Ramu Ramanathan (RR): This conference room in which we are seated has superb carton samples...
Amila Singhvi (AS): True. A lot of what we’ve created is due to the retail boom which has boosted our packaging business. After all, hardly anything in this country is sold lose any more. The packaging spend for FMCG (mainly cigarettes, safety matches, cosmetics, detergentsand food articles, ghee, tea, masala, cereal, biscuits, liquor - all of that has both increased substantially and improved in quality. Shelf packaging meant economy size. Today, our services add durability, value, branding and visual aesthetics. Also conservation of waste and preservation of perishables. This is reflected in our display in the IPP conference room.
RR: You’ve been an integral part of the print industry thanks to your father, Sher Singh Bhandari who headed Indo European Machinery.
AS: I grew up acquainted with printers in Mumbai like Dhote, Bolton Fine Art, Bombay Fine Art, who were visitors at home. Never did I envision setting up a print business. I considered print as business after marriage in the early eighties . My husband ran an advertising agency and was looking at business options. We invested in a scanner and decided to get into pre-press. That is where our connection with print was established and thus began a stage-by-stage process of development. IPP became a printing company in 1993 and a packaging company in 1999.
RR: Rewinding to your early days in school and college, was print an option, back then?
AS: No, not really. I had in mind that I wanted to work. But in our community, things are very dependent on where you get married and which family. I’m a graduate in chemistry after which I did my law. Both the areas are not related to this industry. Howsoever, I use this knowledge in my business on a day-to-day basis.
RR: In the early eighties, was it difficult to overcome the traditional patriarchal mindset?
AS: A little bit from elders in the family, but on the whole, no. Honestly, being a woman has been an advantage as far as I am concerned. This is a rare thing but I got a lot of support from the family, fraternity and my staff. In fact, I don’t recall encountering any major issues being a woman.
RR: When you started the pre-press unit with a Crosfield scanner, what was the rationale?
AS: We were running an advertising agency and used to do a lot of printing work for our customers. One customer was a well known cycle brand. We got a job that had 300 inputs and cut-outs of cycle parts. The only option was to go to Thomson Press. The catalogue was to be delivered to a trade fair. Thomson Press said it would take three months to produce the job. That too in Italy. Since no one in India had the capacity. We approached other print firms in Delhi who could do a good print job but hardly anyone could create the pre-press for the job. That is when the idea took germ - and we thought it was the best option for us. It wasn’t a problem because the capital required for the investment was small. And so, we started as a small-scale unit.
RR: In those days who were your clients?
AS: Initially, most of the printers in Delhi were our customers plus a lot of advertising agencies also. Then we decided that we will not do repro for others - and that we would do our own printing.
RR: Why?
AS: Since every time we gave a set of proofs or positives, the printer would not produce the job properly. On cue, the client would start complaining. It was difficult to sort out the issues between pre-press and printing. That’s when we decided to do both the things. So, one day we stopped working for printers.
RR: What was the size of IPP that time?
AS: We started with ten people. We started as a small scale unit because in those days the limit was Rs two lakh. We got the scanner. But couldn’t put a processor in that project. So we had to put up another project to install the processor to support the scanner.
RR: It seems to be a very basic unit. And today you have 300 top-end print firms as your clients.
AS: Yes. In 1985 we shifted from a DDA shed to our unit in Okhla. By then, IPP was a well-known pre-press brand. In those ten years we mastered the craft of retouching, image-manipulation, understanding colours, and the series of changes in pre-press. We got a scanner, then a dot generating scanner, then a table-top Scitex scanner. Technology was evolving. And that’s the thing we realised. That we had to revamp and invest in a new equipment once in three years. That is the pace of this industry.
RR: Were the technology decisions based on a business model?
AS: I think, our timing was good. When we installed the first machine, the technology was at its cusp. One of the Delhi printers said "now that you’ve got your machine, I will not give you work". I said, "Fine, I will not ask for your work. I will print what I process." We got three sheetfed presses one year. A four-colour, a five-colour and a six-colour press. And we stopped doing work for other printers. That’s it. As simple as that.
RR: What is interesting is, you are one of the rare instances of a pre-press house that moved into printing.
AS: We got out of pre-press very early. The timing was right. Many people tried to do it later. Some went into areas like digital, wide-format, flexo, gravure. Everyone is doing well. For us, as I mentioned, it was the right time. We sold our scanners at a very good price. Most people kept it for so late that they had to scrap them. When we sold the drum scanners we got more than Rs 20 lakh for them.
RR: Looking at IPP’s trajectory, it seems like bursts of ten years to make a big move. Again after ten years at Okhla, you were consolidating and creating the foundation for the Noida unit.
AS: Definitely. At that time we were doing short-run commercial jobs with quick turn-around and high value addition. So even if the place was small, our margins were good. Our Okhla unit funded this project. We kept it running for three years.
RR: And so that small press was supporting the Noida infrastructure for three years?
AS: We were small but profitable. Yes, and when the Noida unit got going, we shifted some of the equipment here. We had three small-sized machines. That was all. Then we shifted our sales and production planning teams. We were - and are - fortunate to have a great team.
RR: Why so?
AS: We performed quite well in that tiny slot. Today we can’t do that kind of work. Today we are in the long-run segment but at that time we could do a quick turnaround. We could do 30 plate changes on each machine in 24 hours. With three machines we could print 90 sets. These were jobs like visual aids which were popular in those days. Plus short-run jobs of 200 to 500.
RR: What kind of margins existed in those days?
AS: Very good margins. Today we cannot get those rates. And at IPP the margins are smaller because we are doing longer runs. Interestingly enough, most of the printers in Okhla and Noida have made money from real estate and not from print.
RR: This is something we detected in Mumbai. That 30%-40% of cash flow has been driven by property. Is that the norm here?
AS: A definite yes in the city. Of course it cannot support the IPP kind of infrastructure that you see in this plant. We bought this land in 1997. At that we were looking for 2000 square metres. When we met the Chairperson of NOIDA Authority, she said the only space available is in Phase II and that we could take as much as we deem fit. So when we came to see the space, my husband said: "Let’s take all of it." We took it and people in the industry laughed. Nobody could imagine what we could do with the space. Land in this area was inexpensive. And then NOIDA grew. The Expressway got built and land prices rose exponentially, a hundred-fold.
RR: With the land appreciation in NOIDA, does it justify this sort of investment in land?
AS: There is appreciation. But then we can’t run a press unless we have this kind of space. The print business is very space intensive. Please understand, without this kind of land we cannot run this plant to its optimum ability. Unfortunately, this is a terribly capital intensive industry. Real estate, plus the equipment, plus the technology. You have to pump in money all the time.
RR: This is eight acres of land.
AS: Yes. We built the first building in the first phase in 1999. And two years later, we did the second building. We have space to construct another two buildings -- a million square feet in all. The main thing is to create a proper workflow. Like we had planned for two machines. But within two years we had four machines. So we shifted the machines. Like two years ago, we separated our processes. And so, building one has only packaging and building two does commercial production. The two divisions are run as separate businesses.
RR: Is it easier to create a plant today? Wherein a print firm in India has a reference point? Or is there greater advantage as a first mover?
AS: We picked up a few points from German units that we visited. Otherwise there were not many reference points. In fact people wondered how we would manage a plant of this size. And everyone advised against a combined unit: commercial and packaging. There is no background of a packaging unit with commercial printing. But I was very confident of our slot in commercial printing. I did not want to kill that. I was clear that it would sustain the packaging operation till it could stand on its own feet. Now both are independent.
RR: At the turn of the century, what was the employee strength and the team?
AS: A team of 150.
RR: During this period you added machines and people? When did you become serious about packaging?
AS: In 1997, we were doing commercial printing. Quite obviously we wouldn’t have grown as we grew in packaging. So we thought that if we have to grow, we have to do something with a repeat value. Packaging was the obvious answer. In those days it was difficult. It took us five years after the equipment was installed to have access to a big multinational FMCG company. They asked for our background but we had no background in packaging. It was a piquant situation. Do you put the cart before the horse or the horse before the cart? I said if you give us work we will have a background. Finally we went and met the purchase head at this FMCG major. I had gone to him before we had put this plant. He said " plant banao toh sahi, phir dekhenge". After three years the plant was up and running. I went to him. He said "Let’s see. To start with, do our label work". I said I am not going to do labels. If you want to give us serious packaging work then it is fine, otherwise no. Saying so my team and I walked out from there. This was the turning point. Today major FMCG customers are with IPP. We’ve added each year. Clients find merit in working with us.
RR: This was in 2003? Right? That’s pretty recent.
AS: Even prior to 2003 we had work but it was our preferred kind of work. But in packaging what one can do is, fill up capacity. That’s because there is a lot of work available. So we took up work with local customers. Then when we got entry into target customers we stopped doing low-grade work for packaging. We focused on value-added work. Three things became vital for us: delivery, timing and right kind of technology. I believe, without equipment and timely delivery there is nothing. Job fulfillment is important. It is more important than getting the job. Delivering the final product and getting a repeat order is actually the key.
RR: What percentage of your group of customers are repeat customers?
AS: More than 80% of them. We believe in long-term, and enduring relationships with our clients.
RR: Does packaging have the biggest barriers for entering in lieu of the certifications and audits?
AS: Yes, very much. Every year we go through two audits per customer. So it’s essential to have high quality infrastructure. It’s not merely about installation of equipment. There are ethical and social audits, and other audits related to hygiene standards. Specially for export customers. Now domestic clients have similar requirements. So audits are very important.
RR: There was a time when any machine which couldn’t print a premium job on art paper would be used for packaging.
AS: True. That’s why I say starting a unit is the onerous part. The other thing is a constant focus on innovation and cost. Innovation for innovation’s sake, production for cost’s sake. There is a popular view in our industry that anybody who is unsuccessful in commercial printing thinks he can do packaging.
RR: IPP has done a 360 degree integration. What does that mean in real terms?
AS: We are growing in two segments. Consciously we get into jobs which involve a hybrid of both segments. We give services to our customers for all kind of print production. And that is how we have evolved into a 360 degree supplier. The thing is, if your delivery is good, then you don’t need anything else. In fact I would say that in this business, relationships matter as long as you can deliver.
RR: How does your ERP work?
AS: We have a customised ERP in place. We have integrated all the departments from enquiry, estimate production planning, production to invoicing. Everything is integrated. This was put into place a few years ago. It was a task. We keep modifying it. We have an in-house developer. We also have outsourcing in place for IT. And it’s been managed well. We keep updating it from time to time, from platform to platform.
RR: You got your first web offset in 2004.
AS: Yes, we got it for one of our magazine customers. Those days we were doing pre-press processing for them. We started printing the first two dummy issues for them and then the volume got beyond our capacity. In 2003 we decided to install a web press so that we could start printing. We got the first press in 2004, the second in 2006 and the third in 2008 which is the recent one.
RR: The machine scalability seems to match the balance sheet which rose from Rs 150 crore to Rs 200 crore to Rs 250 crore …
AS: We have been adding almost one sheetfed machine on an average every year. And when you add a printing machine you have to add complementary kit like finishing too. Last two years we did not do much expansion after the Komori heatset press. And so, in FY10-11 we bought three machines; a six-colour with coater, a five-colour with coater and one two-colour perfector, all brand-new.
RR: IPP has the largest installation of Manroland presses in South Asia. Any particular reason for endorsing Manroland?
AS: People thought we were buying manroland due to the family affiliation. However we continue to buy Manroland even though the affiliation is not there since the past four years. Interestingly enough, we have placed an order for 15 brand-new units of Manroland this year. I feel that if I get into certain product or equipment and if it works then I would to prefer to continue with it for my own advantage. This is because my operators are familiar with it, the inter-changability of the presses, plates, paper. Basically, life becomes easier for us. Easier to handle breakdowns. Imagine, if I have six printing machines of six different brands, it gets very tough. It has nothing to do with Manroland. If I had started with Heidelberg I would have been with Heidelberg. It’s convenience. For the Komori, we got a very good price. At that time Harris (now Goss) was unviable. Now may be both are at the same level. in addition, we have two Solna presses that we have recently refurbished.
RR: So if you buy a new sheetfed machine you would buy a Manroland and if a new heatset web then a Komori?
AS: Only if the loyalty to a brand is to our advantage. But we can always change. For example, we have several lines of equipment from Bobst. But this time we have gone for a Yoco die-cutter and a Paktek folder-gluer. And so, if it suits us and if the pricing is right, we can change.
RR: A walk around the press indicates that the IPP pre-press team is strong and creative. And they back your press-lines...
AS: Yes. Pr-press has two roles. For packaging they have product development, structural development, formulation of special inks. In fact for the special inks, we have in-house ink kitchens where they develop their special colours, create proofs and get it approved from the customer. Commercial jobs involve more of colour corrections, whereas most of the publication jobs involve text correction. This is in spite of the fact clients saying we would get print-ready files. But there is always a lot of correction that has to be done. Lot of colour correction, re-touching, image manipulation, digital proofing and colour matching on the machine. Our pre-press team is on the machines to re-check what they produced in the pre-press department. The point is, we are traditionally a pre-press house - and it reflects on what we print. It is the hallmark of our quality.
RR: How much of hand-holding is required? Especially in packaging?
AS: Initially yes. But most of the multinational customers are aware of what is required. May be the smaller customers or some new customers would need hand-holding. In the publication section I would say, whenever a new magazine starts to print at IPP, we send our personnel to their place, see how their files are prepared or rather show them how we want them. At times, we get the colour corrections done at their end and do a bit of work. This means when the file comes to our end it is ready for production. This is required.
RR: How do you update the customers in terms of a new version of a software or hardware you’ve invested in? How does this get translated?
AS: Customer’s production people are at IPP all the time. This is one of the advantages of being in Delhi, rather than at Baddi or Haridwar. They supervise the job. We send them regular updates. These days customers are quite aware about technology. It is imbibed, simultaneously. Or even without the customer knowing it, we use it and then show them the difference between what we used to do and what we are now capable of doing. And good things are always appreciated.
RR: What is staggering is to see the number of people working at IPP; and the scale and size of the operation. What is your method when you plan?
AS: It’s different for different people but for me I can say I would look at the goal and mark a period through which I would like to get there. After which I work on it year by year in a focused way. It is not something that can be done overnight. Also be aware of the technology, at all times. You cannot plan what you want to do in five years, because it is difficult to predict the slings and arrows of technology shifts. So you have to keep reassessing. We have changed courses many times to accommodate technology as well as customer demand.
RR: Is that why you invested in die-cutting from day one?
AS: Yes. I think outsourcing in India is a very tough job. May be in Mumbai, the printers work that way but that is because of Mumbai’s space and logistical issues. For us, it was very difficult to outsource. So today we do our own dies, our own pre-press, our own printing, finishing, even ink mixing. In fact we even produce the shipper cartons in which our production is sent out. Before this interview, I was talking to an export customer and he was talking about home-made pallets and I said ‘Yes, we do make our own export-quality pallets’.
RR: What about the cost of producing in-house?
AS: If the volumes are there, it is manageable.
RR: IPP produces 100 magazines plus another 20 book customers, and 80-100 customers in packaging. Together that’s 200 odd plus customers plus their jobs. In terms of organisation, how does it work?
AS: We’ve a separate marketing division for packaging and for commercial printing. Also we have dedicated resources for the export business. We have a separate PPC team for each business that coordinates purchase and production. It works well. We’ve co-ordinators who handle customers. Each of these handle about five to six assigned customers and push the order through the plant in co-ordination with the sales team.
RR: You’ve been in the print business since the 1980s. Has is become easier to do business in India?
AS: Definitely. Today, there is a lot of change and especially in how the foreign customer sees us. It’s much better. Mainly, there is an ease of doing work. Plus there is a business awareness. Earlier it wasn’t there. Learning and information sharing was much harder then.
RR: If I met you in 2015 or 2020, what change would I see?
AS: It’s easier to say you have a goal and want to get there. May be after two years I would like to see ourselves as creating something very different. May be IPP will not remain a printing company. We may be a big multi-locational printing company. IPP has evolved with time. We are a highly dynamic organisation. I would like to see IPP grow three times in size by 2015.
RR: Do you take work home? What is your management mantra?
AS: No. This business is about teamwork so work gets done in office. My management mantra is that each person in the company must have a strong sense of ownership. Unless there is ownership it’s very difficult to be successful. The owner’s personal input is just as important in this industry as is professional management. Because there are hundreds of instantaneous decisions required and unless those are taken on time, one cannot deliver.
RR: What about de-centralisation at IPP?
AS: For everything there is a system in place. But spontaneous, dynamic and efficient decision-making is necessary. In the end there has to be one person who should be able to say a "yes or a no". One Delhi printer asked me "How do you do so many things? And why do you think you have to here from 9 to 5?" I said that small decisions need to be taken. No professional will take these decisions independently unless he is told to go ahead. And if there are two to three people discussing it, then we are losing a lot of money every minute. He agreed amd narrated a story: "even in my press, our scanner was malfunctioning because the bulb was fused. And nobody was authorised to buy a bulb without a bill and the bulb was not available with a bill." This was a few years ago. printer said, "We outsourced our scanning jobs worth Rs 25 lakhs from outside till a bulb worth Rs 25,000 could be sourced." Just because no one was authorised to take such a decision. Imagine, the printer had to get the work produced outside but not buy the bulb. This is a true story from our industry.
RR: In this sense, what is your view of the industry today?
AS: Last 15 years things have changed a lot in the industry for good. Some of the smaller presses are doing good, niche work. And even with small runs, they are doing profitable jobs. Plants with good infrastructure and planned investments have come up, there is better planning.
RR: Is there something that bothers you?
AS: People in the business should learn finance. That is, taking a serious look at cost of capital that impacts margins. What they do is focus on the value-added, not the fixes and replacement costs. They say ok my product costs Rs X - and I am selling it. But they won’t consider the basic infrastructure cost, the machine cost. No doubt the printer is profiting but tomorrow that profit would not be good enough to replace the assets. This mentality is prevalent because people don’t understand or do not pay due attention to various aspects that matter which is why there is so much under-cutting. Most printers are unable to accurately estimate their costs.
RR: So what you’re saying is, print firms get a machine and they want to run it and they want to run in any which way.
AS: Yes. And they just want to keep it moving. I think this is not the correct way. There was a time when very few people bought new machines. Today there are many. But some of them are going wrong as they are new entrants to the industry and they don’t know the rules of the game. It’s not always necessary to purchase a brand-new imported kit at high cost. Lots of good local equipment is coming in. I think Welbound is manufacturing good binding machines. There are lots of overall improvements, plus a lot of consolidation. We need more players in India who can manufacture.
RR: Like the Chinese?
AS: True. I think in India printers could be united and get a large job. If five printers people together can handle a large job India could become a very big print production hub. We can become a big export hub if we get together. There was one tender which we were quoting for and the guy came to me and said we want a printer with a Rs 20 crore turnover. This was a few years ago, and they couldn’t find many printer in Delhi who met this criteria. Either people were not doing that much work or if they were, they weren’t doing it officially. It is a very sad state of affairs. There is no harm in being small if you are self-sufficient and comfortable. The other thing is, the size of our industry in terms of number of players is large but turnover wise it is not that large as compared to other industries. We feel we are one of the largest in our industry but in comparison to other industries, this scale is insignificant.
RR: So? Will the scalability keep rising from here on?
AS: It will. We have to. Just to sustain what we are doing, we have to.
RR: What are your future growth plans?
AS: We are looking at another location.
RR: In North India?
AS: Maybe not. Probably elsewhere. We are working on our strategy. Watch this space.
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Rishabh Singhvi updates us with a message from the London Book Fair on his Blackberry
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IPP’s plant at Noida
