This is the final part of History of
Indian Label Industry” up to third quarter of 2019 written by the author. The history
would look incomplete if mention was not made of those who started their label
journey from scratch or very humble beginning and then rose to a pinnacle
achieving success not only in the home market but also internationally and
continue with their journey to greater heights.
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| Ole Rugland MD-Skanem who acquired Interlabels with Gautam and Bhavin Kothari promoters of Interlabels |
From the start
of new Millennium in 2000 until the time of writing this part of the history,
enormous changes have come about in the Indian label industry. Label printing
companies who started from virtually nothing, grew and spread to multiple
locations. Some of the bigger ones on the way, decided to sell out to or
partnered with foreign companies who were entering the Indian market for label
manufacturing. Label, being a miniscule portion of the total packaging cost of
a product, does not deliver very large turnover as compared to that of package
printing or flexible packaging companies. However, it does generate relatively
higher profit margins than that of high turnover package printing industry. For
this reason, we did not see any label companies in the earlier part of the new Millennium
who could reach a coveted target of Rupees 100 Crore or a Billion Rupees as
annual sales turnover. However, some packaging companies or multinationals who
invested in labels as well, were above this figure. It was incredible that at
least three Indian startup companies who started their business purely with
stickers that later evolved as labels, grew to cross Rupees 100 Crores turnover
or more in 2018-2019.
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| Manish Desai-Mudrika Labels |
First among them
is Manish Desai led Mudrika Labels. Sandeep Desai working at a greeting cards
company started trading in stickers that he outsourced in 1975 and a year later
he started screen printing them at home. His 10-year-old cousin, Manish was
always excited to see stickers being made. In 1977 Sandeep moved his sticker
manufacturing to a 500 square feet factory in Malad. In 1985 they started
outsourcing pregummed sheets and get them printed on offset to finally finish them
to be stickers at their factory. They grew and expanded into packaging, making
cartons and corrugated boxes. Sandeep eventually moved into packaging and the
young Manish who had labels in his heart, in 1996 expanded into labels with
Kopack label presses and later many Gallus presses. He further expanded
integrating backwards to produce self-adhesive labelstocks and collaborated
with a Korean company to produce heat transfer labels. By 2019 Mudrika labels
were working out of 100,000 square foot shop floor, 550 workforce to achieve a
Rupees 160 Crore (1.60 Billion Rupees) annual sales turnover.
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| Kuldip and Naveen Goel of Any Graphics With their awards |
The second
person to achieve this Kuldip Goel of Any Graphics started from very humble
beginnings. At a tender age of 14 years he started making stickers by screen
printing manually himself to earn some money while still in school. He did this
in his one room home. Despite extreme hardships in life he remained honest and
focussed on providing the best in quality and indulging in innovation. In 1989
he started his maiden venture Stickline in Noida. By start of the millennium Kuldip’s
company Any Graphics was recognised as one of the best label manufacturers in
quality and one that never cut prices to get orders but prove their innovative capabilities
to convince customers. From mere screen printing he went on to add dome labels
and letterpress printed labels in his portfolio. In 2009 he moved to a 100,000 square
feet clean sanitized dust free factory adding, Heidelberg Offset Presses,
Orthotecs and a fully loaded Omet flexo and screen combination label press. He
also became one of the largest makers of rigid boxes. By 2019 he had crossed
the Rupees 100Crore sale without compromising profit margins and becoming one
of the most awarded companies in India. In 2019 he commenced construction of a
certified green factory spread over 15000 square meter plot size and 250,000
square feet shop floor.
T
he third
printer who grew in similar pattern, a stout follower of Lord Shiva who greets
people with, “Jai Bhole Ki” (Victory to Lord Shiva, lovingly referred to as Bhole) Sanjeev Sondhi, started his career as a medical Representative and
carried on in the profession switching jobs until 2005 when he decided to trade
in Barcode labels, printers and accessories. He was looking for bigger things
in life! Two years later in 2006 he launched his maiden start-up venture Zircon
Technologies India Limited with a Mark Andy 2200 Label press in Dehradun. Being
a salesperson himself he drove the company in fast mode expansion and in a few
years added multiple Mark Andy and Omet label presses which include the
high-end combination Omet Vary flex 430mm. In just 15 years of inception Zircon
crossed the Rupees 100 Crore reaching 120 Crores annual turnover mark coming
purely from label manufacturing, “a record in itself”! While other successful label
companies at this stage would look for foreign suitors, Zircon in 2019 was the
first totally indigenous label manufacturing company planning to go public to
raise capital for future expansion. They got the approval from SEBI in November
2018 with plans to open a 90-100 Crores public issue. Waiting for an
appropriate time to launch their public issue Zircon continued to grow and
invest in expansion. Sanjeev hoped to invest 80 percent of the receipts in
expanding labels business while the rest in other allied products. Sanjeev was even
looking at inorganic growth by indulging in Mergers and Acquisitions. With 3
factories in Dehradun and one in Chennai Sanjeev Sondhi aims to grow multi-fold
with blessing of Bhole (Lord Shiva).
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| Sanjeev Sondhi of Zircon with Pawandeep Sahni-Omet with OMET Varyflex press |
Having achieved
such success through sheer commitment and hard work it is natural for companies
like the three mentioned above to look at other avenues in synergy with their business
to achieve a faster growth. All the above, while they continued to be proud of
their beginnings and aware of the evolution, started to study or invest in new
technologies. We had reached a time when
multiple labelling technologies surfaced, and future had many surprises in
store. From the primitive times when a label had to be either tied to a product
or riveted on to it or affixed with a wheat flour paste, we believed to have
reached a pinnacle when self-adhesive or pressure sensitive adhesive labels
that were developed and grew to establish as a predominant labelling
technology. Initially it was the manually applied wet glue adhesive paper
labels that were in use. With development of starch and dextrin-based glues and
availability of automatic wet glue labelling equipment, wet glue labels became
the most widely used method of labelling. Most of the organised industry
employed packaging lines incorporating wet glue labelling. It was used in all
segments like pharmaceuticals, Liquor, cosmetics, oils and in fact most of the
products that were packed in glass bottles or metal cans. When plastics, mostly
HDPE (High Density Polyethylene), started to evolve as a preferred packaging
material for glass bottles and cans due to ease of manufacturing, reduction of
freight due to lighter weight per can, possibility to produce in different
shapes and colours, labelling with starch or dextrin based adhesive became a
challenge. This change was taking place during the 1970s and 1980s. Since HDPE
is a low energy material, paper labels with water-based adhesives made from
various gums, starches and dextrins would not anchor on to the containers or
would fall off in transit. Labels with pressure sensitive adhesives or stickers
had already started being made initially by screen printing methods and later
by offset printing, these labels would stick well just by application of
pressure. They did not have to wait for drying and could be packed instantly
after labelling while the wet glue labels would have adhesives oozing out on
the sides and attracting dust and shifting in packing process, adversely
affecting the aesthetics. More and more companies were opting for these
stickers.
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| Heat Transfer Labels for pens |
Towards the end
of last century self-adhesive labels evolved in roll form and the automatic
labelling equipment for pressure sensitive adhesive labels became available.
Many companies did resist shifting from wet glue to self-adhesive due to the
high cost of label applicator replacements. This is a big challenge that the
likes of printers mentioned above faced and yet with their firm resolve they
became a part of the change that brought them success. As the retail became
dependent on customer choices and there was need for better decorated labels,
self-adhesive labels became the preferred labelling technology and grew at fast
pace. In between screen printing on containers also started but a slow process
that did not have much decoration as compared to printed labels, it did not
grow as a preferred process. Self-adhesive grew so much that it became almost
50% of all the labels produced in India. As we entered the new millennium and
started looking also into future the thought process for future of labels is
becoming extremely diverse and evolving in different tangents. Shrink sleeves
came in to take away a big market share given the possibility of 360 degrees
visibility. Wrap around labels also became extensively used in the beverage
segment. Heat transfer label technology that had originated as Therimage Label
technology developed by Dennison Manufacturing company in USA in the 1990s did
not flourish then because Avery, who acquired Dennison, did not promote it as
it was not in sync with their core business of self-adhesive labels. Once the
patents expired, the Heat Transfer Labels or HTL reappeared in the second
decade of new millennium and started growing. In mould labels is another
labelling technology that had found usage in many segments and started
registering growth in large volume usage. At this time, I try and link the changes
to the three above who understood the need to expand the scope of labels in
their business portfolio. While Mudrika as I mentioned invested in heat
transfer labels, Any Graphics into innovative labels and rigid boxes and Zircon
also started moving into brand security and innovative packaging including
spiral wound containers.
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| Matrix waste in addition to liner waste |
Around this time
environmental concerns also impacted the self-adhesive label industry as almost
50% of the converted product is waste going to landfills. Much work was being
done on this to reduce the liner tonnage by opting for thinner filmic liners
that can be recycled and by developing linerless labels. Digital printing on to
the products is another technology that may replace some of the usage of
self-adhesive labels. All said and done, the sheer market size in India and the
inertia, brings business to all label technologies and for this reason the
self-adhesive labels market continued to grow at double digit rates. The
industry will keep evolving both in terms of quality and innovation as also
taking environmental concerns in its stride.
In over a year,
as another decade ends, the author will update the history on the outcome of such endeavours.
The total History as chronicled by the author until now is now available on
this blog on links as below:
Part 2 D: Above
Written by
Harveer Sahni Chairman Weldon Celloplast Limited New Delhi July/September 2019
Note: No one is authorised to reproduce, copy or reprint this article until permitted by the author in writing.
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