Rajhans: A print super power among equals

Ramu Ramanathan: Legend has it that you started working at the age of 16 ...

A Balachandra: Rajhans started operations in 1977 with a letterpress. I started working when I was 16 years old, immediately after completing SSC. After SSC, I joined a three year diploma course in printing technology. Classes were held for three hours. After my classes, I used to work. The course provided knowledge about letterpress technology and a bit of offset technology in the final year. Those days, our college had a single-colour HMT offset machine and we gained practical knowledge by working on it. It was due to sheer hard work that we have developed this business in the past 35 years.

 

Ramu Ramanathan: When did you decide to take the leap into the offset business?

A Balachandra: When we started the business there were only two printers who rendered four-colour jobs. There was a huge opportunity for jobs like visiting cards, bill books and vouchers. We used to outsource four-colour jobs to Mangala Process. In 1983, we decided to purchase an offset machine and invested in a Solna four-colour imported Japanese printing machine. Previously all four-colour printing jobs for packaging in Karnataka were outsourced to Sivakasi. The clients had no other option but to wait for a few days to get a job printed. And so, in 1984 we decided to print all the four-colour jobs using Solna. That’s how print jobs started flowing in, we used to convert 10-12 tonnes on one machine in a day. The profit earned was huge and we invested in our second four-colour. This was perhaps the first of its kind double-demy printing press in Bengaluru. 

 

Ramu Ramanathan: Days of innocence?

A Balachandra: Yes, but the tragedy is, the printing rates have remained the same for products such as posters, pamphlets even after all these years.

 

Ramu Ramanathan: Why has the rate remained the same? And as an industry, why are we not able to accrue money for the quality of products we provide?

A Balachandra: There is fierce competition and print firms are available at every nook and corner. As a result, profit margins have shrunk. Between 1985–1990, the profit margins were huge. Also, there were not many printers available and customers were not quality conscious. I recall, government elections, were a great money churner as there was no other option available other than print media for the all-India campaigns and advertisements.  After the 1989 election, we purchased a heatset commercial machine from Japan and the 120 feet machine was lying at our warehouse for about two years since we did not have the knowledge to install and use the machine.

 

Ramu Ramanathan: When did you start using the heatset press; and which was the first job, you printed on it?

A Balachandra: After two years, we decided to gain more knowledge about the machine. So we visited Thomson Press to see the actual working of a heatset machine. Later, we sent engineers to Japan for training. Finally the machine was functional and we bagged our first job from Prajavani for their newspaper supplement. The next major breakthrough was with Deccan Herald and both used to outsource their print requirements from Chennai. The Chennai firm used to offer 578mm cut-off size and timelines were 7-8 days to receive the print. We offered them a cut-off size of 546mm which proved to be cost-effective and saved wastage and turn-around time. Prajavani and Deccan Herald have been instrumental in our success – and this relationship has been fortified.

 

Ramu Ramanathan: How did you convince publishers and groups like The Times of India (TOI)  who are quite strict and stringent about their quality audits and press standardisation?

A Balachandra: After we started procuring jobs from reputed organisations, we started investing in brand new machines and investing in new technologies. Most publishers are particular about quantity, quality and time which is not easy to match using a second-hand machine due to maintenance issues. With the old machines it would have not been possible to bag titles from publishing groups – and print the glossies

 

Ramu Ramanathan: When did you decide to invest in new machines rather than second-hand machines?

A Balachandra: Initially except for Tata Press and Thomson Press, there were no major printers catering to the publication industry. But Tata and Thomson had their in-house magazines which were keeping them busy. Also, publishers were seeking good printers. The magazine publishing industry was growing. It was a difficult period for time-bound weekly and monthly magazines. Hence we took a risk and bought a brand new machine to cater to the publication segment. The good news was, within one year we achieved break-even. Then as you know, we purchased three brand new heatset machines. 

 

Ramu Ramanathan: Who has been instrumental for the Rajhans business?

A Balachandra: Clients like Prajavanvi and TOI have helped us immensely in our growth and have supported us throughout our journey. Within the group it’s only our hard work that has helped us to grow our business.

 

Ramu Ramanathan: But then, most Indian printers are hard working. Who had the future vision about high quality printing and the fact that it would play a pivotal role in the magazine industry?

A Balachandra: I travelled across all the major metros to understand the publishing industry. In those days, most publishers were based in Mumbai. The feedback from the publishers was that the service and quality provided by the printers in Mumbai was poor. Also, the price charged, and wastage percentage was high. The inflow of all magazine jobs used to be during the end of the month for their publishing in the first week of every month. After understanding the requirements of publishers, we invested in two machines, each with 546mm and 578mm cut-offs to cater to this segment effectively. Today, we print 45 titles for monthly magazines and six titles for weekly.

 

Ramu Ramanathan: I’ve seen you work at Rajhans. And seen your personal involvement. How do you manage when there is a small correction in jobs as there are so many persons handling the print jobs at multiple stages?

A Balachandra: Communication is our strength. When there is any requirement of quotes, or delivery queries, a publisher has to wait for 2-3 days. At Rajhans, we make sure that publishers get their queries for quotes plus production schedule within minutes. There is only single person who interfaces between the production department and publisher; this helps us to handle a job efficiently.

 

Ramu Ramanathan: With so many titles and variety of print jobs, how do you exercise control on jobs and plan inventory?

A Balachandra: I always see to it that an inventory for three month is planned. I insist that the support from suppliers is top priority. We import papers from major paper players but due to the fluctuation in dollar prices, we are losing out on huge amount of money. Hence, we have a six month contract with all our clients for pricing. We have many warehouses and we make sure that all kinds of stocks are available with us. You can ask for any size, grammage and reel-width, at Rajhans we have it. No other printer in India maintains such huge stocks. This helps us in leveraging our prices in terms of input cost.

 

Ramu Ramanathan: How many Rajhans units are there in Rajajinagar; and how do these units cater to different segments?

A Balachandra: We have nine units in Rajajinagar, Bengaluru covering 90,000 sq/ft area. We cater to seven titles for national newspapers. To cater to the newspaper segment effectively, each title is printed on a different machine to avoid brand-clashes or overlap on timelines. Hence, there are five units dedicated to the newspaper segment. There are two units catering to packaging industry and we convert 20-30 tonnes of paper daily. And finally, there are two commercial units to cater to all the magazine titles.

 

Ramu Ramanathan: Most printers in India find it difficult to manage a single press, how do you manage all the nine units plus a unit at Devangere and Coimbatore?

A Balachandra: Earlier, right from working on press, to maintenance and delivery of the jobs, were handled by me, personally. Now we have an efficient team in place that fulfils their jobs. Also, it was a logical decision to set-up a plant in Devangere as it is centrally located in Karnataka. A single unit in Devangere can cater to nine districts.

 

Ramu Ramanathan: Please let us know about your decision to set up a new plant at Coimbatore, Chennai, Madurai?

A Balachandra: The Times of India was looking out for a printer to cater to them in South India and approached us. We have signed a five- year contract with TOI and have set up the unit to cater to the newspaper industry in Tamil Nadu. The plant is spread across 35,000 sq/ft and has a Highline-45 with six towers, two folders and one heatset press. Now, we have two units in Tamil Nadu.

 

Ramu Ramanathan: In lieu of the existing growth patterns, is there a possibility that Rajhans will set up a new facility in North India?

A Balachandra: I believe the system of working is very different in North India as compared to South. Here in South India we have good control as we can manage things personally. One of the main reasons why we are not interested in setting up a new plant in North India is we have been investing in a new press since thirty years. Now in 2013, the investment will be huge. We will not be able to justify our spending; since cost of capital is very expensive these days.

 

Ramu Ramanathan: Is it easy to set up a print unit in India?

A Balachandra: It is very difficult to set up a new unit. You have to be very good in purchase and payment collections. Also, support from customers, suppliers and labour is a key factor in this business. 

 

Ramu Ramanathan: You are very critical of top printing companies in India spending money on marketing etc. Can you tell us about your marketing strategy and cost-effective methods?

A Balachandra: When you consider the top print firms in the magazine space in India, all are professionally run companies. When you consider such companies there are administration and management expenses which run into lakhs. Here at Rajhans, I personally work for 12-13 hours. This means, we don’t have a different person for purchase, marketing etc. More importantly, each department functions efficiently. When you consider the costing sheets of all the other companies, the pricing is similar when compared to us. The profit earned by other companies shrinks after all the expenses incurred in marketing and other activities. Our response time is two minutes whereas the response time of the professionally run company is a minimum of two days. This was a major reason why major publishers trust us with their jobs.

 

Ramu Ramanathan: And yet, Rajhans is there where it matters. For example you were present at the Indian Magazine Congress and were one of the main sponsors of the event; plus you had a stall? Your comment.

A Balachandra: As you know we don’t spend on marketing but we are always present at the right time at the right place. We fulfil all the requirements of the publishers on time and once people do business with us they don’t leave us. I feel marketing does not serve our purpose. Speaking about the Indian Magazine Congress, we have seven international titles with us and so we decided to sponsor the event. We have got good feedback from the show and it generated many leads. I believe this kind of B2B networking helps.

 

Ramu Ramanathan: Where do you see mainstream magazine business trending? Are the numbers increasing or is the trend towards digital?

A Balachandra: In our country considering the population and the quantities required, it is very difficult for digital to grow. There is quite a lot of tattle and talk about everyone going digital. In my view, from 1999 to 2013, I have not seen any decrease in quantity of books or newspapers. Consider The Times of India; till 2005 the order quantity from Rajhans was low. Presently quantity has multiplied manifold. The numbers that we print speaks for itself. Here in India if you consider niche magazines, the minimum order quantity is 15,000 copies. This is expected to grow. So the future requirement is huge. I get emails and calls from MNCs and corporates, who  want to publish their own magazine and catalogue so that their products can be read in detail. I believe, print is here to stay.

 

Ramu Ramanathan: You are one of the biggest converters for Agarbatti cartons. What are your future plans?

A Balachandra: I started my career with packaging and I have two dedicated units for this purpose. But we have reduced the amount of materials that is converted.

 

Ramu Ramanathan: What is the tonnage you convert?

A Balachandra: Presently, we convert 30 tonnes of board daily. The quantity has reduced because the profit margin is very low in packaging. My theory is, you can sustain profitability in packaging only if you have the capacity to purchase the raw material in cash.

Ramu Ramanathan: You had mentioned about standardisation and calibration older machines. What kind of technical audits are you performing?

A Balachandra: We do our audits with the help of our technology partner, Kodak. Plus we have appointed a dedicated tech-expert who has worked in Germany. This tech-expert helps us with the machine maintenance.

 

Ramu Ramanathan: Yours is a classic rag to riches story. The risks you have taken and the investments you have made boggles my mind ...

A Balachandra: I have made investment in machines like no other printer has dared to do. I have purchased four brand new heatsets, five four- and five-colour sheetfed presses and ten web coldset presses. There are 15 CTP systems installed. Today, we have the highest consumption of plates and ink in our country. Other than newspaper units, we have the highest consumption rate and deploy 22,000 plates in a month. Due to such high quantities, we leverage the price offered to us .

 

Ramu Ramanathan: It is very difficult to find good workers these days. How does Rajhans manage them?

A Balachandra: There are 400 employees who have stayed with my organisation for more than 20-30 years. They are my trump cards and take care of the operations. I know each and every one by their name and the jobs on which they are working on. We provide incentives like three meal a day, sponsor their children’s education, free health check-up, insurance along with various other perks.

 

Ramu Ramanathan: Your advice to the next-gen at Rajhans?

A Balachandra: At Rajhans, the second generation has joined the team. Ashwath is working on purchase, production planning etc. Plus my son Akash looks into production and accounts. There is a proper division of responsibilities. My advice is: One should have good control over production and accounting in an organisation; otherwise they can lose everything. Younger generation has the support and strong foundation. But they must learn to make good use of it.

 

Ramu Ramanathan: Why have you been so low-key ?

A Balachandra: We have always concentrated on our work. I believe, our work speaks for itself.

 

Ramu Ramanathan: You are strong in three segments. Are there any plans for consolidation in these segments?

A Balachandra: I plan to enter into a new business vertical in a few years. Now my children will be the backbone – and they will support our business. Look at any large printer, after 20-25 years there has been a downfall. I have seen this repeating itself since the past 30 years. 

 

Ramu Ramanathan: What is your feedback about the Bengaluru print industry?

A Balachandra: As compared to other cities, Bengaluru is doing okay business; not very great. The year before and the current year was a difficult period for printers due to the slowdown but I believe things will improve. This is a cosmopolitan city and is a major hub of IT and boasts of MNCs so there is demand for print media and stationery. Also, Bengaluru is much cheaper when compared to cities like Mumbai or Delhi.

 

Ramu Ramanathan: Why has Rajajinagar become a printing hub with more than 80 printers in the vicinity?

A Balachandra: The main reason is that it is well connected to all major roads, rail and airports. We have our own labour colony. There are no labour union problems and no power issues. All paper suppliers and vendors are close by and there is no danger of flooding during the monsoon.

 

Ramu Ramanathan: What are the initiatives undertaken by you for the printers located nearby?

A Balachandra: I make sure that cleanliness is maintained in the surrounding and I dedicate two hours daily for this purpose. If you take a walk around the unit and the vicinity, you will find the surroundings clean and neat. We make sure that no one gets bullied by local political goons who ask for money on pretext of festivals and other reasons. 

 

Ramu Ramanathan: Can you enlighten us more about your dream project – TOPTEC?

A Balachandra: TOPTEC is the training centre of the Karnataka Offset Printers Association (KOPA). We have our funds in place to provide proper training for the printers. We want to give total support for all the printers’ right from technical support, purchase of raw materials, details on second-hand machines. All kinds of data required by the printers will be available at TOPTEC. 

 

Ramu Ramanathan: In terms of a training programme you had mentioned that you are planning to appoint a dedicated person to oversee the workings of printers?

A Balachandra: From the next month, I am planning to invest two hours from my schedule and personally supervise various activities of TOPTEC like start-up services to ensure a smooth implementation.

 

Ramu Ramanathan: In your case it is almost like a one man show – how do you manage to keep track of things?

A Balachandra: Initially we have worked hard like dogs ... with no proper sleep, food etc. I recall my brother cycling to work and carrying loads of printed jobs. Even today, the thinking and habit and style of functioning remains the same. I still work along with most of workers on actual print production. The main thing is, in spite of all the hardships we have still managed to succeed.

 

Ramu Ramanathan: If you have a magic wand what is the one thing that you would like to change?

A Balachandra: I would like to hope, there is no more price war in this industry.