Price competition in labels likely to prevail

The next-gen label printers talk

VIAHarish Penumarthi
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The biggest label show in the country, Labelexpo India 2018 is almost here. The event brings along all the major players from the label industry under one roof providing a platform to exhibit new technologies and innovations. Competition as far as pricing is a challenge and it will be prevalent in the industry. Though the past 2-3 years have been fruitful for the label printers, there is no denying that the label industry is plagued by several other challenges that have a detrimental effect on the business and are denting the profit margins of label printers. Apart from that, there are various factors to look at such as some interim challenges, solid waste waste management of labels, consolidation in the industry, proper and adequate training and impact of IoT on label business among others.

Interim challenges faced by label printers

“If we look at the pharmaceutical industry, we will notice that companies are investing in their own label printing machines. Be it any company, including the major ones in the business, each one has its own label printing facility. So, a big chunk of business is lost there. Another major challenge is the exports. It will dry up eventually because Africa, once a ripe market for exporting labels, is slowly becoming self-sufficient and is now able to supply as per the demand. Earlier, labels were being exported from India and Philippines to Africa. The main reason is that the technology is now available at a price that is more or less affordable; as a result, the number of label printing presses in even the smaller countries is increasing rapidly,” says Bhrigav Jain, proprietor of Monarch Graphics. Whereas Parshav Jain, director of S Anand Packaging says that with increase in demand for short-runs and smaller lead-time becoming a prerequisite, the demand for digital printing will grow in India. “But currently, I feel that high machine cost and running cost makes digital an unviable solution. However, we must also realize that every industry is facing its own challenges and each one has their own way of overcoming those challenges,” Parshav Jain adds.

Need for systematic training programs

In countries such as the United States, national associations such as the TLMI and FINAT conduct robust training for printers through various training programs, which is still missing in India. Only Avery Dennison has so far taken up the responsibility to provide a systematic training. But again, just one company taking the responsibility for a country with a population of more than a billion won’t really help. With continuous innovations and the rising demand for embellishments, printing gained a new dimension in terms of technical complexity. These changes come once in every six to eight months, and to be able to supply as per the trends and innovations is extremely difficult without adequate training.

Solid waste management of labels

With global warming on the rise, protecting the environment and the responsibility of disposing waste in a sustainable manner is growing day-by-day. The label industry has an ongoing challenge to find environmental and cost-effective ways of disposing non-recyclable label backing liners. Tons of label waste are dumped by printers in the landfill sites every year. The reason this happens is because the backing liner of adhesive labels has a silicone coating and hence cannot be recycled following typical methods that paper, cardboard and plastics are repurposed.

“The government now demands an answer to the utilization of waste that is being produced by the label printers. Gradually, these steps will lead to a situation wherein the label printers will have to follow a set of rules and regulations that make them accountable for the waste they generate on a day-to-day basis. These regulations will initially be implemented on the small and middle level companies. Among the two, the mid-level companies will have to face the toughest time because they will have to follow the regulations and they won’t have the volume to sustain. On the other hand, the government will not focus on the small-scale label suppliers because of which their costing will remain intact. So, there will be a lot of challenges as far as the solid waste management,” Bhrigav Jain shares.

The impact of IoT on label business

Nowadays, our smartphones, laptops, tablets and even our cars are connected. The internet makes communication, finding information and doing business easy. All in all, we can communicate with our devices and our devices can communicate with us. This is the same in the printing process as it is no longer confined to a stand-alone press; it is now a part of an integrated workflow process, thanks to the Internet of Things (IoT). “IoT according to me will have a huge impact on the label business in the coming future. During Labelexpo Chicago, Nilpeter conveyed a lot about the implementation of IoT on its machines. This concept is going to be a game changer and the labels might not be confined to simple and conventional labels; we may see smart labels in the future. It might require the integration of RFID into label printing,” Bhrigav Jain adds.

Consolidation in the industry

Talking about the consolidation in the industry, Parshav Jain says, “I personally feel consolidation is good for the label industry. It makes smaller printers gear up to match the quality and competition from larger groups, which significantly contributes to the overall development of the industry.”

On the other hand, Bhrigav Jain says, “We see a lot of people talking about consolidation in the industry but I don’t see that coming. My analogy behind this is that all the major businesses are family-run and they have been handling it for decades now, which brings us to a major question – are they are really up for consolidation? If their customer-base is good and if they are able to manage their economies well, I don’t think they will want to consolidate or be taken over by a bigger entity.”

Equipment purchase parameters

Lastly, talking about the equipment purchasing parameters, Parshav Jain says, “I think equipment purchasing parameters should depend on the target segment one wants to focus upon and look at how their current customer base would benefit from it. Market feedback about a particular equipment that a printer plans to purchase also matters a lot. Another important factor to be considered is the after-sales support provided by the press manufacturing company in case of a probable breakdown. Last but not the least, one should always consider the price of the equipment being purchased in order to justify its viability.”

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