Another valuable perspective to include in this issue is that of the paper converters. The converters (printers, publishers, packaging companies etc.) presented views which arose from their own individual markets, and how they perceived changes in their demand structure. This is what they had to say.
Mr. Narendra Paruchuri
CEO, Pragati Offset Pvt. Ltd.
With regard to the ongoing economic recession, how is your current market demand? Does it meet your expectations/ projections?
The market demand is slack. There is definitely no growth Y-O-Y. In fact the last quarter is going to be bad and overall we will go down more than 10% (as compared to last years turnover).
How do you foresee your business, as well as your industry in the near future?
We think things will start looking around June 09. The markets will start to behave normally but we will never go back to the hype of 2007/08. In fact, we don’t want to.
Client’s profile & paper consumption per month?
As a commercial printer our clients are broad based; from various sectors like IT, Fashion, Pharmacy, Realty, and Art etc. We consume around 200 tons per month (TPM).
What are the key factors affecting your customers printing and packaging requirements?
It is the sentiment which is low and this has to be regained. Things are not bad with India. The worst thing that could happen is that the economy might grow at 5% instead of 8%. There is nothing to worry about. Our currency has depreciated and Chinese Yuan has appreciated which is a better opportunity for exporters. Import expenditure has come down because oil is at 40 Dollars. And we are not too dependent on exports. So things should look up once our minds are settled.
Apart from recession, do you, as a converter have any other problems that you would like to share?
There is cutthroat competition. It is sad that we are cutting our own profits by offering unfair prices. The printers have to do a better calculation of ROI, and bottom lines have to be decent to enable survival and improvement.
Mr. Pragnesh Shah
Navneet Publications (India) Ltd.
With regard to the ongoing economic recession, how is the current market demand? Does it meet your expectations or projections?
Due to the current recession, the current market demand has gone quite low. We don’t foresee much reduction in our products, even though we have been affected by the recession. In any case, this overall recession will impact all industries, so some impact is bound to come.
How do you foresee your business as well as your industry in the near future?
There will be some impact; because of the recession, people will start shifting to a lower grade variety also. At present, it’s too early to comment on this.
Paper consumption per month (Scale of Ranges: 50-100, or 100-200, or 200-500, or 500+ TPM)?
The range is 500+TPM (tons per month).
What are the key factors which will affect the paper demand?
Basically it is the rates which affects. Internationally, the rates have gone down in all the commodities. The Indian industry is not coming down on prime raw materials, which is main factor affecting the paper industry and imports will begin.
All the paper mills in India will have to reduce the prices to match international levels, because if there is an increase in prices, it automatically is given effect to, but any international reduction in prices is not visible in India.
The current 4% excise benefit they had passed on, but the earlier reduction from 16% to 12% and 12% to 8%were not passed on to the consumers.
Mr. Saurabh Garg
Director, BrijbasiArt Press Ltd.
With regard to the ongoing economic recession, how is your current market demand? Does it meet your expectations/ projections?
The ongoing recession has definitely hit the current market demand adversely. We had projected a 20% growth for the current financial year but due to the last quarter being slow we are only able to achieve 11% growth over the corresponding period last year. We are booked with orders for the last quarter but these orders were procured before the recession started clawing its way in… but yes new booking are surely affected. We are hoping to manage to cling on to the current growth and if we manage we would have surely done well enough for ourselves.
How do you foresee your business, as well as your industry in the near future?
I don’t anticipate the education sector to be affected so sales in books for young children should still show a increase but yes high end consumer goods will surely be affected and a lower advertising spend by companies will affect our print business. The Packaging segment is already taking a hit as companies have reduced production and are keeping lower inventories. Also realization of money would be even tougher.
Client profile & paper consumption per month (Scale of Ranges: 50-100, or 100-200, or 200-500, or 500+ TPM)?
- Publisher – Children Books, Coffee Table books, Educational Aids, Calendars
- Printing for Corporate’s, Publishers out of which 45% business comes from Publishers in Europe
- Paper Consumption is 500+ tons per month.
What are the key factors affecting your customers printing and packaging requirements?
- Major fluctuations in raw material prices leading to unstable costs.
- Major fluctuations in currency again leading to unstable costs.
- Recessionary mindset leading to lower sales.
Apart from recession, do you, as a converter have any other problems that you would like to share?
- High interest rates.
- Credit squeeze from Banks.
- Export benefits being continuously withdrawn or reduced.
Mr. Vasant Goel
Gopsons Papers Ltd.
With regard to the ongoing economic recession, how is your current market demand? Does it meet your expectations/ projections?
The current demand has fallen across segments. We print books for various segments like Education, fiction, general, literature, medicine, technical, reference, children, and color hardcover.
There has been a drop in all segments; some segments (general books) have seen a drastic decline, whereas segments like medical and technical books have seen very little impact. The fall was expected due to ongoing global economic conditions. We did not have any projections / estimates about the downturn. Export demand has also slowed down.
How do you foresee your business, as well as your industry in the near future?
There are positive signs everywhere. Our industry colleagues and customers are hopeful but not 100% confident. Prices of important raw material like paper have started declining. Other raw material suppliers have also indicated drop in prices. This will definitely help in pushing sales. December – February is normally a low quarter for book printers. Orders start picking up from end February, especially for export market. We hope that by end of February economic conditions and market sentiments will be more positive.
Client profile & paper consumption per month (Scale of Ranges: 50-100, or 100-200, or 200-500, or 500+ TPM)?
Gopsons is a printing company specializing in books / security and stationary products. Our customers are general publishing companies like OUP, Random House, Penguin, Pearson, Harper Collins etc. We also work with government bodies, corporate customers like ITC, BILT, Hero Group etc. Paper Consumption is 500+ tons per month
Mr. Bikash Niyogi
Niyogi Offset Pvt Ltd.
With regard to the ongoing economic recession, how is your current market demand? Does it meet your expectations / projections?
We don’t feel the heat of recession, though recovery/collection has slowed down in recent past. So far we have been able to achieve our targets comfortably.
How do you foresee your business, as well as your industry in the near future?
I foresee the printing business will be as usual in its growth path and future of this business is bright for the quality printer. Indian printing business is at par with global standards.
Client profile & paper consumption per month (Scale of Ranges: 50-100, or 100-200, or 200-500, or 500+ TPM)?
- Our clients are mainly advertisers, FMCG and publishers.
- Paper Consumption is 500+TPM.
What are the key factors affecting your customers printing and packaging requirements?
Slow movements of consumer products resulting in low turnover in business.
Mr. Amrut Shah
Managing Director, Sundaram Multipap Ltd.
With regard to the ongoing economic recession, how is your current market demand? Does it meet your expectations / projections?
It is fact that everybody globally is facing the economic recession these days, but since we are basically into school paper stationery manufacturing business our industry is least effected till today, because we manufacture essential products for the mass. No doubt the recession may slow down our business in terms of wait-and-watch policy applied by customers.
How do you foresee your business, as well as your industry in the near future?
As everybody knows that education is essential for a nation’s growth. The Indian government is also promoting the education on a very large scale in its Five Year Plan (2007-2012), which shows a very bright future for paper and paper converting business.
Client profile & paper consumption per month (Scale of Ranges: 50-100, or 100-200, or 200-500, or 500+ TPM)?
We are basically School and Office Paper Stationery manufacturers and directly deal with end consumers through our network of distributors and dealers in the following manner:
- Students of all ages 80%
- School and universities 07%
- Commercial/Office establishment 08%
- Personal and others 05%
Our paper consumption per annum is approximate 20,000 tons of paper and 5000 tons of Duplex board.
Apart from recession, do you, as a converter have any other problems that you would like to share?
The major problem faced by our industry is competition from the unorganized sector which shares 95% of total industry.
Mr. R. Suresh
CEO, S.T. Reddiar & Sons
The global economic slowdown in the international arena may be a boon for the Indian printing industry as the print buyers in USA, Europe and other developed countries may seriously think of outsourcing a major portion of their printing jobs to Indian printers. By doing so, they could save more than 25% compared to the European printing market and roughly 10% compared to China and Singapore markets. The only lacuna for the Indian printer is the high rate of freight. If the airlines could consider reducing their freight charges for printed materials (as in the past), we could capture a major share from Europe and USA. In my opinion, the printing industry will not have many problems from the international market.
Whereas in the Indian market, in all probability, there will be some slackness for the print industry since many of the real estate lobbies and the MNC companies (mostly financial institutions) have started cutting short their requirements of printed items such as calendars, diaries, greeting cards, brochures, publicity materials, stationery etc.
The requirement of paper is growing at an alarming rate as the education, publishing and production fields are in the advancing stage. It is estimated that about 20% extra requirements will arise during 2009 for educational and production areas.
The growth of electronic media has slightly affected the printing industry since most of the corporate companies and banks have diverted the dispatch of greeting cards, publicity items etc. online. The growth of E-books has also slightly affected the production of technical and scientific books.
Trends in advertising, marketing, and media may also affect the printing industry to some extent. I feel that in order to meet the slow down, the printers should think of introducing new products and services to the print market.
Despite all these factors, I believe that the requirement of printed materials in the indigenous market will increase by 10 to 15% in the coming year, and the export market will increase by 15 to 30% as compared to previous year.