At the Baddi-Nalagarh-Barotiwala industrial hub in Himachal Pradesh, we met V. Kishore Kumar of Baddi Print Packs (BPPPL), a sister concern of Pavitra Graphics in Chennai. Kumar and his operations manager Zaheer Hussain shared their insights on the new industrial hub and the considerable investments that they are making at their three units in Baddi.
BPPPL, like Pavitra Graphics in Chennai, produces printed cartons, labels and corrugated cartons for the pharmaceutical, cosmetics, food, personal care, health and oral care sectors. Both units were founded by Subba Rao, a packaging industry veteran of 23 years. The BPPPL operation was set up in March 2005 and has three units at distinct locations in Baddi. The combined built-up area of the plants is about 18,000 square feet, which exceeds the area of the Chennai unit that was set up in 1984. An additional 6,000 square feet can be added to the current BPPPL locations.
The first unit has a new Heidelberg CD74 4-colour press in the popular packaging format of 60 x 74 centimeters, installed in August 2006. The machine configuration was worked out in consultation with Heidelberg India. BPPPL has also installed a thermal Heidelberg Suprasetter E74 CtP with an online processor as well as a new Polar label cutting machine to strengthen their post-press facilities. In the pressroom, there is also a used 2001 model Mitsubishi 6-colour offset press with an online UV and varnish coating unit that can uniquely print on board as heavy as 1000 gsm. For label printing, there is a used Komori Lithrone 20. For die-cutting, there are two automatic and six manual machines. These include a new Yawa die-cutter and a used Sugano is expected to shortly join this battery. There are seven folder-gluers including an Alpha-Omega and a Standardmax.
The second unit, a couple of hundred meters away on the same side of the hillside road, houses a used Komori 6-colour press with a coater and another 9-unit press, this time a Komori 8-colour machine with a UV coating tower, that can be used for printing on plastic cards as well. This three-storey building also contains staff quarters for many of the BPPPL employees.
Kumar said that the major reason for their coming to Baddi was the strong market for high volume packaging there. However, according to him, the excise tax exemption benefits announced by the government for Baddi are availed of mainly by the product manufacturers and packaging consumers located there. There is an income tax benefit applicable to manufacturers for ten years. For the first 5 years, there is a full rebate on income tax and, in the next 5 years, there is a 30 per cent rebate. Since manufacturers are exempt from paying excise duty, MODVAT benefits are not available.
The HP government’s 70 per cent local workforce rule is difficult to follow as there is a severe shortage of skilled labour. The labour and training costs are high. Kumar also says that the government needs to take major steps to improve the infrastructure of Baddi. The town is not yet well connected to any major city. There is no rail connectivity and, apparently, the bridge that connects Baddi to Nalagarh has collapsed over a year ago and is yet to be reconstructed. The strong truckers’ union makes transport quite expensive. The cost of living is high as well and basic amenities are inadequate. As in most of North India, power cuts are frequent and all plants need to have full generator back-up.
In spite of these problems, BPPPL has already achieved a turnover of INR 240 million (US$ 6 million approximately) in 2005-2006 and plans to reach INR 500 million (about US$ 12.8 million) in the financial year 2008-09. Kumar told us that 80 per cent of their turnover is from pharmaceutical clients and the other 20 per cent from manufacturing cartons and corrugated boxes for electrical appliances.