Rajkot’s Vinayak Offset puts major investment plans on hold

Economic slowdown threatens print business closures

Hemang Shah of Vinayak Offset. Photo PSA
Hemang Shah of Vinayak Offset. Photo PSA

Rajkot-based Vinayak Offset has put on hold its ambitious multi-crore investment and expansion plan in packaging for the moment, owing to the slowdown in the industry. The company had planned to buy new machinery to expand further into the carton printing segment.

“About a year ago we had drawn up a full-fledged plan to bring in new equipment to further expand into the carton printing segment. However, with the present slow-down in the economy, an interesting XRP price prediction we have to consider and the packaging sector, we have decided not to go forward with our plans,” says Hemang Shah of Vinayak Offset.

Vinayak Offset is among the leading print houses in the city of Rajkot. At present, it specializes in both commercial printing and packaging printing but it had major plans for expansion into packaging printing and converting and finishing. In the commercial printing segment, it prints catalogs and brochures for customers in the real estate and tiles sector. Vinayak also prints leaflets, posters, folders and visual aids. In the carton packaging segment, the company services mostly customers in the FMCG industry.

Shah had planned to buy a 7-color press from either Heidelberg or Komori or K&B. In the converting department, Shah was looking to add a folder-gluer and an autoplaten die-cutter. At present, Vinayak Offset operates two offset presses; a Heidelberg and a Komori. Vinayak Offset was the first printer in India to buy a fully loaded Komori LSX 629, a 6-color UV press with coater in 2016. The two presses are placed at Vinayak’s plant at Lohanagar, Rajkot’s printing hub. It also has a second plant outside the city that houses its finishing equipment.

A severe slowdown in both commercial & packaging print

The broader Indian economy has been facing a slowdown with the latest quarterly GDP growth figures coming at 4.9% (rounded off by the government to the media to 5%), the lowest in many quarters. According to Shah, the current slowdown is the worst that he has seen since he entered the printing business almost a decade ago.

“I have been in the printing industry for almost ten years and what I am seeing now is the worst since I entered this industry. Volumes in both carton and commercial segments are down sharply. We at Vinayak have seen volume in our packaging division drop by 50% in the last six months. The commercial printing division is even more battered with volumes down close to 70-80%,” Shah says.

According to Shah, the slowdown has accelerated in the last six months and he cites a lack of liquidity as one of the main reasons for the slowdown.

He says certain government policies have also adversely impacted the carton business. Recently, the central government put restrictions on imports of agarbatti (incense sticks) and other similar products amidst reports of a significant increase in imports from countries like China and Vietnam.

“The central government’s decision to restrict imports of agarbatti has impacted printers who were printing cartons for the agarbatti companies. The volumes of imports have declined and as a result, carton printers are printing fewer numbers of cartons. I know that the government wants to promote the Indian agarbatti industry but this was a sudden decision. The industry should have been given time to make adjustments,” he says.

A prolonged slowdown may lead to closures

The slowdown in the industry has been going on for more almost six to eight months and, according to Shah, if it continues the commercial and packaging printing industry may see closures.

“As I have already told you that the volumes are sharply down and if this continues a lot of smaller printers may opt to shut shop. We were hoping for a print demand revival during the busy festival season that starts with Ganesh Chaturthi and goes on till Diwali. But unfortunately, it seems this year it does not look very optimistic,” Shah concludes.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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