“Today the major worry for the label industry is not that of growth potential but how the industry will handle the growth that will unfold in the coming years,” says Ajay Mehta, managing director of SMI Coated Products, in a conversation with Packaging South Asia. According to Mehta, the Indian label industry will continue to clock an average growth of 15% to 20% annually and label printers will need to figure out how they will generate funds to ride this growth rate and even improve on it.
In addition to capital, Mehta says, label companies need a good team, a robust system and sound infrastructure to capitalize on the growth potential. Also, installed capacity should not create a mental burden for players. “Instead of buying more machines, funds should be used to efficiently utilize your current machines. The bottom line is to fully tap the growth potential and companies will have to become efficient so that they make enough money to further fuel that growth,” Mehta adds.
SMI generates almost 50% of its business from exports. Asked if exports could be an attractive option for label printers as well as other label stock companies in the industry, Mehta points out that earlier exports were an attractive space but over the years numerous issues have virtually rendered that option extremely challenging.
Since the requirement for labels is immediate, exports as a business for Indian label printers does not make much sense. Also, frequent design changes are an issue, while another development is that several Indian exporters who were exporting out of India have set up shop in foreign markets to meet the demands of their customers much faster; and finally, a major factor hindering exports is that the cost advantage which Indian players formerly enjoyed has been lost due to inefficiencies.
For label stock players too, exports are out of reach because of a lack of consistency and quality. “The labelstock players have the drive towards achieving consistency and quality but unless they see financial gains in this, how will they move towards it? Therefore,that drive has be reflected in actions that currently are not happening,” Mehta states.
SMI’s new plant comes up
Since infrastructure is also an important factor in the whole scheme of things, SMI itself has been investing in expanding its infrastructure. Being one of India’s leading manufact- urers of pressure-sensitive label stocks with a wide gamut of products in its stable, SMI’s manufacturing plant in Ambernath is about 40 kilometres away from Mumbai. Spread over 6,500 square metres the Ambernath plant is equipped with state-of-the-art machines – two acrylic adhesive coaters, two silicon coaters, one hot melt adhesive coater, three slitting machines and three sheet cutting machines. The factory contains an excellent facility for testing both raw materials and final products.
SMI recently commissioned it second unit in Ambernath which is larger than the original plant. Some production has shifted to the new unit and more infrastructure will be added to the new plant over the next few months. With both plants in operation, SMI’s annual capacity has reached 110 million square metres of label stock.
Although the company offers new solutions every 40 days, some of the stand-out solutions offered in the past year have been a seven-day product for the barcode industry, a thinner range of self-adhesive labels, some environmentally friendly solutions and some security solutions. “Coming out with new products is an ongoing process for us and with the new plant up and running more new products will follow,” Mehta concludes.
