The prolonged catch-up: The Noel D'cunha Sunday Column

This new low has been admitted by the three German and three Japanese manufacturers who have been struggling because of weak industry confidence in a slowing economy as well as high borrowing cost and currency fluctuations.

In spite of the poor run, Heidelberg has notched up a healthy number of 321 units in the packaging segment (past five years). The German manufacturer reported a net profit of USD 5.6 million (approximate), which according to the company, has followed after five years of losses.

Komori has had a solid year. It saw sales in Mumbai and Pune. The Komori Enthrone 429 at Vijas Digital, Mangal Paper Mart, Image Production, a LS 632 + coater at Pratiroop Mudran and a HUV press at Viraj.

In 2014, KBA delivered a double-digit increase in sales and order intake. A slide of 20% in domestic sales, as a result of fewer web offset press deliveries raised the export level. The company, in a statement, said that indications that demand is gradually picking up can be seen predominantly in the south of Europe  – and Asia which jumped from 23.2% to 30.4%.

Some of the big ticket installs in India were at TCPL (two KBA Rapida RA 106 – a six plus coater with a combi UV + aqueous); Parksons Packaging (two KBA Rapida RA 105 – a six plus coater with a combi UV + aqueous); and Indian first eight-colour press at ITC. This is the KBA Rapida RA 106; and a conventional KBA press at Sai Packaging in Bengaluru.

The thumb rule in India is: 90% of the machines are secondhand imported. 

Source: PrintWeek India Survey based on import data

Printers and their demands
Now Kamal Chopra and NIPA are making a representation to the Government of India. Chopra says: "You may be knowing that the representation of IPAMA for banning the import of printing and allied machinery is under consideration with the Government of India and I am going to oppose it under the banner of NIPA."

The arguments are two-fold.

One.

Indian sheetfed manufacturers do not manufacture machine which are capable of quality and speeds of Japanese or German press.

Manufacturing sheetfed machines is complex. Process colours are applied one after the other in an offset press, comprising of printing unit and printing plate. This demands stability and precision.  Manugraph had managed it with Shiva. So did Autoprint with Colt and the latest offering Dion. But these examples are too few and far between. Manugraph discontinued the production of sheetfed presses, while Autoprint is reaching out to entry-level enterprises.

Two.

Print CEOs are bothered that the Indian Government has stopped EPCG procedure on used machines. They feel it is 'regressive' considering 90 percent of the machines are used. Most print CEOs believe that a good 5-7 year old machine can make a packaging converter much more competitive.

Another cause of concern among print CEOs is the high duty structures (those not in excise have to write off the whole amount). Printers feel the Government must protect local manufacturers but not those machines which India doesn't make like a six- or seven-colour plus coater sheetfed machines. 

The Indian manufacturer strikes back
PrintWeek India organised a roundtable discussion with printing machine manufacturers in Faridabad. The top six comments were:

Unlimited import of pre-owned sheetfed printing presses is the biggest hurdle. Faridabad has been experiencing a slowdown in terms of demand over last few years. The number of Indian manufacturers for single-colour offset presses were more than 50; now it is a handful.

At least 5,000 pre-owned printing presses are being imported every year in the country and if we could ban these machines, then Indian manufacturers have huge scope. When we produce in bulk, then we can opt for better technologies and equipment. Printers ask for our brand new machines at the price of a second-hand, imported machine; how will we manufacture a quality machine?

The number has reduced to three to four, as far as sheetfed printing presses manufacturers are concerned. Around 80% of the local manufacturers were copying other machines. Most of them did not have technical background. Because of the local competition we could not hike the price of the machines. Slowly the gap between input and output costs had been increased and all of us started to dig a deep well by selling at a low price and giving a long credit period to the customers.

The Government of India (GOI) must help us like the Chinese government helps their printers. Even if you do not ban the import of secondhand machines in one go, it can be phased out slowly. It will definitely improve the quality and standard of Indian manufacturing.

The major issue with the pre-owned kit is that they come into the country as scrap. If the machine is sold at actual price with a CA certificate then the problems will be solved.

The basic requirements of the industry must be improved, like power supply and roads; then our production cost will be controlled. In summer, the power supply is only 25% of the total capacity.

Are we ready?
Yes, there is a huge difference in quality standards.

And yet, in web offset press segment, India is the largest manufacturer of single width coldset machines with players like Manugraph, The Printers House, J Mahabeer, K K Printing etc. India's TechNova is a top player in PS and CTP plates.

Likewise over the last five years, many Indian paper companies opted for modernisation and expansion. In 2013, ITC started a new machine and Emami ordered for a new board machine. Also, Tamil Nadu Paper Limited set aside a sum of Rs 1,200 crores for further expansion and The West Coast Paper Mills Limited is planning to install a state-of-the-art machine. Besides, Rainbow Papers has invested in a board machine, which is expected to start in 2014.

Also, India has an edge in screen print and UV kit with Grafica and APL and UV Graphic Technologies; plus perfect binding machines with companies like Welbound.

In all this there is the big picture. Indian paper consumption is projected to increase to 16.5 million tonnes in 2016-17; and reach 25.3 million tonnes in 2026-27.

Are we ready?