Sunday, November 27, 2016

Maharshi; Integrating forward from applicators into labels!

Rajesh Shah
Rajesh Shah heading the Ahmedabad based Maharshi Group with a conspicuous presence in the label industry, manufacturing label applicators and labels, is a deeply religious man with strong family values. Son of an eminent lawyer, Rajesh finished his mechanical engineering in 1976 and left for Germany to work for a contractor company having office in Germany and sites in North Africa. In 1978 while still in Germany, he was summoned by his family to return to India due to his mother’s serious illness. Being the eldest of the four siblings, they are three brothers and one sister; he felt that it was his responsibility to be home by his mother’s side in this hour of need. In 1979, Rajesh returned to India and soon thereafter got married and decided to settle down in Ahmedabad. His wife came from a business family, who was involved into textile machinery. While Rajesh was contemplating the way forward, he was suggested by his in-laws to try and get into engineering industry. He accepted the suggestion and started a business of manufacturing Stainless Steel Vessels, Process equipment and other needs of the pharmaceuticals, Cosmetic and chemical industry fabricated in a small set up  and supplying. The small size of the operation and slow progress soon made him restless and he started to look around for something that was bigger and more innovative with quicker turn around. Some friends suggested him to make conveyors, the idea appealed to him.  At this point of time he set up his maiden industrial startup venture Gopinath Engineering Company for fabrication of stainless steel vessels and conveyor systems. This brought him in touch with more pharmaceutical companies and he being a sharp observer was looking around for synergies that would support his venture. In the early 1980s he saw the opportunity come his way that would shape the way for his future growth. Ahmedabad based Core Pharmaceuticals wanted to install automatic Self adhesive Label applicators on their packaging lines but found the imported equipment way too expensive. Rajesh knew from the word go that this was his chance and he grabbed the opportunity. He offered to develop the label dispensers and applicators for them. To understand the product intricately, Rajesh left for Germany and visited Guhl and Scheibler AG, a company manufacturing automatic labelers. He also visited other similar European manufacturers to understand their technology. 

On visiting different manufacturers, he understood the technology in detail and concentrated on the best available. On return to India Rajesh developed his first label applicator and once it was successfully installed, there was no looking back!

The Labeling systems manufacturing facility is now a part of the Maharshi group and known as Maharshi Udyog. It is perhaps the largest labeling systems and applicators manufacturing company in India. This part of the group is operating in a factory with 100 employees on a plot area of 100,000 square feet and built up shop floor of 60,000 square feet. Another 90,000 square feet of land has been acquired adjacent to the factory for further expansion. Rajesh’s other brothers, Bhagwat Shah and Hiren Shah also joined in to manage the growing group. While Rajesh looks after overall activities as a Group Chairman. Bhagwat, a commercial person, looks after finance, administration and personnel and Hiren, a Mechanical engineer, looks after design and manufacturing at Maharshi.  Hiren’s brother in law, Jigesh Dani takes care of sales and marketing under the guidance of Rajesh. The next generation is already in business. Rajesh’s son, Harshit, a mechatronics engineer, is already actively involved in the group activities taking care of automation systems, sales and marketing. Bhagwat’s son, Dhrumil has completed his MBA from Nirma and is under training in sales and marketing.

Maharshi Udyog’s sprawling shop floor is a sight to witness. It has a huge number of machines in various stages of completion. The variety of equipment is so diverse that one remains in awe at the possibilities they have created for themselves. The range of products they offer is from simple label applicators to print and apply systems for variable data labels, incorporating barcode inspection, missing label detection, bottle neck inspection and automatic segregation. It is an amazing array of equipment that they produce. They are also entering into production of packaging machines that include machines for automatic filling, capping, labeling, carton erection, product insertion and whole gambit of automatic packaging. The unit is complete with design, electronics and quality control departments. The spare part storage is all meticulously systemized with computer support and it is easy to trace the spares instantly when a customer is in need. The whole process of customer service support is planned at the manufacturing stage itself. Since they cater to the food and chemical industry, most of the fabrication is done with recommended grades of stainless steel. The shopfloor is clean and systemized with workers widely spread out and working on the equipments allotted to them. All equipment on completion undergoes strenuous tests before the customer is called in for the FAT (Factory Acceptance Test).

It is obvious that on entering a new industry one has to ensure that proper raw materials are available.
Jigesh Dani and Rajubhai
In the 1980s Indian labelstock manufacturing was still in its infancy. Availability of labelstock in roll form was still scarce and not of the quality as desired. For this reasons the label rolls produced from them were also not as desired. The web when running on these label applicators would break due to improper punching or the matrix would keep breaking due to uneven release values. Most of the conversion of stock to labels was done on slow flat bed Japanese label presses. The release base paper availability those days was difficult and what was available had caliper variations causing erroneous die punching. Where the release paper was thin the die would not punch and the label would lift with the matrix and where the release paper was thick there would be a through cut causing web break increasing downtime and wastages. If the release was too tight, it was another nightmare with matrix breaking and its removal was a cumbersome exercise.  Silicone chemistry that time was still the old, which is now outdated, the tin catalyst curing system with post curing process. This always resulted in uneven release values causing problems in label dispensing on applicators. When Maharshi faced these problems in the late 1980s, they developed vendors who could understand their need for labels that would work on their applicators. It initially appeared to work but then due to reasons mentioned, while this problem was being attended yet another cropped up. The market for labelers grew and with it grew the demand for labels in roll form. Their preferred vendors could not deliver the desired quality in time. So that the applicator business does not suffer, a decision to integrate forward was taken at Maharshi to produce labels themselves. It was time to set up Maharshi Labels.

In 1995 the Shah family invested along with investments from Bhagwat Shah’s friend Rajendra Gandhi (fondly called Rajubhai) and Jigesh Dani to initiate the enterprise Maharshi Labels. Rajubhai was to look after production and Jigesh would take responsibility of marketing of not just the labels division but the entire Maharshi Group. From setting up shop in 1995 to 1997 they invested in 3-4 presses. These were the flat bed Onda and Changi presses. In those three years, as the population of their labelers grew, the Maharshi team realized that these slow flat bed machines will not support the growth in demand for labels. In 1997 they added a ten inch rotary flexo Acquaflex label press to augment their label production capacity. The decade of nineties and later, saw a sea change and growth in the label industry in India.  Flexo printing, plate making, inks and pre-press was evolving. Usage of self adhesive labels in India was on the rise. Automation in the packaging industry became not just a process but an imperative need to meet deadlines. Growth bug hit Maharshi. Between 1997 and 2012 they bought a label press every alternate year. They were a Mark Andy customer and when the MA-LP-3000 was launched, they bought it within months. Then the change of heart! They sold all the Mark Andy presses and one by one replaced them with Gidue’s. Today they operate with 5 Gidue (Now Bobst) 370mm label presses. They still use the old flatbed machines for the real short runs and as the duo of Jigesh and Raju says, we enjoy using them.

Lord Ganesha
It is traditional and almost all label printers, when they commission a new press, the first label they print is a religious label. Mostly it is picture of the God that they worship. This is to seek HIS blessings for the new equipment.  At Maharshi they follow this even today, each time they buy a new press, they print the picture of a deity. When I asked Jigesh if they had any nightmares, the answer was quite simple, “we are deeply into machine building and know how to troubleshoot. So we had no real nightmares!”  One of the earliest labels they printed was that of Vasmol, a popular brand. The most challenging and satisfying job till date remains the Signature whiskey label that needed to have micro embossing, foiling with three different foils and printing with special pantone shades. The job became extremely challenging because the customer, who was using their labelers, did not give any artwork. They just handed over a few labels to copy and produce identical. Accepting the challenge the Maharshi team developed a special multi-foiling machine in-house and imported the blocks from UK. The challenge was successfully met and brought immense satisfaction. Rajubhai and Jigesh continue to efficiently run the label enterprise with active support of the Shah family. Rajubhai’s son is a qualified chartered accountant and planning for some expansion in related products. 

Jigesh’s only son, Yash has no interest in the father’s activity, he is deeply into music. He is a fine Tabla player (Indian drums), who has entered the Guiness book of records for the longest Tabla playing performance. 

At the moment Maharshi’s expansion plans are under wraps. They have the space and resources to expand.  Maharshi Labels has the scope to expand and they have access to the market but the intense competition and shrinking margins makes them cautious. However still, the growing market size does confuse them, tempting them to consider producing to economies of scale and cutting down on wastages and increasing volumes. Their label unit operates from a land are of 50,000 square feet and a shop floor of 30,000 square feet with 70 employees. The total group turnover of the Maharshi is around 15 Million US Dollars. They have their hands full at this moment and it is a matter of time before they will divulge their plans for next expansion. As for their intention to foray into packaging, Jigesh says, “The day we can convert it on a web press in-line cost effectively, we will also be into packaging.”

Written by Harveer Sahni, Managing Director, Weldon Celloplast Limited New Delhi India August 2016 exclusively for Narrow Web Tech Germany. 
The article maybe published with the permission of Narrow WebTech Germany giving credit to them and to the author
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Thursday, October 27, 2016

Indian labels market; inching towards a billion square meters

“The annual turnover of Indian packaging industry will touch $ 32 billion by 2025 from the present $ 24.6 billion” the Union Minister for State for Commerce and Industry E M Sudarsana Natchiappan said as per report in the Economic times of Jan 06, 2014. We are now into the end of 2016, which is almost three years hence. The growth rate is estimated by the Indian Institute of Packaging and the ministry of Commerce & Industry at 15%. If I take this CAGR (Compounded annual growth rate) of 15% and calculate, the total packaging market size in India at present should be 35 Billion USD per annum. According to PIRA (Pira is the worldwide authority on the packaging, paper and print industry supply chains), labels constitute less than 3% of the total packaging market. This includes all of Self adhesive labels, Shrink sleeves, Wet glue labels, In-mould labels, etc. So the market size of labels in India if I calculate at a modest rate of just 2.5% of the total packaging market, it works out to be in excess of 0.9 Billion USD or at present rate of Forex conversion rate, it is estimated to be Rupees 6000 Crores. Assuming 40% of this to be the market of self adhesive labels, the market size of self adhesive labels then works out to over Rupees 2400 Crores or approximately 900 million square meters. This would include all of printed paper & film labels, Sheeted and roll form labels, stock lots, Barcode labels, etc. The organized sector may look much smaller but together with the unorganized sector in the label industry which has mushroomed all across different geographical zones in the country adding volumes to the overall consumption, the consolidated figure becomes substantial. Consumption continues to grow steadily in even the smaller towns of the country. Some of my industry colleagues exercising caution, differ in opinion and emphatically state that the market size is lower. With current Indian population in October 2016 being 1.33 Billion, the per capita usage of label materials in India is estimated by me to be 0.67 Square meters while my other friends in the industry feel it is a little less than half a square meter per capita, meaning the market size is almost 670 million square meters. So the market should be within the range of 670-900 million Square Meters.

In 2003 I made a presentation for Cham Tenero Paper Mills Pressure Sensitive Symposium in St. Moritz Switzerland whereby I had made an assessment of market size of self adhesive labels in India based on consumption of adhesive and silicone sold in India to produce silicone release liners and self adhesive labelstocks. The presentation has been reproduced by me as a post on this blog, please check out . With my experience of being a siliconiser and labelstock manufacturer I calculated the amount release paper and labelstock that could have been produced. The figures coincided and gave a realistic picture of indigenous production of labelstocks by local players to be between 125-140 million square meters plus the imports and sales of Avery Dennison which had just started to get a firm foot hold into the market and was operating out of their Gurgaon facility only. Taking 125-140 million square meters as the reasonable figure in 2003 and calculating at the Ministry of commerce and Indian Institute of Packaging declared CAGR of 15% per annum we arrive at a present market size of self adhesive label materials  of 769-861 million square meters  which is within the estimated market size arrived at in the paragraph above. In the earlier part of the new millennium we saw rapid growth of self adhesive labels, much above the CAGR 15%, this was for various reasons; the economy was opening up, organized retail was also coming up creating new demand for labels and the old slow flat bed label printing machines were making way for faster rotary flexo label presses.

In 2013 I wrote an article on Baldev Singh Jandu of Jandu Engineers, who besides making label printing machines also makes coating and lamination machines. Most of his equipment is supplied to MSME units that fall into unorganized sector. He has been making coaters for many years now. In 2013 alone he sold 16 coaters, though he says his coater are being now designed to run almost 100 meter per minute, yet I calculated at an average speed of just 50 meters per minute, two 8 hour shifts and a 25% down time. That would translate into an annual production capacity of 170 million square meters. This increase is coming from just one equipment supplier in just one financial year. He has been building coaters and selling for many years. He continues to sell his coaters and there are others also like him building coating lamination machines adding to the bulging capacity of self adhesive materials in India. Then we have hot melt adhesive coaters coming in from China. This all is besides the capacity augmentation by the likes of Avery, SMI or the imports by Raflatac. I am sure neither of these coaters are idle nor are they up for sale. The market is huge and continues its upward trend. In the second half of 1990s there were just three labelstock manufacturers in NCR Delhi and maybe 10 to 15 across the country. Today the number in NCR is close to 30 and overall in India is in hundreds. This all leads to figures of market size much larger than what we are assessing it to be.

Let me go about this, another way. There are more than 500 label printers for printed labels and an equal if not more, number of label manufacturers who produce plain labels, price labels, A4 inkjet/laser labels and barcode labels. This adds up to a 1000 converters having anything from one to maybe twenty presses. There are large converters who use over 40,000-50000 square meters per day and then there are those who consume much less. If I take just an average of a modest 2500 square meters per month and with almost 1000 converters, this translates into a consumption of 750 million square meters per annum! If I increase the average consumption to 3000 square meters per day the consumption figure jumps to 900 million square meters calculated at 300 days production. If I add to this the sheet fed label market the market sizes increases further. I have tried assessing the market size in three different ways and each time it reaches within the same limits. Surely we have with finality crossed the half a square meter per capita consumption mark and are inching towards the one square meter per capita and presently hovering around close to the magical I billion square meter mark!

Note for print publications: Magazines may reproduce the above article by giving credit to the author.
Written by Harveer Sahni, Managing Director, Weldon Celloplast Limited New Delhi India. October 2016.

"Self Adhesive labels in India" presentation made in Switzerland in 2003

Presentation at St. Moritz, Switzerland in September 2003 as a part of the Cham Paper mills Pressure Sensitive Symposium. Now reproduced!

Diverse India!
India is an exciting country full of diversity. The culture, language, religion, food, colour, weather/environment, etc. changes as you travel through the different states from Kashmir in the North to Tamilnadu in South or for that from Maharashtra in the west to Kolkata in the East. A country with 1 billion and 27 million people is now becoming the hunting ground of the marketing people worldwide. The shear size of the market is attractive, though the urban population is almost 28% of the total population, but the growth rate of 31.2% in the no. of people in urban areas compared to the 17.9%in rural India, points towards a growing middle class and a huge potential market. Self-adhesive labels is a market that is now looking up and registering growth from the impact of this urbanization and consumer awareness due to the efforts of the marketing men, whether they are from Indian companies or from the multinationals. Selling consumer products by individual shopkeepers over the counter used to be the most widely employed method of selling till a couple of years ago. While it is still the predominant method yet the more global style of relating through self-service departmental stores is making retailing a fashion statement with marketers and consumers. This new trend has brought in a whole new demand on to the labels industry. Gone are the days when only esthetics was the criteria for finding a place on the shelves. Today a label has to perform in imparting good looks, last till the life of the product, give information and to top it all has to have variable information’s in terms of barcodes to facilitate selling, accounting, inventory controls, etc. This and many such trends have brought a surge of demand to the Indian label industry while it is difficult to dwell on all aspects which are bringing bigger volumes yet it will not be out of place to mention that a major demand is also arising from organised manufacturers practices where labels with a limited life span lasting only on shop floors are used. They help in assembly, inventory control, security, identification etc. People are coming forward with demands for new types of label applications that were unheard of in this country. The growth in this market has now prompted the label printers to get together and from the label printers association to look into matters relating to them. The Government of India trade policy reforms, provide an export friendly environment, with simplified procedures. Focus is on liberalisation, openness, transparency, globalization, moving away from restrictions and improving competitiveness to meet the global market requirements. All this has resulted in bringing in a whole lot of foreign direct investment in industry and infrastructure. Needless to say we now find international self-adhesive labelstock manufacturers like Avery Dennison setting up shop here. Raflatac did make a foray by selling through a distributor but the arrangement was terminated due to total reliance on imports. However still according to Mr. Kerri Palli of Raflatac whom I was talking to at Labelexpo-Brussels, “India is very much on our mind and will be our next stop to set up a manufacturing base”. Jacstaadt also had plans, Torsten JungLenz, their sales director, has a lot of friends in the Indian label industry. Now with Avery having acquired Jac, the market equation stands changed.

Indian market for self-adhesive labels initially was concentrated in Mumbai and it is thus that we find highest number of label printers and labelstock manufacturers there. Majority of self adhesive labels in the earlier days were the product of the screen printing Industry. Screen printers would print plain paper apply glue on the back, dry it, place the release liner and then die-cut. Then the offset printers moved in and with that came the demand for labelstock in sheets. Many of these printers installed narrow web label presses and soon the way self adhesive labels were made started to change. Though the narrow web label industry has spread out to Ahmedabad, Pune, Vapi, Daman and other nearby areas but the biggest concentration still remains in Mumbai. This is attributed to the growth of large industrial base there due to proximity to the port. Growth spread to other areas, north India, due to its proximity to central government, has become a high growth centre. Setting up of facilities like Internal container depot, handling international cargo and custom clearance, made many multinationals and industrial groups set up industrial enterprises in this region. In my runup to writing this article this article I had sent a questionnaire to many label printers, label stock manufacturers, silicone coaters, adhesive manufacturers etc. Although, all did not reply, yet whatever replies I could get made interesting reading and I would like to share with you in these articles.

Market sizes and growth
In my effort to arrive at a relatively accurate figure on the size of the market, I asked this question but none of the respondents could give any conclusive data. Infact a couple of people who attempted, were way off the mark so I decided to make my own study. According to Mr.Praveen Shankar of Jubilant Organosys (formerly Vam Organics) the total market of water based PSA for label application in India is 5000 tons per annum. “Silicone consumption for paper release application in India is to the time of 300-350 tons per annum,” says Dipankar Dutta of Wacker Metroark. Based on my knowledge as a labelstock and release liner manufacturer I arrived at a figure, which correlates, to both the above figures. The production of labelstock by indigenous manufacturers is between 125-140 million square meters. This does not include the products offered or sold by Avery, Jac or Raflatac or those imported into the country. To my estimate additional 50% of the above quantity comes in imports in shapes of raw material, finished goods or stock lots so I estimate the present demand in India to the time of 200 million square meters most of which is paper stock and does not include tapes or other self adhesive materials. With this I arrive at a usage of less than a quarter square meter of per capita usage. Compare this with 12 square meters in USA, 8 in Europe, 7 in Japan, less than 1 square meters in rest of Asia. Most of the respondents suggested growth rate projections between 10-20% however personally I would rate it much higher. I refer to the “Asia Label Market briefing“ by Mike Fairley and published by Labels and Labelling, wherein it is given that self-adhesive market in India in 1999 was 65 million square meters. I take this as indigenous production and compare it to the figure I arrived at 125 million square meters, which means a growth rate of 40%. When looking at area wise usage the general views are that Western India leads followed by North, South and East in that order. However highest growth rate in terms of percentage seems to coming from North but due to the larger size of the market, bigger volumes still come from the west. The North Indian market is registering a fast growth owing to the fact that, National capital region Delhi and surrounding towns is the most urbanised area with 93% urbanisation followed by Chandigarh at 89.8%.

India has been a predominantly paper labels market. Recent trends and demands by innovative label designers has brought with it, demand for better and different face materials, whether paper or filmic. Higher converting speeds, newer printing methods, need for variable information printing and sensing of the printed data and other such requirements have forced labelstock producers to offer better face materials especially suited for required applications. Filmic stocks are picking up in demand. Today filmic stocks are less than 10% of the total labelstock usage but in terms of percentage higher growth rate are coming from this segment however due to the sheer size of the paper label segment the growth volume will remain much bigger in paper.

Water based emulsion adhesives are the most widely used adhesives in the Indian self-adhesive labels industry. Almost all the new capacities that are being created employ water based emulsion PSA. Solvent borne acrylics and rubber resin adhesive are only a miniscule portion of the industry. However the underdog is hotmelt adhesive. Indian label printers are taking a fancy for this. Prasad Accumeter and Stay on Papers in Hyderabad, and Interlabels in Mumbai must be given credit for contributing to the growth of labelstocks with hotmelt adhesives. Newer capacities in hotmelt segment are being added. Two new Nordson hotmelt coaters have arrived one for Millenium papers, Chennai and one for Weldon Celloplast Ltd. in New Delhi. Most of the Indian Labelstock manufacturers employ locally made coaters to coat water based adhesives however a few exceptions like Kedia Lamicoats at Silvasa have installed a used Windmoeller and Holsher coater.

Solvent based tin catalyst silicone systems have been the most widely used and accepted silicone coatings. With installation of faster converting rotary label presses and to remain competitive printers wishing to drive volumes, the need for better release coatings became imperative. Metroark Ltd. which is now known as Wacker Metroark was the sole supplier in earlier days so the scope for development was limited. Then with the advent of liberalisation came the other players like GE and Rhodia. Soon a pleasant change has started to descend the silicon liner market. GE and Rhodia had their technical men visiting the leading coaters and advising them to improvise and use their existing machines to coat newer technology. Today thermal curing solvented and solventless platinum catalyst silicone system are being used by a a few coaters in India. However UV curing and electron beam curing systems have not even been considered so far. Faster label dispensing and applications is putting pressure on more and more label printers to opt for the advanced silicon chemistries on the release liners. In terms of substrates used for siliconising, glassine remains the most preferred one. However cheap stock lots of SCK tempt may converters to use it. It is interesting to note that some top of the line converters of computer labels in A4 format are specifically demanding SCK and CCK liners for this application because of their lay flat properties and non slip feeding into the printers. Notably amongst these printers are R.K Papers at Mumbai and Rational Business Corporation at Delhi. Filmic liners are now also being experimented and used in certain products.

Printing Technique :-
Flatbed, letter press printing remains the most widely employed printing technology. This is mostly due to the lower cost and local availability of dies as compared to expensive and imported rotary dies. Progressive and dynamic printing companies are now opting for newer, faster rotary flexo label presses as also semi rotary letter press machines with a variety of option like UV curing, laminating and hot foil stamping stations Machines like Nilpeter, Gallus, Aquaflex, MarkAndy, Iwasaki, Kopack, Comco, Orthotec, Focus, Arsoma etc have found their way into many label printing units. Though highest capital investment is in the West, with concentration in Mumbai, the highest growth in terms of percentage is coming from the North, South comes third with Eastern sector trailing. To my knowledge in recent years Amit Sheth of Sheth Graphics has successfully sold atleast three Orthotec machines in Calcutta. Other than this the Eastern market relies on screen or offset printers for self-adhesive labels. I am not aware of any additional capacities in label printing created the last couple of years in this area.

Almost all the respondents to my questionnaire feel there is no slow down in the label industry. They all foresee a bright future for the Industry. Entry of Multinationals like Avery, who are now omni-present in the industry is welcomed by printers as they feel that they will make the market grow and develop in quality. What is surprising is that other labelstock manufacturers share this view. Infact most of the respondents in the industry feel the presence of multinationals is good news however they are all optimistic that the multinational labelstock manufacturers will not enter into label printing. It shows an underlying fear, given the fact that Avery markets labels and other finished labels worldwide.
Apart from the normal growth it appears there will be a marked shift from wet-glue labels to the self-adhesive labels. Mr. Ravindran of Seljegat in Sivakasi is optimistic and happy that the liquor industry has started its shift towards self-adhesive labels this will be a major chunk adding to the usage of self-adhesive labels in India.
Without mentioning the development being made by manufacturers of label presses in India this study would be incomplete. Pioneering work is being done by many, I would like to mention the achievement of Baldev Singh Jandu of Jandu Engineering who has now over eighteen fully rotary label presses in operation and has orders worth another six in hand. This is incredible! All machine are flexo rotary. A word of caution comes from all against the free inflow of B grade materials and stock lots into the country. In words of Pranay Goda of Kaygee Papers, it is the biggest threat facing the industry, label printers and suppliers should form an association, educate end users and set standards.
Time has come when more and more constituents of this industry are coming forward for the growth of the industry. Formation of label printers association at Mumbai, launching a B2B portal by Weldon, a label show has to be held in 2002, etc are some of the steps that will promote the industry. With a market as large as India there is only one way the demand can go…..Up!

Note for print publications: Magazines may reproduce the above article by giving credit to the author.
The above article is written by Harveer Singh Sahni, Managing Director of Weldon Celloplast Limited, New Delhi-110008 in August 2003