Thursday, September 3, 2015

Sandeep Lal, former President of Metro Labels, on sale of his company to Tapp Label Company USA

In the early 1970s Narinder Mohan Lal, his son Sandeep Lal and rest of the family left their home town Allahbad a city in the North Indian state of Uttar Pradesh to migrate to Toronto in Canada. Narinder Lal initially started trading in Labels and in 1974 setup a small label production facility in the basement of his home. Sandeep joined his father in business and by start of the new millennium he was put in the driving seat to lead Metro Labels to blossom into one of North America’s top players. In addition to the main 132,000 square foot Progress Ave.-Hwy 401 facility at Scarborough, Ontario, Canada, the 180-employee firm also has locations in Vancouver and Napa Valley. I had written about Sandeep in 2009 and later wrote again last year when they celebrated their 40th Anniversary http://harveersahni.blogspot.in/2014/08/this-is-very-interesting-story-of.html. Having reached a pinnacle, Sandeep Lal decided to sell his profitable and well managed company to Tapp Label Company USA. Recently Sandeep wrote to me explaining the reasons to sell and also sent the transfer of ownership speech that he had made to the employees of Metro Labels.

Indian label industry has in recent times witnessed some sell-offs and acquisitions. I am sure it will be interesting reading for the label industry about the journey of this company that was started from scratch to reach the top and then sold while it was very profitable. I reproduce both the documents mentioned above, unedited.

Sandeep's email:

August 30, 2015

Harveerji,

I promised to tell you more about the transaction and my reasons for the sale. I have attached a copy of the speech I made to the employees at the Toronto Plant one week before the sale was to transpire.
Starting in 1974 I spent two years working part time, in a sales role while I was studying at the University of Toronto, and then another 39 years at Metro Label, providing leadership for the last 14 years. After assuming the leadership I grew the business 14 fold and our profit increased over 40 fold. We chose not to share our numbers with TLMI and intentionally kept a low profile. Our business generated EBITDA of over 22% on sales for most of the last 15 years. Focus on Innovation, a determination to lead technically, appropriate environmental initiatives, a motivated and well trained team was the reason for our success.
The goal was always make a large range of products, to outperform our competitors on quality initiatives, on time delivery and overall performance matrixes while seeking markets outside the typical geographical areas that we were supposed to sell in.
I have listed below some of the things we did for over 20 years to differentiate and grow our business.
1     We led the marketplace by being one of the first, back in 1976, to have our own in-house rubber plate-making. This was followed by an art department and then typesetting equipment when most of this work was done at third parties. When the Mac’s first came out we were an early implementer and did our own films and photopolymer plates in house almost as soon as the technology was available. We were also an early implementer of in-house ink mixing technology in the late 1990’s.
2      Installed the first Customized Unix driven software solution in 1985. This fully integrated package enabled us to capture data off the shop floor and provide instantaneous updates on job status to clients. Order entry, inventory management,  Procurement, Job costing,  data collection, invoicing, Accounts receivables, accounts payable, GL were all fully integrated. This software was comparable to software that became available in the early to mid 1990’s. The efficiencies realized were unimaginable. We were able to outperform the competitors to service their business as a result. Just one of the efficiencies achieved was a large reduction in inventory. We turned our complete inventory 37 times per year. Average competitor gets 12-15 turns a year.
3      We were the third North American installation for Indigo’s very first digital platform back in 1995.
4      We achieved ISO 9001 certification in 1995.
5      We custom designed and installed equipment to integrate Radio Frequency and Electro Magnetic type EAS tags from Checkpoint & Sensormatic, on the adhesive side of our labels to assist retailers to receive products fro their suppliers with the tag buried under their Product identification labels. This was done at 175 feet at minute as many as 4 rows across on one of our presses in 1997
6      All water base and Solvent base presses were converted to UV by 1998, increasing quality, run speeds and reducing run waste and quality defects.
7      All presses had Video web inspection and UPC code verifications systems installed by 1998 to ensure that bar codes printed by us would exceed the UPC scan rate requirement of all major retailers. A statistical record was kept of the scans on press. At least one out of 6 printed labels was read/scanned.
8     We built the first LEED certified building in 2005 to house a Label company globally and won the Global environmental award for it from the Label industry along with awards from the FTA, TLMI, PAC and the city of Toronto.
9      We installed Solar Panels on the roof of Metro Label’s Toronto Plant in 2015.

There were many other innovations that would be tedious to list here.
We developed a reputation of being fearless and ruthless competitors who outperformed our competitors. Client loyalty was a by-product of our performance. Our margins were the result of our strong performance which enabled us to charge a small premium for our products and services.
I look forward to sharing the experience acquired through my successful business journey with my peers in the future.

Sandeep Lal
David Bowyer CEO Tapp Label Co.
 







                            




Transfer of ownership speech by Sandeep Lal the former Owner/President of Metro Labels Toronto Canada.

It is my privilege to speak to you as a group one last time, as the principal shareholder of Metro Label.
When Narinder Mohan Lal my father started this business, our company was definitely an underdog in the label business. There were times when our competitors, suppliers, and sometimes even I, doubted our ability to get through some of the difficult times. Our business survived and prospered because Narinder Lal, my father, believed that our business would survive no matter what, and it did. Not only did it survive it grew and grew. Just like my parents my siblings Nandini & Raideep, my son Vikram, & I were motivated, to work hard and make Metro Label a success so that we may provide for our families.
My parents, Nandini, Raideep, Vikram & I were all fortunate that your personal journey included a career at Metro Label. Your personal motivation, support, work ethic and loyalty inspired us. It made us believe that anything was possible and it was. In the past at the pinnacle of our company’s success Metro Label was ranked the 14th largest company in North America and one of the most profitable. If the Tag and Label Manufacturers Institute had an award for inspiration and effort you all would have won that award many times.
I know that my assertive style and relentless push for excellence created much adversity within our organization. However by working together we set the benchmark for successful label companies in North America. I always did my best to ensure that we looked out for each of your needs. I know that we didn’t succeed at everything we attempted to achieve but it wasn’t for lack of trying.  I always pushed for each of you to reach down deep inside yourself and excel at whatever you were doing.  And you did.
To succeed you need motivated and inspired management with a vision, management which leads by example, and has the Zen like focus to keep all aspects of the business on a sound footing. Over the last few years I came to the conclusion that I was no longer motivated and driven as I had been in the past.
Like most entrepreneurs I had hoped that the next generation of our family would have an interest in taking over the business and provide the leadership. Quite possibly I did not allow that to happen in a way that was acceptable to them.
You have given this company your loyalty and unwavering support. I knew that you all deserved the same. After my much reflection, many sleepless nights, and the support of all members of my family it was determined that Metro Label, which is highly profitable, has an excellent reputation, motivated and loyal team members and a great client list, deserved new owners that would provide renewed leadership and focus.
We expect to conclude a transaction on June 30. What is important for all of you to know is that when you arrive at work on July 1/2015, all of our employees, including my nephew Curran, will continue in their jobs as usual and maintain their employment with the new owners, at this location, a place they have come to know. All employees will earn the same pay, maintain their benefits and seniority and continue to work in this location. Nothing will change.
The new owner has signed a long term lease to stay in this building.
Once the transaction is completed, Nandini and I will work with the new owners to transition the business over to them during the month of July.
I want to thank my father Narinder Lal for founding this business and for giving me the opportunity to run it. I want to thank my parents for their unwavering support and beliefs in my skill and judgement. Vikram and Jayanti for loving me inspite of the adversity and stress I brought home because of my work ethic, and desire to succeed. My deceased brother Raideep, my sister Nandini, and my son Vikram deserve a medal for doing what needed to be done and doing it regardless of what I said and how I said it.  Of all team members they suffered my wrath the most often, and were as responsible for providing the leadership to grow our business. I also want to thank my brother Jaideep for always providing his silent and financial support when needed. I would be remiss if I didn’t thank Meredith my spouse for all of her wonderful support and guidance.
Most of all I want to thank all of you. The company would never be what it is if you hadn’t treated it like it was your own. Last year at our 40th anniversary party I promised the Deferred Profit Sharing Plan(DPSP) payment would be made this year. We will fulfill my commitment to you by making discretionary contributions totalling $400,000 to your payroll accounts as our personal recognition of your support.  This will be our largest contribution in Bonus or DPSP ever. Many of the contributions have been supplemented by an additional discretionary contribution as my personal recognition of your support.
After the deal is completed, on July 1 I will personally introduce you to the new owners. 

Sandeep Lal

Reproduced and compiled by Harveer Sahni, Managing Director, Weldon Celloplast Limited New Delhi-India September 2015

Saturday, August 8, 2015

Indian Label Printers, vibrant and joyful at Jaipur conference




The third LMAI Conference held at aesthetically built Fairmont Hotel in the historical city of Jaipur, India was a unique event in the history of Indian label industry. 450 delegates from all zones of India congregated at the venue. Many of them came with families to enjoy and experience the deliberations of this conference whose theme was, Changing Paradigms and Emerging Technologies. Jaipur is the capital of the northern Indian state, Rajasthan and is its largest city. It was founded on 18 November 1727 by Maharaja Sawai Jai Singh II, the ruler of Amer, after whom the city is named. The city today has a population of 6.66 million, making it the tenth most populous city in the country. Jaipur is known as the Pink City of India. The state of Rajasthan has so much of history that it evokes tourist interest and wish, to visit at any time. Many printers believed that due the summer heat a lot of industry colleagues will give it a miss and the total number of delegates will not reach the figure of 390 who attended the last conference in Goa. Defying the odds, printers landed in large numbers to reach an all time high figure of 450 delegates, recording an over 15% increase in the number of delegates. Eventually it was a full house and urgent requests for more participation compelled the organisers to take additional rooms in the adjoining hotel Le Meridian. 23 sponsors along with LMAI pooling in money from their own resources, helped to subsidies the conference fees providing value for money to the delegates. The Fairmont hotel is an excellent property, with awe inspiring architecture and decor, inspired by theMughal dynasty and Royal Rajputs. It is nestled amongst the majestic Aravalli hills, all 199 rooms and suites are elegantly decorated, to reflect a perfect blend of traditional Rajasthani décor and modern amenities.








As you enter the gates it gives you the feeling of entering a Royal fort.


 The beating of traditional drums, playing of the Rajasthani musical instrument Sarangi and the traditional welcome by applying a tikka on your forehead adds to the pleasure of being welcomed in a typically local fashion.





The three day conference was started with the lighting of the lamp by conference chairman Gururaj Ballarwad and General Secretary of LMAI R L Deshpande. Vivek Kapoor President LMAI welcomed the guests which included Indias topmost label printers, Indian and international suppliers of materials, toolings and printing presses. He informed that the LMAI membership had grown from a modest 65 in 2004 to a sizable 295 in 2015. He reminisced that the first conference at Goa in 2011 had set the tone of this being a preferred label event for the Indian label industry and lead to the success of the second edition in 2013. The overwhelming response and attendance at Jaipur has confirmed that this biennial event will be looked forward to, on an ongoing basis. He also informed that the association had become financially strong so as to support industry benefitting initiatives. Vivek informed the gathering that It was also a time to celebrate LMAI having become a teenager as it was 13 years ago on this day the association was formed. This was followed by felicitating of LMAI committee members, founder members and senior members. A cake cutting ceremony was held onstage to celebrate LMAIs 13th birthday. Jitesh Mehta marketing Director of Avery Dennison delivering the keynote address and stressing the role consumerism is playing in bringing global attention to Indian markets said, Emerging technologies are bursting into the market, generating disruption and change. It is necessary to have a new paradigm, based on multi-disciplinary approach
Representing Tarsus, Labelexpo show Director Jade Grace took the stage next to inform details about the upcoming Labelexpo Europe in Brussels. Tarsus is a big supporter of LMAI and Vivek Kapoor acknowledged this in his inaugural speech. Jade welcomed the delegates to visit the show in Brussels which is likely to be the biggest ever in the 35 year history of Labelexpo. The evening ended with Rajasthani musicians playing Padharo Mare Deshwhich means welcome to my land. Drinks and networking dinner followed


Next morning at breakfast it was opportunity for peers in the industry to spend time with each other and renew friendship. The organizers were frantically ringing the bell to request printers to move to the conference hall. Sailesh Kapoor of Avery Dennison delivered the opening presentation and speaking on the imperative need to dwell on sustainability he said, FINAT has made path breaking initiatives to promote sustainability and recycling, LMAI needs to emulate the same. A rare time when the two industry bigwigs support the same event was seen at Jaipur, the Indian label fraternity was appreciative and recognized this. While Avery Dennison was the main sponsor yet UPM also supported the conference emphatically. Lee Unsworth of UPM Raflatac, also spoke on sustainability, he said it must be a joint effort amongst various constituents of the label industry and end users, else it would be difficult to take it forward. Thillai Ganapathy, of Esko Graphics spoke next on Standardization of Quality & Productivity Optimization through Automation in Pre-Press followed by Mike Buystedt, Vice President, Narrow Web North America, Flint Group Packaging and Narrow Web. He said, LED curing system is the paradigm shift in printing technology. Escalating raw material cost and reducing selling price is a matter of grave concern for printers, so as to retain a reasonable profit margin one needs to cut down waste. In an effort to advise label printers on this issue Samir Patkar MD Gallus India said, Reduce the gap size in waste matrix and use short web path to lower cost

Ajay Mehta Managing Director of SMI Coated Papers emphasized that printers should modernise. He said,label printers need to keep investing in upgraded equipment to remain successful & become solution providers. Manish Kapoor, National Sales Head of Nilpeter in India made a very interesting presentation. Printers were applauding when he mentioned that our printers were firemen involved in firefighting sitting in their factories. He further advised, Invest wisely in "what you need"& not "what is available" when adding capacity!Later Mike Russell - International Sales Director, Mark Andy Inc. speaking on Modern Solutions for Label Printing stressed on the imperative need of having cleaner label factories, Good housekeeping leads to production of good quality labels in a label printing company".



Towards the end of the evenings conference agenda it was time for a panel discussion with leading Indian label printers on the panel. The discussion was moderated by me personally and the audience found it extremely interesting as the audience heard fellow printers on important issues that the industry is facing. Those who were a part of the panel included Chandan Khanna of Ajanta Packaging, Amar Chhajed of Webtech Labels (Huhtamaki Group), B K Manjunath of Global Bangalore, Denver Annunciation of Janus International Mumbai, Arvind Shekhar of Sai Packaging Bangalore, Sanjeev Sondhi of Zircon, Hemanth Paruchuri of Pragati Pack Hyderabad and Rajesh Chadha of Update Prints. The panel deliberated over topics like profitability, need for innovation, impact of production waste, impact of online bidding, operator shortage, impact of Digital printing, government regulations and waste management. Online bidding and reverse auction has been troubling printers for quite some time now. They are unable to justify supplying at irrational prices that emanate out of online bidding. There is need for upgraded equipment so as to innovate and meet quality standards, but these equipments are expensive. Unreasonable low prices cannot support such high end expansion. Waste is another issue that needs to be addressed thoughtfully. Increased waste leads to decreased profitability and it also adds to the problem of disposal and its impact on the environment. Short runs have become a very important part of a label manufacturers profile. There is confusion in the flexo label converters mind whether they should complement existing printing capabilities with digital. Since the panel had printers who had invested in digital and those who have resisted in doing so. The discussion was quite an eye opener even though inconclusive. Sustainability is being talked about at length but our industry in India is not clear about the difference in sustainability and waste management. They do have overlapping issues but for the time being our printers are not attending to waste management and proper disposal, so sustainability is a little far cry. I guess that initiative will have to be driven by brand owners. It was a very thought provoking session and had to be cut short due to paucity of time. The views of the printers drew participation from the audience as well making the session even more interactive and interesting. As the deliberations came to an end the bar was thrown open for printers to network over drinks, a standup comedian enthralled the crowds followed by light entertainment. It was just a matter of point when the delegates in party mood were on to the dancing floor till late after midnight.


Next morning there were some who were missing from the breakfast nursing the after effects of a late night and there more new faces that had come in during the previous day. Printers were lazily moving around in groups chatting and catching up with friends while the organizers were urging them to proceed to the conference hall. The day started with a presentation by Gavin Rittmeyar Vice President - Sales and Marketing of Martin Automatic USA manufacturers of extensive line of automatic splicing unwinds, automatic transfer rewinds and tension control systems. Expressing the need of automation in reducing waste he said, "Any resource or service that does not add value to the product is waste!Thereafter presentations were made by A Appadurai of HP, Jurgen Brau  Head of Inspection Technology, Erhardt+Leimer GmbH speaking on 100% inspection systems, Prashant Atre Managing Director, Toyo Ink Arets Graphics and Tej Prakash Jain Managing Director, Monotech Systems Limited before delegates dispersed for lunch.


 

All the time while the conference was in progress, a table top exhibition was in progress where sponsors were exhibiting with their catalogues. Delegates would walk over to the table top exhibition area during coffee/tea or lunch breaks. 







 
 I must praise the innovative alternative; Round Table interactionbetween the printer delegates and the sponsors, arranged by the organizers. This initiative I understand was the brainchild of conference chairman Gururaj Ballarwad. All the sponsors were allotted round tables in two different rooms and groups of ten printers were made to sit on each table and witness private presentations by the sponsors. The groups were moved around so that in turn they visit each and every sponsors table where they could also exchange business cards with all printer members. This way the sponsors could meet all the printers who came. This was in sharp contrast to the organizers directive to sponsors speaking at the conference, where they were not allowed to make any sales pitch of their products in their speeches. This was emphatically enforced by the conference chairman. He wished that all speakers should deliver technical knowledge to the delegates and not become sales persons of their companys product range. To increase the indulgence of label printers at the round table interaction each person was given a passport that had to be stamped by the sponsor whose table they visit. All the completed passports were then taken in for a lucky dip to draw winners who got lucky prizes. The sponsors and delegates found this event extremely interesting and innovative.

All the delegates then retired to their rooms to rest and prepare for the gala evening in the Grand Ball Room, which had been the venue for the conference. When the delegates returned the hall had been transformed to match its theme, Merchant of Venice. A gondola was erected for people to get photographed as if they were in Venice. On the other side a balcony was popping out overlooking the waterway with two European girls standing there. Delegates were seen going on to the balcony to get photographed, one by one. 





The bar was thrown open and entertainment was in the air. Russian dancers made interesting presentations and a surprising presentation came from the talented Nikita, daughter of SMI, Managing Director Ajay Mehta. She sang extremely well. 









This was followed by a very energetic Bollywood singer Shyamlee taking the stage and singing popular songs and eventually she had the audience dancing to her songs and moves. 










The dance floor was house full, the bar was still delivering drinks and it was almost 2 AM in the
morning that I slipped away to my room. It had been a vibrant and exciting conference. Every delegate was involved in the deliberations and fun. They loved the arrangements and kept thanking the LMAI committee members for the wonderful time they had at Jaipur.




Next morning while some delegates had already left, others were still trying to shake off the after effects of drinking and yet others like me trickled into the restaurant for breakfast and one last meeting with friends before departing. With whoever I could meet and greet I said my byes and thank yous, with wonderful memories of a great event I started my drive back to Delhi.

More pictures:

Anil Sharma Managing Director, 
South Asia & Sub Saharan Africa
with Harveer Sahni
Kuldip Goel Anygraphics & Amit Sheth Label Planet

Ferdinand Ruesch of Gallus and his wife with Harveer Sahni
Jade Grace, Show Director Labelexpo

















 


*This article is exclusively written for Narrow Web Tech Germany and may not be reproduced without permission.

Written by Harveer Singh Sahni, Managing Director, Weldon Celloplast Limited, New Delhi, India July 2015