The Indian label industry is often in the limelight because it is seen as one of the fastest growth segments of the packaging industry in the country. How-ever, in the current financial year much of this double-digit growth is actually nominal, since it reflects a significant price increase in the previous year. While there are some signs of growth such as increased demand for quality tooling, label volumes have not really risen – at the same time label stock prices have risen significantly. Moreover, hypercompetition is compelling some printers committed to high top-line growth to use stock lots instead of branded labelstocks. Some of the responsibility for this deterioration in quality has to be apportioned to purchasing managers who are loath to adopt best practices for maintaining quality and competitiveness.
The increasing pressure emanating from the low prices of some of the bigger label printers, is hitting the smaller label printers the most. According to some industry experts, the middle level of label businesses (those with let us say three to five label presses) are the most sustainable since they can provide both process efficiencies as well high value addition. It is likely that the best amongst these middle level label printers will also be able to take away some business from the larger volume players. The larger players may in fact only be chasing top-line growth in order to make themselves more attractive to global companies that are bound to enter in the next couple of years.
The current financial year has again seen the influx of many high-end label presses. In fact European presses have become even more competitive because the Indian Rupee has seemingly appreciated against the Euro while it has depreciated against the US$. At the same time, while there is discussion about process efficiencies, these are not easy to realize without any increase in or improvement in the quality of production professionals – this type of human resource is extremely scarce as are technicians at the shop floor level. The problem seems much larger than can be single-handedly addressed by niche attempts such as the Avery Dennison Knowledge Center.
80 label presses in FY 2015-16 in South Asia
The financial year from 1 April 2015 to 31 March 2016 will see the installation and induction of approximately 80 to 90 new label presses that can be divided into four categories according to their price, claimed productivity, special technology and automation features. The top category of high-end presses including gear and servodriven presses with 8 to 10 print units, multiple converting options and some automation (representing a considerable range in cost and complexity) will number about 25 to 35 installs. The second category including the improved quality of Indian- made narrow web flexo presses would also include a similar number. The third category of mostly Asian-made presses would include another 15 to 20 presses. The fourth category of digital presses would perhaps add up to three or four machines in the entire financial year. The current year has also seen the installation of a small but significant number of highly configured label presses in other parts of South Asia – that is in Bangladesh, Nepal, Pakistan and Sri Lanka.
A new feature of the industry in the current year are the entry of new global manufacturers that were neither visible nor represented in the country. Additionally, a large number of slitting, rewinding and inspection machines have been installed in the current year – as many as 20 machines dominated by the influx of Rotoflex, Prati and ABG.
Thus there is an overall upgradation of the industry which has invested in presses with more features, increased automation and faster speeds. Additional ancillary equipment has also added productivity to the workflow. Better digital prepress and higher definition has also improved quality overall. But there is still not enough joy in label-land – too many businesses do not see their growth as sustainable unless there is a real pick-up in demand for quality work that can show that the new technology put in place provides both added value and workflow efficiency.
Packaging South Asia is the cooperating media partner for drupa 2016 which is scheduled to be held from 31 May to 10 June at Dusseldorf, Germany.