Recession or slowdown … it is time to innovate!

Column — Harveer Singh Sahni

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Visiting Toronto in 2002, I had the opportunity to visit Metro Labels, owned by Sandeep Lal. It was an impressive factory with huge investment – the latest  presses and a great setup, producing an equally innovative and awesome product range. One of the many labels samples he gave to me was an interesting shampoo bottle label. On the very face of it, it was a very normal looking well printed and decorated label. It had all the statutory information, along with good branding on it.
The interesting part is that it had a small diagonal half-cut on one of the top corner. Once a user had bought a shampoo bottle having such a label on it and had placed it on the counter in the bathroom, the user could lift the corner and peel off the top layer of the two-layered label. With the top layer came off all the commercial information and the branding, leaving behind a nice bottle having a label with just a good looking floral design on it, nothing else! It served the need of such users who did not wish to make their private domain an advertising space for the manufacturer of toiletries.

There may be sine concerns about the removal of some of the statutory information, but the point I am making is about the innovation involved. These ideas are the need of the hour in the present market conditions.

At this point of time, recession is hitting the global economies and making adverse impact on industry. In India it is cautiously being reffered to as a slowdown. The economic figures being reported for our country do not put us into that category falling under the definition of recession. Fortunately our GDP is still showing positive growth.
However, in the present circumstances most printers, press suppliers and industry suppliers maintain a restrained optimism on the revival of the markets. It is a situation that generally appears after a bout of rapid growth and expansion. I would term it as time for consolidation. There was a spate of investments in label presses during the last couple of years much beyond what had been invested in the preceeding years. This seems to have led to a state of overcapacity and fierce competition. When you look back and assess the situation, you are left wondering if it is really the recession or the slowdown or the after effects of growth in installed capacity which happened because of the euphoria of inflated projections of the rate at which the market was expected to grow. Anyway, it is time to consolidate. Label printers at this juncture should use the opportunity to innovate and use the full capabilities of their equipment to develop new products that would add value for them as well as for their customers.
From being a country where labels were traditionally printed on conventional sheetfed presses, we have seen the gradual shift to rotary flexo printing. Lately printers have installed high-end combination presses with a variety of advanced printing, decorating and converting capabilities. Ironically many of them have not exploited the full potential of their equipment. This is so because of their imperative need to break even and keep their machines running. In such a situation they continue to produce the same labels that they were producing on their older equipment. Now when it appears that they have a little time on their hands, they need to indulge in development and innovative products that will add much needed profitability to their bottomlines.
At the time of the last LMAI Label Awards, we noticed a vaccum in many segments of the label industry. While there were a lot of entries in the letterpress and flexo segment, when it came to offset there was only one company for all the awards. The case was same in the booklet label segment and ultimately there was no entry in the electronic label segment and the award was given to a company who made a pioneering investment in an HP Indigo label press to produce labels in roll form. Evidently there is room for investment in new segments and also the need for new products. It is time printers invested in research and development and spent some quality time with professionals involved in packaging product development to create label innovations.
Metro
In the beginning of this column, I mentioned my friend Sandeep Lal of Metro Labels in Toronto, Canada. It is the success story of an Indian who travelled to foreign lands and worked his way to glory. Long years ago, Sandeep helped his father at their chemist shop in Allahabad, UP. Being the only successful and reliable chemist in that area, their business was good, growing and flourishing. Many smaller shops tried their hand in the same business but never succeeded in competition. They were envied by those who wished to copy their success but were unsuccessful. Then came a day when a protégé of a local politician managed a complaint against them and they were raided for drug law violations. Their business was sealed and they had to fight it out for six months before they could get to reopen their shop. Meanwhile the damage had been done! The competitors had firmly established themselves.
The Lal family was dejected and disgusted, they just locked up the shop and left for Canada to try their luck in a foreign land. That was sometime in the early seventies. They started by selling labels sourced from other label printers.
They worked hard to make their business grow and eventually started to produce labels themselves in 1974. The first flexo press that they had used was displayed as a showpiece in their reception area when I visited them. They have since moved to an even larger facility, which has to its credit a host of awards. By far it is perhaps the most impressive label factory setup in recent times.
The unit was given recognition by the city of Toronto and TLMI in 2007, and the FTA and Label Expo in 2009 for environmental leadership awards. The company now ranks amongst the largest Label companies in North America and is the largest producer of pressure sensitive labels in Canada. Recently they have been recognized as one of the 50 Best Managed Companies in Canada for 2005, 2006 & 2007. They have taken over other units and now operate from many locations. With Sandeep Lal aggressively heading the company, Metro Labels continue to grow and make worthwhile acquisitions. I wish more and more Indians work hard to take their companies the Metro label way!
Harveer Singh Sahni is the Managing Director, Weldon Celloplast Limited, New Delhi.