Living
in a rented chicken co-operative, a young American poverty stricken man in his
early 20s worked as a night clerk to fund his education. He stopped school and
went to live for a year in China, where he gained experience working with a
printing press. He returned to USA after the year, graduated and desperately
tried his hands at various business options, he even sold smoked bananas! He
then took on a morning job at a flower shop and later in the day started to
experiment on various small things in a 100 square foot place nearby. He came
up with the idea of making self sticking labels. With the printing press
experience behind him he saw the vision to start his new venture. With no money
of his own, he borrowed 100$ from his fiancée, Dorothy Durfee, who later became
his wife, to invest in his startup business. Using a washing machine motor,
parts of a sewing machine and a saber saw, he developed the world’s first self adhesive
label cutting machine. In 1935 he started his maiden venture Kum-Kleen Adhesive
Products Co which would be the mother enterprise of the world’s largest
labelstock company Avery Dennison Corporation and this poor man was "Ray Stanton
Avery!"
In
the first balance sheet of the company on 31st December 1935, the total assets
stood at 958.82$ and Stan Avery’s capital at 488.77$.
The
company was later renamed Avery Products Corp. based in Pasadena USA. In 1990
it was merged with Dennison Manufacturing of Framingham, Massachusetts, a firm
that made and marketed adhesive label products as well as glue sticks, felt
markers and other office supplies through such chains as Home Depot and Staples.
It came to be known as Avery Dennison Corporation. The business so acquired
from Dennison Manufacturing, became the Office and Consumer Products Division.
This business along with their “Designed and Engineered Solutions” business was
later sold to their largest customer CCL Industries Inc. for 500 Million USD.
R Stanton Avery |
R Stanton
Avery died in 1997 at the age of 90 years. At that time the company had 16,000
employees and annual sales of $3.2 billion. As of 2016, Avery Dennison’s sales
were 6.09 Billion Dollars with manufacturing and distribution presence in over 50
countries, product sales in 90 countries and 25000 employees worldwide. They
are ranked 427 in the list of Fortune 500 companies.
Raj Gopal Srinivasan |
As
western markets started showing signs of saturation and slowing growth rates,
Avery Dennison took a strategic decision to invest in emerging markets. China
and India being home to over 37% of the world population became the obvious
destinations to invest into. The China investment happened in 1994-95 and investments
into India followed soon after. Indian pressure sensitive labels market was still
in a nascent stage and the potential of this technology had neither been fully
unraveled or exploited. Wet glue labels were largely prevalent. Manual labeling
or wet glue applicators were in use with most brand owners. An Avery Dennison team,
led by Ron, set up its base in India. Raj Gopal Srinivasan was appointed the first
General Manager to build and to lead a motivated team. Under his dynamic
leadership the first team of 25-30 employees gave shape to the project and in
March 1997 Avery Dennison India Private Limited commenced operations as a part
of Asia Pacific Division of Avery Dennison Corporation.
The
initial operations were started in a leased facility at Narsinghpur Industrial
Area, Gurgaon with a single slitter to slit and distribute material imported
from their units outside India. Given the size of the country and the label
industry spread in small numbers across all regions, it was gigantic task with
a limited team to achieve levels of business that would do justice to their
stature as a multinational. Raj and his team did an excellent job by building
personal rapport and relationship that extended bonding not only to the company
managements but also to the families of owners. It was relationship selling at
its best. A setup that was based entirely on imports was difficult to sustain
as custom duties were high, foreign exchange fluctuated and rules were stringent.
The input cost variations made stable selling prices a challenge. The management at Avery Dennison soon
realized the imperative need to produce locally. A one meter wide hotmelt
adhesive coater was installed in January 1998 to produce stocks with imported
raw materials. The initial staff had a perfect team spirit instilled in them
and motivated to achieve more with less resources.
Mahesh Pathak |
A
few of those initial team members of Raj Srinivasan are still working with
Avery Dennison. Mahesh Pathak, joined in 1997 as one responsible for entire process and quality of plants.
He was instrumental in setting up the entire department from scratch and
commercialized all products locally with success. He was responsible for the
organization to be the first certified Six-Sigma BB in whole of Asia-pacific
region. He is also responsible for having lead the expansion and setting up of
all plants. He has risen to be the Senior Operations Director - South
Asia Pacific and Sub-Saharan Africa (SAP and SSA). Umesh Agrawal, joined in
1997 as materials manager and over the years took up different responsibilities
in the organization. Heading the operations from 2001-2003, Head of business
and product development 2003-2006, Director-Supply Chain and Product
Development 2006-2012, Director Supply Chain 2012-2014 South Asia and South
Africa and now Director Supply Chain, Asia Pacific. Muralie KS, a Chartered
accountant joined the team later in 2008, he is the Finance Director of the
company. Sailesh Kapur joined Avery’s team in January 2008, he built up a
strong connect with customers and also shaped up the present structure of their
sales organization. Other members of Raj Srinivasan’s team who also contributed
to making a strong foundation for the project but later left the organization
include Dhiraj Kapur and Kapil Anand.
Once
local production started, business did begin to settle down, however high
duties and political uncertainty in country drove the company to start innovating
and develop products based on local inputs manufactured to their stringent
specifications and quality control systems. In 2001, Avery Dennison started to
siliconize their own release liners and started to produce adhesive locally.
This exercise of localizing and reducing dependence on imports along with lean
manufacturing to economies of scale helped the company to offer products at
affordable prices. Avery Dennison also took upon themselves to educate brand
owners about the benefits of using Pressure Sensitive Adhesives (PSA) labels
and about the consistency of the quality from Avery Dennison products. This not
only brought additional business to them but helped to grow the market size in
the country. Once the business situation settled down, by 2004 Avery Denison
India was on a steady rate of double digit growth. It was time to make
significant investments in technology and people as also to contribute to the
expansion of PS market in India. It was also time to expand.
Avery Dennison Plant in Pune |
In
2007 land admeasuring 22 acres was acquired at Ranjangaon near Pune for expansion.
In 2008 the facility was ready to go into production with a one meter hotmelt
coater, with capability to run at 500 meters per minute with inline silicon
coating, this compared to the first one meter coater at Gurgaon that could run
at 250 meters per minute. The facility was inaugurated by Dean Scarborough, the
previous global CEO and President of Avery Dennison Corporation. An interesting
story of his visit is that Dean flew into Mumbai on company’s private jet from
where he came to Pune in a helicopter. The pilot of the helicopter lost way and
landed in fields nearby and Dean had to be brought in by a private car. In 2010
having paved the path for stable growth and leaving behind a legacy of service
to the customers as a primary focus, Raj Srinivasan left for USA. He had inculcated
in a culture at Avery Dennison India of going to any extent to honour
commitments and deliver top-notch service. It is his legacy that 95% of genuine
requirements are serviced within 36 hours. The legacy has been carried on and
improved upon by the teams that have succeeded him. Good planning, in-time
supplies, exact sizes and good forecasting specially with imported materials,
has become a way of life for the supply chain teams now. “97% of these targets
are met and we are assessed and rated as per the 36 hour target” says Vivek
Kumar, who is heading the Supply Chain at Avery Dennison. He further adds,
“Stringent quality control and consistent quality makes us deliver to happy
customers!” With the depart of Raj Srinivasan to the USA, Anil Sharma was
appointed to head the Indian operations.
Anil Sharma |
Anil
Sharma brought in a new wave of professionalism. Building the foundation and
establishing the fundamentals from a startup, needs a lot of personal human
intervention, which was well delivered by Raj and his team. The company under
Anil Sharma gradually started to move from being men driven to systems driven and
building up to the next level of expansion and growth. Implementing the systems
for order registration, timely delivery, payments collection and addressing
customer concerns. All these processes started to become systemized while still
maintaining the personal connect. 2011 was an eventful year for Avery Dennison
in India. Another 1.5 meter hotmelt adhesive coater was installed at the Pune
facility to enhance production capacity. Since they already had a production
facility in North in Gurgaon and also in the West at Pune, a need was felt for
having a stock point South India to make just-in-time supplies to customers in
the south, adhering to the legacy of excellent customer service delivery. A
slitting facility was also commissioned in Bangalore in 2011.
Inauguration of Innovation and Knowledge center PUNE |
With substantial investment made in 2010-11 they had surplus capacity and capabilities in their hands. Avery started to invest in the South Africa and other African markets to expand the sale of their products in these countries. Marketing team was hired locally in these countries while finance and back-end support is handled in India. It is interesting to note that they were the first among the organized global labelstock manufacturing companies who invested in these markets. Avery Dennison has in recent times also endeavored successfully to expand their reach to countries around India selling their products to Srilanka, Pakistan, Bangladesh and Nepal as well.
Pankaj Bhardwaj |
Pankaj feels that it is good that more labelstock manufacturers are coming into the market. It maybe challenging in view of depleting margins but if that makes the market size to grow, it is welcome. Avery Dennsion looks at India as one of the fastest growing markets and they are willing to continuously invest here. Proof of their commitment is evident from setting up of R&D center, Knowledge Centre, support to LMAI, support to technical workshops and label awards, etc. Adjacent technologies do present a challenge; Shrink sleeves growing at the same rate as PSA labels, IML is a niche not very wide spread and Digital is to be watched. Indulgence in digitally printed label segment is fast becoming an imperative. Despite the market dynamics Avery Dennison India in the last 5-7 years is achieving a CAGR (Compound aggregate growth rate) of double digits.
Recyclability and waste management are industry challenges. As an environmentally consciously Corporation, Avery Dennison has published its global sustainability goals. Avery Dennison India is making steady progress to support these goals by having all Indian sites FSC certified and more than 50% paper sourced from FSC certified sources. Also, all Indian sites are more than 99% landfill free.
Company is continually redesigning its products to reduce carbon footprint and promoting 25 mic PET liners given that paper liners are largely 60-62 gsm substance and are extremely difficult to recycle. PET is recyclable thereby reducing the impact on environment.
Corporate social responsibility is getting increasing focus for Avery Dennison India. Company has multiple programs in the areas of women empowerment, children health and education. Among other programs, Avery Dennison Foundation runs a program by the name of 'Avery Dennison Spirit Of Inventions' in collaboration with six universities by recognizing and rewarding innovative ideas from students in the field of science, engineering and technology.
Written by Harveer Sahni Chairman, Weldon Celloplast Limited, New Delhi August 2017
Printing
magazines and publications may reproduce this article giving credit to
author.
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