Will LMAI galvanise label business in the country ...

Kudos and congratulations on being elected president of Label Manufacturers Association of India (LMAI)? What was the first thing you did when you got the news? 
I thanked the LMAI board for reposing confidence in me. Also, I took the blessings of my parents.

What was the first thing on your agenda?
Build a team of young and energetic people, ensure having regular interaction with the members and work towards empowering them with technical and business building knowledge.

Update about the LMAI conference. The last LMAI conference was held in July 2019 in Kochi. When is the next?
As soon as we are declared safe enough to host the event. So, from my estimate, if everything goes well, most probably next year.

What is your plan for the next 12 months?
There are a number of initiatives that LMAI will be embarking on. First is hosting a series of webinars under the theme – Knowledge:  accelerated growth, for owners, promoters, senior management personnel of LMAI member companies. The first in the series was hosted on 30 October 2021, which discussed how frequent increases in paper and label prices have been adversely impacting the printing and packaging industry in recent times.

What else?
A programme called – Learn and improve, which is aimed at helping shop floor personnel of the member companies. There’s membership development and of course, tackling sustainability vis-a-vis new regulations.

Going forward?
Going forward, we are planning to hold a few physical seminars and the LMAI award function, but they are subject to improvement in the Covid-19 situation.

You said, sustainability. What are the plans to tackle gaps in sustainability?
We need to identify the top performance indicators that signify how green an operation is. Recently, I saw a poll by PrintWeek/WhatPackaging? which asked a question: How Green Is Your Factory? Have you invested in it? with options – chilling plant, LED lights, sewage treatment plants, and waste management.

Yes.
There are more indicators which need to be identified, and we hope to do it.

What would add as your top indicators, besides the above parameters by PrintWeek/WhatPackaging?
Look at the percentage of material used. What percentage is recycled input materials and how much is water recycled and reused.

Tough time to be a president - what with the second wave of Covid and the deaths and the medical emergency. Has LMAI organised any support for beleaguered label manufacturers families?  
LMAI members collectively imported oxygen concentrators and distributed them free to patients and hospitals throughout India. LMAI members also distributed free medicines and arranged hospital beds for many patients all over.

There is huge uncertainty about the cost of raw material and freight costs. How are LMAI members coping?
The pandemic has seen a tremendous requirement for labels – an increase in volumes. However, there were challenges too, in terms of labour, accessibility to raw material and deliverable logistics. We are discussing with the fraternity and empowering them with the ways and means to cope with the same through knowledge sharing webinars.

Do you think prices will, in all likelihood, normalise to an earlier price level? What if they do not? Why have the prices of almost all types of label stock tripled - and when will the situation be normal?
Price levels will not normalise to earlier levels as the fuel costs, logistics, container crises, currency fluctuations, power issues, and China’s manufacturing crisis, are taking their toll.

Tough then?
If the prices do stabilise, the business will be better. But this continuous change and uncertainties in raw material prices, is not helping anyone.

Is it true that the speculators are taking advantage of the unprecedented circumstances leading to the worst impact on the price?
In any situation, you always have a set of people taking advantage of the situation.

Who is representing the label industry to the government to address all challenges - shipping, containers, label stock, power to begin with?
The LMAI team, under the leadership of Ramesh Deshpande, our board member, makes representations to the government of India. We do this along with all the other printing bodies.

You are a keen watcher of the packaging and label market. What is transpiring in this vertical?
We are seeing converters enter into long-term commitments with the label buyers.

Is this good?
I think this is not advisable.

Why?
These are unprecedented times and have impacted their profitability as customers don't accede to a price increase at regular intervals. Hence most of the converters are in a dilemma as to how to take this forward. Today, the label converter cannot sustain these raw material costs and customers are not willing to budge on pricing.

So, what’s the solution?
We as converters should come out of the long-term commitments and link our pricing to indexes such as Pridex for paper and Cardex for the duplex board,  which monitors and uploads changes in pricing by Crisil independently.

Many firms in India were investing in technology - basically reducing dependence on people availability on their printing shop floor. For example, investments in workflows and finishing equipment? Is this trend to automate the shop floor, dominant among label members, too?
Yes, these trends exist in the convertors with two to three machines or more. These types of automation and systems are must to enable them to be supplied to multinationals or big companies today.

Anything else?
Most important of all, label converters have to invest in skilled human capital.

Why this shift to skilled human capital?
I think factories are changing, evolving from pre-automation plants of the past to supremely sophisticated factories of the future. This demands a generational change in the kind of people you employ to run these technologies.

India is a country with the maximum youth dividend. As an industry have we failed to send out the proper messaging to this demographic group?
The printing industry has been attracting its fair share of youth. Earlier it was seen as a very complex and menial job work-related industry by the youth. Today the equipment has become sophisticated but simple. The point is, job requirements have changed and the industry is attracting the youth to come and participate in the printing industry. Having said that, we still have a long way to go as most of the youth is looking for a white-collar job.

What is your solution?
Some things are easier said than done, particularly in our country. What I’d like to do is: first, look within. There are key operators, especially older ones who have invaluable experience, which can be handy when transitioning to an automated environment. Next is to look forward.

In what way?
I would also like to add that the approach of cross-training and apprenticeship models can also be looked at. It can be refined to fit the needs of the current and future needs of label manufacturers.

So a lot of work remains to be done ...
There is certainly a need to plant seeds for the future recruitment of a digitally skilled manufacturing workforce.

Any new schemes by LMAI which have been a success?
We recently launched a webinar series – Knowledge: accelerating growth. The first webinar saw about hundred participants discuss and make suggestions.

What are the trends you are picking up from LMAI members in India and your overseas label colleagues? For example, we saw Coca-Cola debut label-less bottles in South Korea.
Labels are here to stay, till such time as packaging is required for the products. And in the near future, no such threats are perceived. In fact, volumes are going up. LMAI is seeing the growth of label requirements from tier-2 and tier-3 cities as businesses are penetrating deeper. Growth is also seen as the people who earlier were concentrated in cities, are now working from home and have good disposable income in smaller cities.

One lesson you have learnt from the past 18 months?
Zindagi ek safar hai suhaana, yahan kal kya ho kisne janna (Life is a beautiful journey, what tomorrow has in store, nobody knows). Labels ki suhani duniya hai hamri, issme kal kya ho kisna janna (It’s a beautiful labels’ journey of ours, what will happen tomorrow, no one can tell). 

As president of the LMAI what is your message to the fraternity for 2021-22?
These are unprecedented tough times and we all are braving all odds to survive. Covid-19, slowdown in the economy, and raw material price hikes, are all testing our resilience. We have to work on it or around it, and when we do we will come out as a stronger organisation.

(Rajesh Nema is also the executive director at Pragati Graphics, Indore)