Attempting Good to Great!

Efficiencies of the integrated packaging and commercial printing model

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Munish Chawla of Blue River Capital speaking about IPPOPL said
International Print-O-Pac Limited was the second family – owned in India packaging company to divest a minority stake to a private equity investor. At the time, Munish Chawla of Blue River Capital speaking about IPPOPL said, “the integrated printing packaging business model allows the company to deploy capital efficiently, and offer complete value added packaging solutions to large global retailers. Modern day organised retail demands innovation and design and consistency in quality and delivery.”

We recently visited IPPOPL’s Noida premises for a look at some of the developments that have been benefited by the INR 55 crore (approximately US$ 14million) that Blue River put in for its minority stake at the beginning of the year. Rishabh Singhvi the 29 year-old executive director of the company told us that the company has spent the year bringing down its debt leveraging and investing in new equipment assets that have enormously increased production capacities across all the three segments in which it is engaged – paperboard and corrugated packaging, commercial printing, and publication printing. Overall, the company is looking at a 50% growth in sales year on year. Of this, about 35% across all the three segments will consist of exports.

Packaging debottlenecking
By adding two automated MANRoland sheetfed presses – a 706 LV 6-colour and a 506LV 6-colour – both with full UV interdeck curing, a Bobst Speria 106 die-cutter and high speed folder gluer, two Chinese
liner machines for high quality corrugated boxes, and a fully automated Stienneman Lotus laminator the company can now run three complete packaging lines without any interruption. The Steinneman can produce 11,000 laminated sheets in sizes up to 102 x 142 cmwith considerable savings in the consumption of glue.

The de-bottlenecking exercise has been helped by significant upgradation of the prepress department that is now seen more as a part of the package development operation with its comprehensive Esko workflow including FlexRip and Backstage server including Golden Retriever and the new Esko Suite 7 software.

The package development section uses the Esko Kongsberg samplemaking table for showing new designs and to generate multiple design ideas for products using Kansei Research. Kansei is a Japanese technique that is being employed worldwide in the design of consumer products and in evaluating factors that make a consumer product desirable. Moreover, IPPOPL now has twomanufacturer’s ink kitchens (Huber-Micro and Arets) contiguous to the prepress, packaging development and quality control lab for producing the necessary spot colours and UV inks and coatings that competitive high quality packaging demands.

In the commercial and publication printing area there have been significant investments including the imminent arrival of a brand new Komori heatset web offset press with a 578mmcutoff. The new web press will add highly automated top quality capacity to the two used heatset presses that the company currently employs for magazine printing as well as long run commercial work. The new heatset is expected to be commissioned in the first quarter of 2008. In addition, International Print-O-Pac has recently become the exclusive Indian licensee for the France
based Lama POP display systems.

The company has also made considerable investment in their ERP system,which not only coordinates the entire marketing and workflow but also helps IPPOPL provide online information to its clients. This is necessary with offices and representation in Bombay aswell as Bangalore and Kolkata within the country and
in the UK and Dubai for exports.

Rewriting the rules
The promoter Singhvi family, together with the investors, plan to take International Print-O-Pac public in the next year or two. However, plans thatmay fructify in the next few quarters include the acquisition of packaging and stationery companies in Asia and perhaps even in Europe or North America. This would fit in well with the global sourcing initiatives of large multinational manufacturers and retailers.

Rishabh Singhvi studied finance at LSE and the Said School of Business atOxford before joining the family business in 2001. He is keen to lead the transition fromgood to great by rewriting the rules of the game. IPPOPL has to some extent done this by combining packagingwith commercial and publication printing. Singhvi emphasises the synergy between these segments and hopes to take it further with their own branded stationery line in the near future. According to him, this synergy helps in better utilisation of capacity, as many processes like prepress, printing, hot foil stamping were common across the segments. For instance, even books require covers printed on foil laminated board stock and embossing and foil stamping that are primarily packaging processes. Now it also seems that each segment is being looked at more closely in itself. For instance, opportunities in publication printing or stationery production are getting both new technology and global marketing channels.

Rishabh Singhvi alsowants to drive down the average age and increase the quality of the human resources in the company. With the average age at 35, the company hires 12 to 15 MBAs each year and already has a marketing team of 50. Currently, the company employs 500 with the minimum qualification on the shop floor being an ITI diploma and looks to hire anywhere from 60 to 80 new employees each year.