Yesterday on the 2nd
of February 2017, the world’s largest label printing company CCL announced
their entry into India. CCL lead by Geoffery T Martin and headquartered in
Toronto Canada has 2015 revenues reported at 3 Billion USD and a total
workforce in excess of 19000 employees, operating out of 150 state of art
manufacturing facilities spread over North America, Latin America, Europe,
Asia, Australia and Africa. CCL, through their Dubai based joint venture with
Albwardy Group; Pacman-CCL, signed a binding agreement to acquire a majority
stake in Mumbai based Super Labels. The press release received by me from
Pacman-CCL and also available on the company website is as below;
CCL Industries Announces India Entry for CCL Label
TORONTO, ON--(Marketwired
- February 02, 2017) - CCL Industries Inc. a world leader in specialty label
and packaging solutions for global corporations, government institutions, small
businesses and consumers, announced today that the Pacman-CCL joint venture,
headquartered in Dubai, has signed a binding agreement to acquire a 70% stake
in privately owned Super Label Mfg. Co. ("Super Label"), based in
Mumbai, India. Super Label focuses on pressure sensitive labels for large
consumer products and healthcare customers with operations in India. Pacman-CCL
will invest $3.75 million in the venture to acquire its stake, reduce debt and
provide funding for future expansion. Closing is subject to customary
procedures and is expected to conclude later this month. The company will continue
to be headed by its founder, Bharat Mehta, and becomes part of Pacman-CCL
trading under the
CCL corporate identity system with immediate effect.
John Dawson |
Pacman-CCL now has
plants in Dubai, Oman, Saudi Arabia, Pakistan and Egypt as well as India. The
Company is jointly owned by CCL and Albwardy Investment based in Dubai and
headed by John Dawson, Managing Director. 2016 sales were approximately $50
million.
Geoffery T Martin |
Geoffrey T. Martin,
President and CEO of CCL, commented, "Over the last decade we looked many
times at entering India through acquiring a local business. Super Label is one
of the best managed we have seen, I believe this is the best way forward given
Pacman-CCL's proximity to the region. Our Indian Checkpoint subsidiaries remain
separate to this venture, entirely under CCL control, focusing exclusively on
Retail and Apparel markets."
CCL has been eyeing
the Indian market for more than 6 years now. In my blog post that time titled,
“Joint
Ventures, Mergers, Acquisitions & International Partners, still Positive in
labels.” I had mentioned; “On the
21st of March 2011, a press release from CCL Label Worldwide ruffled many
feathers and set the ball rolling towards the current trend of JV’s and
acquisitions. CCL label headquartered in Canada, employing 5800 employees at 61
locations around the world, acquired 50% stake in Dubai based Label Co. Pacman.
In the same press release a line read; the
partners have also agreed in principle to a prospective future Greenfield
investment by Pacman- CCL in India. If the world’s largest label company was
planning to invest in India, it was time for Indians to take stock. They had to
consider partnering with other international partners to face the challenges
coming from such large entities. Though CCL has yet to announce their entry
into India in label production yet leading Indian label manufacturers have
opened their doors by either selling out or partnering with larger players.”
During Labelexpo 2013
at Brussels I met Geoff Martin, Chairman of CCL Label and could
get an in-depth
“India specific” view from him. The industry in India has for long looked at
him with bated breath as to when he will invest and have been guessing who will
be his strategic partner. Geoff had at that time mentioned that they were
looking at many companies but his vision was to look for companies whose
promoters had emotional dedication towards their venture. He did not approve of
promoters who after succeeding wish to sell, make big money and quit. Those who
managed their company well with vision to see their units and their team
prosper even after management changing hands, were what he was looking at. In
December 2015 Guenther Birkner, now the President,
Healthcare and Specialty business at CCL visited Mumbai and the news spread
everywhere that CCL had signed up to acquire controlling interest in Bharat
Mehta lead Super Labels in Mumbai. However in absence of any confirmation or
press release from either of the companies, it remained a rumour or gossip.
More so after CCL took over Checkpoint systems, it was evident that finally CCL
has presence in India. Now with this press release CCL’s entry into label
industry into India is a confirmed reality.
Harveer Sahni with Geoffery Martin at Labelexpo |
Chronicling the
history of label in India I wrote, “By
1976, Bharat Mehta and his brother
setup a label press. Bharat Mehta bought his
first Siki Label press from Ahmedabad where it was being used to produce
unsupported wet glue labels. Shifting over from a business in agricultural
pumps at the age of 26, Bharat Mehta settled down perfectly in to his label
printing business. He is one of the most respected label printers. From a
single Siki he went on to add a fully loaded Gallus, an EM 280 8 colours, EM
280 6 colours, and an Acquaflex. He was the first in India to opt for a full UV
label press. In the earlier part of the decade of 2000-2010 he lost
heavily in a major fire but firm resolve brought him right back in what he
liked best, “Producing self adhesive labels”
Bharat Mehta |
Soft spoken gentleman
of the Indian label industry Bharat Mehta is both, the history and present of
the Indian label industry. He is one of the first label printers in India. I
could sit with him and chat for hours about our time spent in this industry
which has evolved like a family for him and me. Bharat Mehta’s Super Labels is
one of the leading and respected label printing companies in Mumbai. His two
sons joined him in business after completing their management studies.
Indian label industry
is growing for sure but most of our printers complain of intense competition
and depleting margins. They are under pressure to service debt as they would
ideally wish to do comfortably. They are in a dilemma on the extent of further
expansion, more so in the scenario whereby large multinational companies are
investing into India. They wonder if the existing customer base and market will
grow rapidly to provide enough opportunities for all or shrink by the incoming
of foreign investors into labeling. My personal view is that with a growing
literate population, low per capita usage at present and expanding retail, there
will be enough business for all.
Written and reported by Harveer Sahni, Managing Director Weldon Celloplast, New Delhi, India
Magazines are free to publish this report giving credit to author.
No comments:
Post a Comment