Saturday, August 7, 2010
Label Industry growing and still time to worry!
Recession hit the western world. It also in a little milder way affected the Indian industry. The label industry in India put up a brave front and never accepted that the downturn had hit them as it hit the label printers and industry suppliers around the world. While the economies around the world were sadly reporting recessionary trends and some actually declaring they were in the midst of a recession, Indian GDP was fortunately still growing. Thanks to the large population and a huge middle class driving demand for consumer products. While all in the Indian label industry have felt the small or big pinch, but they were in unison, “the demand for labels was always there.” Last few months have shown the sheer resolve of the Indian label printers, they started to invest in presses both new and used, conveying to the nation that, “it was time to grow” Even the industry suppliers were investing!
What is interesting is that even the big world players and producers of label materials (or Label stocks) who were facing the brunt of the slowdown in their home territories or in their major focus areas, were observing all this for a long time before the it dwelled on them that it was going to get slow. They had already decided to move into India and had set up shop, they were well set to achieve their operating levels here. While their western operations were putting in their best to fight recession, here they were on way to prosperity. Merrily they were picking up market shares and acquiring units, adding capacity and lo! They are already market leaders. Our local producers were or even today are also expanding but they are running their plants at much slower speeds that they are accustomed to. The larger share of the market has been acquired by the multinationals while the remaining is still meaningful for the Indian producers as they are able to sell their capacities and are striving to sharpen their manufacturing capabilities to match the international standards. It is extremely difficult to match the price levels and financial capabilities of the large multinational players. It is evident that the local manufacturers will coexist with those foreigners, who when they came in were considered, “big brothers”…but in a much smaller way.
Label printers have continued to grow slowly and steadily in India. They have sharpened their skills. Today Indian label printers are a force to reckon with. They are equipped with the latest presses employing the finest of printing technologies. They continue to invest not only in pre press and high quality finishing equipment but also in the latest quality control systems including 100 percent defect detection systems. The Indian Label Association, LMAI is actively trying to project India as a major hub for outsourcing high quality labels for the label users in the western world. Many Indian label printers have invested and are successfully running label printing units in various countries. There are others who are continuously successful in exporting labels. The international acceptability has been achieved. Now the WORRY! Most of the bigger label printers are now worried by the increasing number of international label printing companies already here or planning investments in India. The size of the companies and the scale of their operations will obviously harm the interest of the Indian label printer. Our printers, even the larger ones run their companies with a handful of presses. Majority of them have just 1-5 presses but they have reason to express their concern when companies with scores of presses and huge investment move in taking with them there international customers away from those that these companies patronized. Definitely even when the market is growing… there are worries!
Written by Harveer Sahni, Managing Director, Weldon Celloplast Limited, New Delhi-110008 http://www.weldoncelloplast.com/