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TRANSCRIPT
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STUDY ON POTENTIAL OF
INDIAN PRINTING & CONVERTING SECTOR WITH RESPECT TO ITALIAN COMPANIES
PENETRATION FOR MARKET SHARE
PREPARED FOR :
Italian Trade Commission115, Maker Chambers
11th Floor, Nariman Point MUMBAI – 400 021 (INDIA)
PREPARED BY :
MITCON CONSULTANCY SERVICES LTD.1st Floor, Kubera Chambers, Shivajinagar
PUNE – 411 005
AUGUST, 2008
TABLE OF CONTENTS
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CHAPTER - 01 Introduction
CHAPTER - 0 2 Printing & Converting Machinery
CHAPTER - 03 Printing & Converting Machinery Industry in India
CHAPTER - 04 Market Potential in India
CHAPTER-05 Survey Findings
CHAPTER-06 SWOT Analysis
CHAPTER -07 Building your Presence in India
CHAPTER-08 Conclusion & Recommendation
CHAPTER - 1INTRODUCTION
1.1 BACKGROUND OF THE ASSIGNMENT
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The Italian Trade Commission (ITC) has appointed MITCON
Consultancy Services Limited, Pune to study the potential of Indian
printing & converting sector with respect to Italian Cos.’ Penetration for
market share.
The Client wants to have an assessment of the current scenario of the
Indian printing & converting machinery industry and also wants to know
the scope for the Italian business to enter into the Indian Market.
1.2 ABOUT MITCON CONSULTANCY SERVICES LTD. MITCON, an ISO 9001 company, established in 1982, is a Technical
Consultancy Organisation which is a joint venture of leading financial
institutes ICICI, IDBI, IFCI; major State Corporations like SICOM,
MSFC, MIDC and nationalised banks in India.
MITCON to its credit has successfully completed more than 1000
assignments on Market Surveys, Techno-Economic Feasibility
Reports, Detailed Project Reports, Appraisals, Foreign Collaborations,
Evaluation Studies, Socio-Economic Studies etc. for Government of
Maharashtra, Government of India, Private Corporate & SMEs.
.
1.3 OBJECTIVES OF THE STUDY The objective of the study is to study the potential of Indian printing &
converting sector with respect to Italian Cos.’ Penetration for market
share.
1.4 SCOPE OF THE STUDY
The scope and coverage of the Survey includes following:
To study current status of the Indian companies, foreign wholly owned
Indian Companies producing printing & converting machinery
To study current status of the Indian printing & converting industry,
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To find out the areas where the Italian companies producing Printing &
Converting Machinery could enhance their presence in broad/sub
categories/products in the Indian user industry,
Statistical data which would enable the Italian companies understand
the;
o Actual production of printing & converting machinery in India
(Quantity Nos. & Euro)
o Actual imports of printing & converting machinery in India
(Quantity Nos. & Euro)
Future projections (next 3 to 5 years) of where the Indian printing &
converting industry could be in terms of technology used.
Listing major agents with their names and principals for printing
machinery (imported/local- Indian) as applicable.
The mode of entry and way of establishing presence in India for the
Italian Printing Machinery manufacturers to be facilitated depending on
Research data. It could be by way of
Through Agent
Branch Office
Joint Venture
100% Owned Indian company (Indicating transfer pricing norms in
detail)
Manufacturing machines under licensing
A & M’s (Acquiring Procedure)
Information regarding the following:
o Fiscal Benefits under EOU Policy / Exports
o Capital Equip producing capacity in India
o Indian companies looking for collaborations / Joint Ventures
(based on Research)
To study Price structure of Machines (Local / Foreign)
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Procuring practices generally followed by Indian Private/Government
companies.
1.5 RESEARCH METHODOLOGYBoth the Desk Research and Field survey (using structured
questionnaire) methods are used to obtain the information from the
respondents.
Desk Research Through Desk Research, we have collected the data from our Internal
Database, the Published Literature, News items, and Company
Reports, Publications (National / International), Information available
with respective Industry Associations etc.
Field Survey MITCON has interviewed the various Indian Machine Manufacturers,
Distributors / Dealers ,End Users of Machinery ( Printing Units ) &
Associations from Printing & Converting Sector with structured
Questionnaires & Check Lists covering the scope of the study using in-
depth face-to-face Interview method.
The Geographical locations covered under study were Mumbai, Delhi,
Chennai, Bangalore, Kolkata, Hyderabad & Pune.
Data Analysis The data collected from Field Survey and Desk Research has been
analyzed to draw meaningful conclusions.
* * * * * * * * * *
CHAPTER - 2PRINTING & CONVERTING MACHINERY
2.1 PRINTING MACHINERYPrinting is a process for reproducing text and image, typically with ink
on paper using a printing press. It is often carried out as a large-scale
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industrial process, and is an essential part of publishing and
transaction printing.
Modern printing technology:
Across the world, over 45 trillion pages (2005 figure) are printed
annually.
[Source: http://h20325.www2.hp.com/blogs/scaglia/archive/2007/08/30/4314.html]
In 2006 there were approximately 30,700 printing companies in the
United States, accounting for US$112 billion, according to the 2006
U.S. Industry & Market Outlook by Barnes Reports. Print jobs that
move through the Internet made up 12.5% of the total U.S. Printing
market last year, according to research firm InfoTrend/CAP Ventures.
Common Techniques of printing include:
Relief print (letter press), mainly used for the printing of
catalogues
Offset printing is the mostly used Technique today. Books and
newspapers are printed today using the technique of offset
lithography.
Rotogravure mainly used for magazines and packaging
Screen printing for T-shirts to floor tiles
Pad printing for applying a flat image on a curved substrate
Inkjet used typically to print a small number of Books or
Packaging, and also to print a variety of materials from high
quality papers simulate offset printing, to floor Tiles; Inkjet is also
used to apply mailing addresses to direct mail pieces.
Flexography used for packaging, labels, newspapers
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Laser printing mainly used in offices and for transactional
printing (bills, bank documents). Laser printing is commonly
used by direct mail companies to create variable data letters or
coupons, for example.
2.2 CONVERTING MACHINERYConverting Machinery is used in the process of value-added converting
of paper, paperboard and plastic film in the primary converting
industries of flexible packaging, unprinted rolls or sheets, labels,
cartons and printed electronics.
* * * * * * * * * *
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CHAPTER 3PRINTING & CONVERTING MACHINERY
INDUSTRY IN INDIA
3.1 PRINTING & CONVERTING MACHINERY INDUSTRY IN INDIA - CURRENT SCENARIO
3.1.1 Views of All India Federation of Master Printers (AIFMP)
The All India Federation of Master Printers (AIFMP) is an apex body,
recognized by the Government of India, established in the year 1953.
AIFMP draws its strength from 52 regional associations spread all over
the country; which are affiliated to the AIFMP.
Status of the Indian Print Industry :
More than 160,000 Printing Presses in active operation in India.
Employment: 1.6 million work force.
Education Infrastructure: 18 Printing Engineering Colleges,
Several diploma schools and many print training institutions.
Educated People: Over 2000 Printing Graduates every year.
Indian Printing Industry has been considered as one of the
largest industries, with the growth of 12.5%.
Projected Growth of Indian Printing and Packaging Industry
combined for 2007-08 is 14%.
Projected Growth of Indian Label Printing Industry for 2007-08 is
18%.
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3.1.2 Views of National Printing Equipment Association (NPES)
NPES - The Association for Suppliers of Printing, Publishing and
Converting Technologies, is a trade association of over 400 companies
which manufacture and distribute equipment, systems, software,
supplies used in printing, publishing and converting.
The Association was founded as the National Printing Equipment
Association in 1933. The 26 charter members included manufacturers
of printing presses, bindery equipment, typesetting machinery and
specialty equipment.
Today NPES represents Manufacturers, Importers and Distributors of
equipment, supplies, systems and software used in every printing,
publishing and converting process from design to distribution. Virtually
all industry products and processes are represented by the member
companies, which range in size from under US$1 million in annual
sales revenue to more than US$1 billion.
Indian Printing Industry Scenario:
Print industry growth outpaces GDP growth since 1989.
Printing and Packaging Industry compound annual growth over
14%.
More than 150,000 printing presses in operation in India.
Capital investment of over US$2 billion.
Employs directly / indirectly over 1.5 million people.
Indian Packaging Industry Scenario:
The Indian Packaging Industry worth US$2 billion.
Indian packaging output grew by around 18% in 2003.
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Today, most basic raw materials required for packaging Industry
i.e. Paper, Board, Plastic, Glass, Metal etc. are easily available.
Growth rate varies -5% in some sectors to 20% in sectors like
Flexible Packaging (Developed Countries average: 3%)
Over 40% of Export by Small / Medium Sector where Packaging
Industry has major presence.
3.1.3 Views of Indian Printing, Packaging and Allied Machinery Manufacturers' Association (IPAMA )
IPAMA, founded in 1991, the acronym for Indian Printing, Packaging
and Allied Machinery Manufacturers' Association is an independent
organization serving the needs of the printing, packaging and allied
industries in a rapidly changing marketplace.
As a registered apex body under the Societies Registration Act, IPAMA
is dedicated to disseminating information on the state of the
Technology, Market perspectives and various developments taking
place around the world, relevant to the Indian printing packaging and
allied industries through its bimonthly journal "IPAMA BULLETIN".
Status of the Indian Packaging Industry:
The Indian packaging industry is growing at 14%-15% annually.
This growth rate is expected to double in the next two years.
The turnover of the packaging industry is estimated at Indian
National Rupees (INR) 150 Billion (equivalent to Euros 2.2
Billion).
The Indian fascination for rigid packaging remains intact. It is
estimated that more than 80% of the total packaging in India
constitutes rigid packaging, which is the oldest and the most
conventional form of packaging. The remaining 20% comprises
flexible packaging.
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Rigid packaging constitutes glass bottles, metal cans, aerosol
cans, battery cell cans, aluminum collapsible tubes, injection
moulded plastic containers made of PVC, PET, HDOPE, barrels
made from HOPE, paperboards, and corrugated boxes.
With the expanding middle class and rising income levels, the
patterns of consumption are bound to change substantially and
the demand for quality and convenience-based products will
increase.
3.1.4 Views of Indo-Italian Chamber of Commerce and Industry
According to a report 'Overview of the Engineering Sector in India',
April 2007 published by the Indo-Italian Chamber of Commerce and
Industry, Mumbai, printing machinery industry in India is growing and
yet is dependent on imports.
Here are some points highlighted in the said report:
Printing Machinery (for print media)
India has more than 130,000 printing presses by the end of
2005.
Though demand for printing machinery in India for FY06 is
around €157.9mn (US$249 Million or INR 10140 Million, i.e.
approx. Rs. 1015 Crores), production of printing machinery for
that duration is valued at €51.78mn (US$81.65 Million or INR
3325 Million, i.e. approx. Rs. 332 Crores).
The requirement met through imports is in the order of about
€92.47mn (US$145.80 Million or INR 5938 Million, i.e. approx.
Rs. 594 Crores).
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The sector that is driving the demand for printing machines is
the Indian newspaper industry with a turnover of €1.37 billion
(INR 88 Billion, i.e. approx. Rs. 88,000 Million) in 2004, which is
growing at a CAGR of 6.9% during 2000-04. This industry has
attracted capital investment of €1.70mn (INR 109 Million, i.e.
approx. Rs. 11 Crores) in two years by the end of 2004.
The Indian media industry is undergoing a modernization
process in order to gain from these growth opportunities. In this
process they have realized the need for technically advanced
printing machinery to achieve success in the tough competition.
Since the machinery manufactured in India is not meeting their
requirements many newspaper/media companies are importing
them from Europe and Japan.
The Indian printing machine manufacturers are not equipped
with the latest technology hence large demand is catered
through imports.
Recently the print media has been allowed for 100% foreign
direct investment and as a result the foreign print media
companies are attracted towards India. This may further
increase the growth in the demand for printing machines.
3.2 PRINTING & CONVERTING MACHINERY INDUSTRY IN INDIA – PRODUCTION AND IMPORTS
3.2.1 Production
According to the AIFMP, the Indian printing machinery market was
valued at US$ 402.4 million in 2006. This is forecasted to grow from
US$ 465.30 million in 2007 to reach US$ 992.30 million in 2012, at a
compounded annual growth rate (CAGR) of 16.4% for 2007-12.
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3.2.2 Imports
Actual Imports of Printing & Converting Machinery in India (Quantity &
Value)
Import of Printing Machinery in India
Printing Machinery Imports are rising.
Values in US $ Million
Commodity HS Code
2001-02
2002-03
2003-04
2004-05
2005-06 2006-07
Offset Printing Machinery – Reel Fed
844311 12.81 9.08 4.60 12.41 72.38 59.72
Offset Printing Machinery – Sheet Fed
844312 1.01 0.62 3.31 12.14 5.65 3.91
Flexographic Printing Machinery
844330 0.42 1.02 4.32 4.68 3.81 22.60
Gravure Printing Machinery
844340 4.44 2.94 3.69 7.63 2.80 12.01
Other Offset Printing Machinery
844319 21.92 19.93 22.64 51.72 45.11 90.64
Total Imports 40.60 33.59 38.56 88.58 129.75 188.88Source: Ministry of Commerce, Government of India, (Export Import Databank)
As % of total Printing Machinery Imports
Commodity HS Code
2001-02
2002-03
2003-04
2004-05
2005-06 2006-07
Offset Printing Machinery – Reel Fed
844311 32% 27% 12% 14% 56% 32%
Offset Printing Machinery – Sheet Fed
844312 2% 2% 9% 14% 4% 2%
Flexographic Printing Machinery
844330 1% 3% 11% 5% 3% 12%
Gravure Printing Machinery
844340 11% 9% 10% 9% 2% 6%
Other Offset Printing Machinery
844319 54% 59% 59% 58% 35% 48%
Total Imports 100% 100% 100% 100% 100% 100%
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Import of Printing Machinery in India – Major Countries from where India had imported
Commodity: 844311 - OFFSET PRINTING MACHINERY REEL FED
Values in US $ Million
Country 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07Total Commodity
12.81 9.08 4.60 12.41 72.38 59.72
China P RP --- --- --- -- 1.16 2.70France 2.94 3.94 0.27 4.16 17.56 21.28Germany 9.52 4.49 0.1 6.99 51.09 15.13Japan --- 0.14 3.23 0.09 0.23 14.90Australia --- --- --- --- --- 1.17UK --- --- 0.01 0.27 --- 1.57USA 0.29 --- 0.11 0.25 1.66 1.12Italy --- --- 0.01 --- --- 0.45Spain --- 0.45 --- 0.49 0.67 ---
Offset Printing Machinery - Reel Feed, import figures shows a fluctuating
trend.
In 2006-2007, Offset Printing Machinery - Reel Feed, imports are contributing
to about 32% of the total printing machinery imports.
India imports mainly from France, Germany and Japan. In fact, France has
been consistent in the last 6 years and challenged the dominance of
Germany. Japan had also grown significantly.
China is emerging as new competitor.
Italy has very little presence in this category (OFFSET PRINTING MACHINERY REEL FED) when Indian Printing Machinery Imports are considered.
Import of Printing Machinery in India – Major Countries from where India had imported
Commodity: 844312 - OFFSET PRINTING MACHINERY SHEET FEDValues in US $ Million
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Country 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07Total Commodity
1.01 0.62 3.31 12.14 5.65 3.91
Germany 0.47 0.29 2.47 4.40 1.13 2.21Japan 0.12 0.16 0.81 7.46 4.44 1.06
Offset Printing Machinery – Sheet Feed, import figures shows a fluctuating
trend, albeit a decreasing one in last two years.
In 2006-2007, Offset Printing Machinery – Sheet Feed, imports are
contributing to only 2% of the total printing machinery imports.
India imports mainly from Germany and Japan. In fact both the countries have
been consistent in the last 6 years.
Italy has no presence in this category (OFFSET PRINTING MACHINERY SHEET FED) when Indian Printing Machinery Imports are considered.
Import of Printing Machinery in India – Major Countries from where India had imported
Commodity: 844330 – FLEXOGRAPHIC PRINTING MACHINERY
Values in US $ Million
Country 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07Total Commodity
0.42 1.02 4.32 4.68 3.81 22.6
Brazil --- --- --- 0.04 0.91 0.12China P RP --- --- --- --- 0.75 4.28Germany --- --- 3.46 0.83 0.02 4.43Japan --- --- --- --- --- 1.12Singapore --- --- --- --- 0.09 4.68USA --- 0.39 0.35 0.82 0.40 0.47Italy 0.19 0.37 --- --- 0.01 2.58Netherlands --- --- --- --- --- 1.56UK 0.08 --- 0.24 0.69 0.40 1.14Spain --- --- --- 0.62 ---Switzerland 0.15 0.13 0.25 1.69 0.48 0.43Flexographic Printing Machinery, import figures shows a growth trend. Rather
it had shown an explosive growth in the year 2006-2007.
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In 2006-2007, Flexographic Printing Machinery, imports are contributing to
about 12% of the total printing machinery imports.
India imports mainly from Germany, USA, UK, Italy and Switzerland.
Switzerland is loosing its share to other emerging competitors.
Singapore and China are emerging competitors. Others to watch include
Japan, Netherlands.
Italy has been supplier to India in this category (FLEXOGRAPHIC PRINTING MACHINERY).
Italy has lesser presence in this category (FLEXOGRAPHIC PRINTING MACHINERY) when Indian Printing Machinery Imports are considered.
Import of Printing Machinery in India – Major Countries from where India had imported
Commodity: 844340 – GRAVURE PRINTING MACHINERY
Values in US $ Million
Country 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07Total Commodity
4.44 2.94 3.69 7.63 2.80 12.01
China P RP --- --- --- 0.48 0.14Germany 0.09 0.11 0.04 0.61 0.54 0.94Korea RP 1.49 0.01 --- 0.01 2.19USA --- 0.69 0.17 0.20 0.37Italy 3.84 1.21 2.02 5.99 1.46 6.03Israel --- --- --- --- --- 1.54UK --- --- 0.16 0.12 0.03 0.13Japan --- --- 0.55 0.02 0.01 0.30Gravure Printing Machinery, import figures shows a growth trend except
2005-06. Rather it had shown an explosive growth in the year 2006-2007.
In 2006-2007, Gravure Printing Machinery, imports are contributing to about
6% of the total printing machinery imports.
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India imports mainly from Italy, Germany, and Korea RP.
Emerging countries to watch include Israel.
Italy has been the predominant supplier to India in this category (GRAVURE PRINTING MACHINERY). Italy has very strong presence and contributes more than 50% of the total supplies.
Recently, this dominance of Italy has been challenged by the competitors. Last consecutive two years had seen a decreasing trend in Italy’s contribution in total exports – the matter of concern!!!
Import of Printing Machinery in India – Major Countries from where India had imported
Commodity: 844319 – OTHER OFFSET PRINTING MACHINERY
Values in US $ Million
Country 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07Total Commodity
21.92 19.93 22.64 51.72 45.11 90.64
China P RP 0.45 --- 0.36 0.03 0.38 2.29Germany 9.93 10.08 11.02 28.52 24.02 47.21France 0.06 1.87 0.23 0.16 0.07 6.50Italy 0.93 1.79 0.15 0.28 0.01 1.48Czech Republic
0.53 0.33 0.59 1.37 1.39 0.82
UK 1.64 0.80 0.86 0.51 1.01 1.98Japan 5.27 2.41 7.21 12.54 12.18 20.45Taiwan 0.55 0.40 1.10 1.06USA 0.98 1.52 0.72 2.50 1.61 3.83Australia 0.36 0.24 0.09 0.50 1.08 0.73Spain 0.62 --- --- 2.24 0.07 0.12Other Offset Printing Machinery, import figures shows a growth trend except
2005-06.
In 2006-2007, Other Offset Printing Machinery, imports are contributing to
about 48% of the total printing machinery imports. (This might be the second
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hand or used machinery imported in the country). A lot of suppliers indicate
very competitive market.
India imports mainly from Germany, Japan, Czech Republic, USA, UK, and
France. Germany and Japan dominates the second hand import markets.
Interestingly, France has shown significant increase in 2006-07.
Emerging countries to watch include China.
Italy has been supplier to India in this category (OTHER OFFSET PRINTING MACHINERY). Italy has very little presence in this category.
3.3 PRINTING & CONVERTING MACHINERY INDUSTRY IN INDIA - PROJECTIONS
3.3.1 Views of AIFMP
According to AIFMP, Indian Printing Industry has been considered as
one of the largest industries, with the growth of 12.5%. The projected
growth rate of Indian Printing and Packaging Industry combined for
2007-08 is estimated at 14%.
According to the AIFMP, the Indian printing machinery market was valued at US$ 402.4 million in 2006. This is forecasted to grow from US$ 465.30 million in 2007 to reach US$ 992.30 million in 2012, at a compound annual growth rate (CAGR) of 16.4% for 2007-12.
The Indian printing market has consistently outpaced GDP growth over
the past 15 years. Printing has now reached international standard in
end uses such as newspapers, books, catalogues, packaging products
and other publications such as coffee-table books.
The Indian printing market was valued at US$ 12.6 billion in 2006. This
is forecasted to grow from US$ 14.12 million in 2007 to reach US$ 25.1
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billion in 2012, at a compound annual growth rate (CAGR) of 12.2% for
2007-12.
Including printing equipment, ink, and the consumables, the entire print
sector in India was valued at US$ 13.5 billion in 2006 and is forecast to
reach US$ 27.2 billion in 2012.
According to AIFMP, the industry (market values at present and
estimates) projections are as shown below:
India’s Print and Allied Items: Market Value, 2005–2012 (In US$ Million)
Source: The All India Federation of Master Printers (AIFMP)
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These industry projections extrapolated year-wise is as shown below :
India’s Print and Allied Items: Market Value, 2005-2012 (In US$ Million)
Year Printing Consumables
Ink Machinery Total
2005 11,580.9 112.1 343.3 358.4 12,394.72006 12,609.7 125.0 380.8 402.4 13,517.92007 14,118.7 143.0 434.1 465.3 15,161.12008 15,845.0 163.0 495.0 541.4 17,044.42009 17,782.0 185.7 564.2 630.0 19,161.92010 19,954.0 211.6 643.1 733.0 21,541.72011 22,391.0 241.2 733.2 853.0 24,218.42012 25,084.6 274.9 835.9 992.3 27,187.7
CAGR (%)
2007-2012
12.2 14 14 16.4 12.4
Source: The All India Federation of Master Printers (AIFMP)
3.3.2 Views of NPES
According to NPES - India is the world’s fastest growing print market
with a projected 73% of change from 2006-2011. Not only is India
growing extremely fast but it’s doing so from a very large base.
India is already the 12th largest print market in the world but it will grow
to be the 8th largest printing market by 2011.
According to NPES, the industry projections are as shown below:
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Source: Newsletter from NPES - The Association for Suppliers of Printing, Publishing
and Converting Technologies
As shown, in 2006, India’s printing market was valued about US$ 12.1
billion and is forecasted to grow and reach US$ 20.9 billion by 2011, at
a compound annual growth rate (CAGR) of 11.6% during the period
2006-11.
As shown, according to the NPES, the Indian printing machinery market was valued at US$ 521 million in 2006. This is forecasted to grow and reach US$ 628 million in 2011, at a compound annual growth rate (CAGR) of 4% for 2006-11.
It seems that NPES assumes a stable trend of ‘print machinery usage’
in India. Thus the industry projections as indicated by NPES are on the
lower side as compared to the industry projections as indicated by
AIFMP.
* * * * * * * * * *
CHAPTER 4MARKET POTENTIAL IN INDIA
4.1 MARKET POTENTIAL IN INDIA
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Print Market Scenario
India represents a good market potential for printing industry and is
amongst the fastest growing print markets as per the study, recently
completed by Print Industries Market Information and Research
Organization (PRIMIR) on the Worldwide Market for Print. This study
was presented to the membership at the recent NPES Industry
Summit. Looking at individual country markets, the Table 1 overleaf
shows the top 12 markets on a dollar volume basis in 2006 and 2011.
There are really no surprises in this data, other than the fact that China
has already displaced Germany and the UK as the third largest print
market. However, by 2011, India will rise from the 12th largest market
to number eight.
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In fact India is one of the 12 fastest growing markets (see Table 2) in
Asia. In 2006, India’s printing market is about US$ 12.1 billion and is
forecasted to grow to US$ 20.9 billion by 2011.
Printing Machinery Market Scenario
As mentioned earlier in section 3.3.1, the AIFMP has indicated the
following :
According to the AIFMP estimates, the Indian printing machinery market was valued at US$ 402.4 million in 2006. This is forecasted to grow from US$ 465.30 million in 2007 to reach US$ 992.30 million in 2012, at a compound annual growth rate (CAGR) of 16.4% for 2007-12.
The breakup of the market is as shown below :
India’s Printing Machinery: Market Value, 2005-2012 (In US$ Million)
Year Total Machiner
y
Pre-Press
Press Post-Press
Others
2005 358.4 41.4 276.1 22.6 18.32006 402.4 46.4 310.2 25.5 20.32007 465.3 53.5 359.1 29.5 23.22012 992.3 108.5 777.3 61.4 45.10
CAGR (%) 2007-2012
16.4 15.2 16.7 15.8 14.2
Source: The All India Federation of Master Printers (AIFMP) and Desk Research
As mentioned in section 3.3.2, here we are seeing a stable trend of
‘print machinery usage’ in India. Out of the total print machinery, press
accounts for 77%, pre-press (12%), post-press (6%) and others (5%).
Regarding imports of Printing Machinery in India
OFFSET PRINTING MACHINERY REEL FED - Italy has very little
presence in this category.
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OFFSET PRINTING MACHINERY SHEET FED - Italy has no
presence in this category.
FLEXOGRAPHIC PRINTING MACHINERY - Italy has been supplier to
India in this category. Italy has lesser presence in this category.
GRAVURE PRINTING MACHINERY - Italy has been the predominant
supplier to India in this category. Italy has very strong presence and
contributes more than 50% of the total imports in this category to India.
Recently, this dominance of Italy has been challenged by the
competitors. Last consecutive two years had seen a decreasing trend
in Italy’s contribution in total exports – a thing to concern!!!
OTHER OFFSET PRINTING MACHINERY - Italy has been supplier to
India in this category. Italy has very little presence in this category. This
category is also termed as ‘used machinery’ or ‘second hand
machinery’.
4.2 ABOUT THE CONVERTING INDUSTRY IN INDIA
Packaging Industry is set to move up to the 20-25% Growth Band.
The Indian economy is set to grow at a fast pace in the coming years.
As the economy rides an increased industrial production and a growing
international trade, the package converters find the customers are
increasingly demanding better and innovative products. Retailing shifts from
the corner shops to the malls also means that the packaging is assigned more
responsibilities. The present per capita consumption of packaging in the
country is dramatically lower than the global averages. All the pointers
indicate that the packaging industry is set to move to a higher level of growth
between 20-25% from the present level of around 12-15%.
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The larger Indian converters have been adopting the latest technologies and
several high-end machines have been installed in the country in the past few
years. These machines are largely imported from the western countries, with
Germany and Italy accounting for almost 45% of the total packaging
machinery imports. However, as the need to upgrade is felt by the smaller
converters and corrugators and many commercial printers diversify into
package printing, there is an increasing focus on machines made in Taiwan,
Korea and also China.
Meantime, the Indian machinery manufacturers have also geared up and are
today making machines that are lapped up by the growing industry in India.
Some of these machinery manufacturers are also making inroads in the
export markets and are moving beyond the traditional Asian neighbours and
the countries in the Gulf to South Africa, East Europe and even South
America.
For years, the Indian corrugated box industry has been characterised by low
technology and has been reserved for the small scale sector. With the
booming white goods industry, the use of the corrugated box as a primary
package is increasing. At the same time, the market dynamics is witnessing
the increased customer demand for an improved secondary package. The
Indian corrugator is responding to the emerging demands and to the need to
upgrade and innovate.
World over, Flexography has become the pre-dominant medium for package
printing. The use of flexo has also been growing in India. Several
sophisticated CI flexo presses have been installed in the past few months.
The booming label industry is riding a narrow web flexo invasion as folding
carton manufacturers also take a look at this technology. The Indian
corrugators have been increasingly adopting flexo printing with water-based
inks. The coming years should see a larger share of printing going to flexo in
the converting and corrugating industries.
Source:
http://www.indiaconvertingshow.com/industry.htm
26
As per the AIFMP presentation, it is seen that the ‘packaging’ is the largest
end use sector and is growing.
Source: The All India Federation of Master Printers (AIFMP)
4.3 PRINT MARKET – BY END USE
India’s Print Market value by end use, 2005-12 (US $ Million)
End Use Segment
2005 2006 2007 2012 CAGR (%) 2007-2012
Magazines and
Periodicals
296 312 339 509 8.5
Sales and mail-
order Catalogues
56.5 62.2 70.4 130.9 13.2
Packaging 2850 3138 3552 6682 13.5
Labels 420 472 547 1149 16.0
27
Others 951 1029 1144 1947 11.2
Note: The end use segments shown above are using ‘Gravure Printing’. Source: The All India Federation of Master Printers (AIFMP)
The consumer packaging, labels and magazines are the sectors driving the ‘gravure
printing’ market growth in India.
In US $ Million 2005 2006 2007 2012
Total Printing 11580.9 12609.7 14118.7 25084.6
Packaging 2850.3 3138 3552.8 6682
Packaging as %
of Total Printing 24.6% 24.9% 25.2% 26.6%
Source: The All India Federation of Master Printers (AIFMP)
4.4 UP COMING TECHNOLOGIES IN INDIAN PRINTING INDUSTRY4.4.1 Flexographic Printing
Flexography (also called surface printing), often abbreviated to flexo, is
a method of printing most commonly used for packaging (labels, tape,
bags, boxes, banners, etc.).
A flexographic print is made by creating a positive mirrored master of
the required image as a 3D relief in a rubber or polymer material. A
measured amount of ink is deposited upon the surface of the printing
plate (or printing cylinder) using an engraved anilox roll whose texture
holds a specific amount of ink. The print surface then rotates,
contacting the print material which transfers the ink.
The flexible printing plate used in the final ink printing stage is light
sensitive. A positive is placed over the plate, and is displayed to ultra-
violet light. The plate is then 'washed' on a rotating drum in a tank of
Toluene solvent, which removes the layer of material that received the
ultra-violet light.
28
Originally flexographic printing was basic in quality. Labels requiring
high quality have generally been printed using the offset process until
recently. In the last few years great advances have been made to the
quality of flexographic printing presses.
The greatest advances in flexographic printing have been in the area of
photopolymer printing plates, including improvements to the plate
material and the method of plate creation, usually photographic
exposure followed by chemical etching, though also by direct laser
engraving.
Digital direct to plate systems have dominated the industry recently
with their better resolution and the ability to print four color process (or
more) as well as offset. Some companies who make plates in house
are going to trade shops to get these high quality plates.
Laser-etched anilox rolls also play a part in the improvement of print
quality. Full color picture printing is now possible, and some of the finer
presses available today, in combination with a skilled operator, allow
quality that rivals the lithographic process. One ongoing improvement
has been the increasing ability to reproduce highlight tonal values,
thereby providing a workaround for the very high dot gain associated
with flexographic printing.
Flexo has an advantage over lithography in that it can use a wider
range of inks, water based rather than oil based inks, and is good at
printing on a variety of different materials. Flexographic inks, like those
used in gravure and unlike those used in lithography, generally have a
low viscosity. This enables faster drying and, as a result, faster
production, which results in lower costs. Printing press speeds of up to
2000 FPM (600 meters per minute) are achieveable now with modern
technology high-end printers, like Flexotecnica, a member of the
29
Cerutti Group. Flexotecnica will introduce its highly automated F12
press at Drupa 2008.
ProductsTypical products printed using flexography include brown corrugated boxes,
flexible packaging including retail and shopping bags, food and hygiene bags
and sacks, flexible plastics, self adhesive labels, and wallpaper. A number of
newspapers now eschew (or avoid) the more common offset lithography
process in favour of flexo.
The packaging sector is clearly the driving force behind the ‘flexographic printing’
market growth in India.
In US $ Million 2005 2006 2007 2012Total Printing 11580.9 12609.7 14118.7 25084.6
Packaging 2850.3 3138 3552.8 6682
Packaging as % of Total Printing 24.6% 24.9% 25.2% 26.6%
Source: The All India Federation of Master Printers (AIFMP)
4.4.2 Gravure PrintingRotogravure (roto or gravure for short) is a type of intaglio printing
process, in that it involves engraving the image onto an image carrier.
In gravure printing, the image is engraved onto a copper cylinder
because, like offset and flexography, it uses a rotary printing press.
The vast majority of gravure presses print on reels of paper, rather than
sheets of paper. (Sheetfed gravure is a small, specialty market.) Rotary
gravure presses are the fastest and widest presses in operation,
printing everything from narrow labels to 12-feet-wide rolls of vinyl
flooring. Additional operations may be in-line with a gravure press,
such as saddle stitching facilities for magazine/brochure work. Because
gravure is capable of transferring more ink to the paper than other
printing processes, gravure is noted for its remarkable density range
(light to shadow) and hence is a process of choice for fine art and
photography reproduction, though not typically as clean an image as
that of sheet fed litho or web offset litho.
30
ProductsGravure is widely used for long-run magazine printing in excess of 1
million copies. Gravure's major quality shortcoming is that all images,
including type and "solids," are actually printed as dots, and the screen
pattern of these dots is readily visible to the naked eye. Examples of
gravure work in the United States are typically long-run magazines,
mail order catalogs, consumer packaging, and Sunday newspaper ad
inserts.
Other application area of gravure printing is in the flexible packaging
sector. A wide range of substrates such as Polyethylene,
Polypropylene, Polyester, BOPP etc. can be printed in the gravure
press.
4.5 PRINT MARKET – BY PROCESS
It is seen that the print market is dominated by Offset Processing
(Sheet-fed, Heatset and Coldest). Still other segments like
‘flexography’ and ‘gravure’ are growing.
l
India’s Print Market value by process, 2005-12 (US $ Million)
Process 2005 2006 2007 2012 CAGR (%) 2007-2012
Flexography 1180 1337 1553 3189 15.5
Gravure 763 816 895 1380 9.0
Source: The All India Federation of Master Printers (AIFMP)
* * * * * * * * *
31
CHAPTER – 5
SURVEY FINDINGS5.1 LIST OF CONTACTS
MITCON have contacted about 100 respondents from Indian Printings
and Converting Industry with standard questionnaire using indepth face
to face interviewing method. The details are as given below :
Sr. No.
Particulars Nos.
1. Printing Machine Manufacturers 172. Printing Associations 053. Institutes 024. Dealers and Distributors 145. Printing Units 66
TOTAL… 104
General Findings
1. Majority of the users are using imported machinery mainly
manufactured in countries like Germany, Sweden, Japan, Italy, Korea
and Czechoslovakia.
2. German make machineries are more popular because of reliability and
Technological competence like precision and durability.
3. Specific brands like Cerotti (Italy), Solana (Sweden) Heidelberg
(Germany) Mitsubishi (Japan), Hakiyama (Japan), Komori (Japan),
HMT (India), Manugraph (India) are the popular brands for Gravure
and Offset respectively.
4. Average increase in production is about 10 % per annum.
5. Most of the user industries are having multicolor machines.
6. Average purchases of the machinery are made in last 10 years period .
7. Users of indigenously manufactured machinery are manage to get
satisfactory after sale service from vendor.
8. 80 % of the users from India are using medium and large size
machines.
9. Dealers & Distributors are selling machineries of multiple brands, with
various Technologies.
32
Printing Machine Manufacturers
Sr. No.
Name of the Company
Location Name of the Respondent
Designation
01 Heidelberg India Pvt. Ltd.
Chennai Mr. Ramakrishnan
Sr. Manager-sales
02 HMT (International) Limited
Bangalore Mr. H B Jagadeeshr
Dy. General Manager
03 .Mitsubishi ( Proteck Machinery Pvt. Ltd)
Chennai Mr. Om Prakash. H. R.
General Manager
04 Marsons Print-Graf Machines Pvt.Ltd.
Mumbai Mr.Swapan Chakrabartty
General Manager
05 Pragati Polyprint Mumbai Mr.Lunkaran Jangid
Director
06 Sheth Printograph Pvt. Ltd.
Noida Mr. Sheth Managing Director
07 NBG Printographic Machinery Co. Pvt. Ltd.
New Delhi Mr. Navin Goel Executive Director
08 J Mahabeer & Company Pvt. Ltd.
New Delhi Mr. V K Gupta Manager-Sales
09 The Printers House (P) Ltd.
New Delhi Mr. Rohit Bhatia Asst. Manager-Sales
10 Autoprint Machinery Manufacturers Pvt Ltd.
Pune Mr. Mandar Shetty
Branch Incharge
11 Kinnari Printing Technologies Private Limited
Mumbai Mr. Nilay Savla Director -Marketing
12 U V Graphic Technologies Pvt. Ltd.
New Delhi Mr. Abhay Dutta Executive Director
13 Alpha Omega Machines
Bangalore Mr. I Stanley George
Managing Director
14 Covertech Equipment Pvt. Ltd.
New Delhi Mr. Avinash Mansukhani
Asst. Manager
15 Safepack Industries Ltd.
Pune Mr.Rajendra Tapadia
President
16 Faroni Enterprises Chennai Mr.A.H.D.Farooq Director 17. Gurunanak Machinery
Works Delhi Mr. Manjit Singh Proprietor
Findings:
33
1. Majority of the Indian Machine Manufacturers are producing Offset Machines.
2. The presence of Flexographic & Gravure Machine Manufacturers from India is competitively very less.
Feedback from Printing Machine Manufacturers :
Source : MITCON Field Survey
Source : MITCON Field Survey
34
Source : MITCON Field Survey
Source : MITCON Field Survey
Printing Associations
Sr. No.
Name of the Association Location
01 All India Federation Of Master Printers New Delhi02 Indian Printing Packaging and Allied Machinery
Manufacturers’ Association (IPAMA)Noida
03 The Bombay Master Printers` Association Mumbai
35
04 Karnataka State Printers Association Bangalore05 The Madras Printers` & Lithographers` Association Chennai
Institutes
Sr. No.
Name of the Institute Location
01 Indian Institute of Packaging Mumbai
02 Maharashtra Institute of Printing Technology Pune
36
Dealers & Distributors
Sr. No.
Name of the Company Location Name of the Respondent
01 Deluxe Printing Machinery Co. Mumbai Mr. R S Khurana02 Print Service Enterprises Pune Mr. V George kutty03 Haploos Printing House New Delhi Mr. R R Pandey04 Vandana Photo Copiers New Delhi Mr. V K Chadha05 Sindhu Machinery House Delhi Mr. Ashok06 Hi-Tech Engineers New Delhi Mr. Vinesh Jain07 Ambica Machineries Bangalore Mr. Suresh Gupta08 J R Graphics Bangalore Mr. J Satishkumar09 Panchamukhi Enterprises Bangalore Mr. Manjunath10 Graphic India Marketing &
ServicesChennai Mr. J J Furtado
11 Safire Lithographers Chennai Mr. A Gunasekaran
12 Standard Machinery Sales Company
Chennai Mr. M S Nagarajan
13 Canaan Press Private Limited Chennai Mr. Jaba mani14. Chemo Graphic International Mumbai Mr. Mahesh Bhuta
Findings:1. Indian Dealers & Distributors are ready to promote Italian printing Machines in
India provided the machine manufacturers shall make proper & prompt arrangements for after sales service as well as easy & economical availability of the spare parts.
2. According to them Manufacturers shall be open to offer various combination like bye-back, cross-up gradation etc.
3. The incentive /commission structure varies from 05 % to 15%
4. Most of the agents are not offering credit facility to their Buyers.
37
Feedback from Dealers and Distributors
Source : MITCON Field Survey
Source : MITCON Field Survey
38
Source : MITCON Field Survey
Source : MITCON Field Survey
39
Source : MITCON Field Survey
Source : MITCON Field Survey
40
Source : MITCON Field Survey
Source : MITCON Field Survey
41
Source : MITCON Field Survey
42
Packaging & Converting UnitsSr.No.
Name of the Unit Location Name of the Respondent
Designation
01 Orient Press Limited Mumbai Mr. Manish Jain Vice PresidentSales & Marketing
02 Dhruvi Flex Packaging Pvt. Ltd.
Pune Mr. R B Soundalgekar
Director
03 Smart Tech (Precise Labels & Packaging Ltd)
Pune Mr. Uttam Nagne General Manager
04 Vaishnevi Pakaging And Printerr
Ranjangaon, Dist. Pune
Mr. Bharatt Nahar Director
05 Pack Shield (Associated Capsules Pvt. Ltd.)
Shirwal, Dist Satara
Mr. G S Pathak Manager-Purchase
06 Cargill Foods India Ltd. Kurkumbh, Dist. Pune
Mr. Bhimanappa Manthale
Manager- Process
07 Bilcare Limited Rajgurunagar,Dist.Pune
Mr. Sameer Apte Manager-Printing
08 Kibhuki Roto Hadapsar, Pune
Mr. Bhushan Garge Partner
09 Manikchand Packaging Shirur ,Dist. Pune
Mr. Prakashji Dhariwal
Director
10 Suvidha Flex Packaging Pimpri, Pune Mr. S K Agarwal Director11 Positive Packaging
IndustriesKhopoli, Dist.Raigad
Mr. G. Srinivasan Sr. Manager
12 Rite-Print-Pak Mumbai Mr. Sopan Taware Foreman-Printing13 Innova Printing &
Packaging Co.Bangalore Mr. Satish Manager
14 Global Printing & Packaging Co. Pvt. Ltd.
Bangalore Mr. Amarnath B. K. Executive Director
15 Nandan Phototype Nandan Print & Pack
Kolkatta Mr. Ranendra Nandan Datta
Director
16. Printex India Kolkatta Mr. E. Kabir Managing Director 17. Speed Print Kolkatta Mr. Kingshuk Dutia Managing Director 18. Graphic Enterprises Kolkatta Mr. Pritish Shroff Partner19 Olympic Cards Ltd. Chennai Mr. Iqbal General Manager20. Vaishnavi Rototek Bangalore Mr. Banumathi T.L. Partner 21. Pushpa roto Printers Bangalore Mr. Deepak B. Jain Proprietor22. Anu Polymers Bangalore Mr. Rajendra Proprietor 23. Uniqlobe Packaging Pvt.
Ltd. Mumbai Mr. Rajan Tadani Managing Director
24. Sundram Plastic Chennai Mr. S.S. Murali Director 25. Venus Plastics Chennai Mr. Balasubra
maniyam Proprietor
26. Jaya Plastics Chennai Mr. B.G. Lakshmipathy
Director
27. Uneedus Kolkatta Mr. Ajay Bhadwar Proprietor
Findings:
43
1. Overall Indian Industry is aware that Italians are the world leaders as
far as Gravure & Flexographic Technologies are concerned.
2. Many of the packaging Industries are having their expansion /
upgradation plans in next 2 to 5 years.
3. Existing Users of the Italian printing & Converting machinery are
seems to be ‘brand-loyal’ and willing to go only for the Italian
machinery in case of Expansion & up-gradation.
4. . Italian manufacturers will be welcome in Indian marker provided they
offer Technological support & after sales services to their costumers.
5. Italian companies may offer ‘hand-holding’ support for running jobs to
their Buyers initially after installing their machinery.
6. Inclination towards purchase / install multiple small size machines to
replace one large size machine.
7. End user segment is more interested to have ‘Turn Key solution’ instead of having ‘stand-alone’ machine.
The machinery required for entire manufacturing chain including
various functions like sizing Raw material processing, printing,
gumming, lacquering, lamination, coating, cutting, gathering and
finishing etc. may be provided by single manufacturer.
8. Italian Machine manufacturers may face major compilation from
German Machine manufacturers in Indian market.
44
Publishing HousesSr.No.
Name of the Unit Location Name of the Respondent
Designation
01 Thomson Press (I) Ltd. Navi Mumbai
Mr. Pratyush Basak
General Manager-Works
02 Janatha Printing & Publishing Co. Pvt. Ltd.
Chennai Ms. Vijaya Kumar
Managing Director
03 Blue Bird (India) Limited Pune Mr. Rajesh Desai
General Manager
04 Canara Traders & Printers Private Limited
Chennai Mr. Mahesh V. Shanbhag
Executive Director
05 Oriental Watchman Publishing House
Pune Mr. Ravi Sighamoney
Treasurer
06 Rajhans Enterprises Bangalore Mr. A. Balachandra
Proprietor
07 Chola Printec Chennai Mr. L. Senthivel ProprietorFindings:
1. The users are more concerned about the after sale service, issues since presently presence of Italian manufacturers in Indian market is very less.
2. The Publishing Houses are more cost conscious while purchasing their machinery.
3. Confidence building about the Italian machine manufacturer companies is required.
4. Italian manufactures are required to set an ‘example’ or ‘role model’ through handful of successful end-users in India.
45
News Paper Sector
Sr.No.
Name of the Company
Location Name of the Respondent
Designation
01 The Hindu Chennai Mr. P. James Rajakumar
Dy. General Manager -Printing
02 Sakaal Pune Mr. Santosh Kulkarni
Asst. Manager
03 Lokmat Pune Mr. Bajirao S. Dhavale
Production Manager
04 Express Publications (Madurai) Ltd.
Bangalore Mr. T. P. Sasidharan
Production Manager
05 Daily Thanthi Chennai Mr. S. Pandian Executive-Materials
06 Dinamani/ Kannada Prabha
Bangalore Mr. T.P. Shashidaran
Production Manager
Findings:
1. Majority of the Indian News Paper Printing Presses are publishing their
News Paper in Regional language hence the circulation is less as
compare to the circulation of the New Paper printer Internationally.
2. Overall trend is to have a few common pages for all the editions and
majority of the pages are part of ‘local edition’ even within region/ city/
circulation area.
3. As a result of that CTP is becoming more popular among the news
paper printers.
4. The Printing Presses operating on the National Basis (Publishing
News paper in English ) are having huge circulation but presently they
are not much keen to shift from Web Offset (or at the most
Flexography) to Gravur.
46
Stationery Sector
Sr.No.
Name of the Company
Location Name of the Respondent
Designation
01 Anupam Stationery Ltd.
Vasai , Dist.Thane
Mr. Vijay Desai
General Manager
02 Sudarshan Art Printing Press
Mumbai Mr. Anand Bagwe
Partner
Findings:1. Majority of the stationery manufacturers are upgrading their machines
frequently.
2. Italians may welcome since presently there is no comparison available.
Commercial Print Houses
Sr.No.
Name of the Company Address Name of the Respondent
Designation
01 Good Impressions Mumbai Mr. Jairaj Shetty
Proprietor
02 Finalcopy (India) Private Limited
Mumbai Mr. Venkat Director
03 Lotus Printers Pvt. Ltd. Bangalore Mr. M. D. Patil Director04 Shakti Printing Press New Delhi Mr. Umesh
SharmaDirector
05 Digital Graphics India Pvt. Ltd.
New Delhi Mr. J. D. Batra Manager- Production
06 Indra Offset Printers Pvt. Ltd.
New Delhi Mr. Abhishek Gupta
Director
07 S M Print Chennai Mr. V K Babu Proprietor
08 The Sobana Offset Printers
Bangalore Mr. Madhukaran
Manager
09 Batra Press New Delhi Mr. Manminder Singh Batra
Proprietor
10 Vijay Mudran Mumbai Mr. Madhav Kanitkar
Proprietor
11 Veer Offset Mumbai Mr. V Mani Manager12 Vijay Process Mumbai Mr. Sachin
NayakIncharge
13 Print Process Mumbai Mr. Singare Gowda
Proprietor
14 Uthamaguru Offset Chennai Mr. PNV Moorthy
Proprietor
15 Ravi Graphics Offset Printers
Bangalore Mr. V R Natu Proprietor
47
16 Bharat Lithographing Co. (P) Ltd.
Kolkatta Mr. Surendra B. Dhote
Managing Director
17 Lasergraph Advertising Kolkatta Mr.Asif Nadeem
Proprietor
18 Nutan Printers New Delhi Mr. Ashok Aggarwal
Director
19 Jolly Printers Chennai Mr. C.Pandian Proprietor20 Sankalp Arts Pune Mr. Pravin
ZambareProprietor
21. Vijayalakshmi Printers Chennai Mr. R. Ramesh Proprietor 22. Nisarga Offset Printers Bangalore Mr. M.
ShivakanthProprietor
23. Sri Bhavahara Ganapathi Bangalore Mr. Sainath Proprietor24. The Basanti Press Kolkatta Mr. R.K.
BhowmicProprietor
Findings:
1. Major concern is service and spares.
2. German Machine Manufacturers have established very good Brand
Image in Indian market especially in the Offset machine sector.
3. Italians will be having tough compilation by the companies like
Heidelberg & Manugraph in Large & Medium Sectors End user
segment and by Indian Manufacturers like Swift in Small Scale Sector
end use segment.
48
Feedback from Printing Units
Source : MITCON Field Survey
Source : MITCON Field Survey
49
Source : MITCON Field Survey
Source : MITCON Field Survey
50
Source : MITCON Field Survey
Source : MITCON Field Survey
51
CHAPTER 6
SWOT ANALYSISPrinting & Converting Machinery Industry in India
6.1 Strengths
Established industry in India having strong base – about
150,000 to 160,000 printing presses in operation.
A growing industry - Printing and packing industry has CAGR of
about 14%.
6.2 Weaknesses
The Indian printing machine manufacturers are not equipped
with the latest Technology.
The printing machinery industry is still dependent on Imported
know-how and import of critical components with different
models in existence without a proper technical back-up by way
of research, development and standardization.
The domestic industry lacks development of new techniques in
the absence of domestic research and development activities in
printing machinery manufacture.
The domestic industry imports used machinery form other
developed countries and then uses it. The industry is not used to
procuring of brand new machinery (may be due to cost
constraints).
The domestic industry has not built-up sufficient strength in R&D
for original design and development.
Majority of the Indian printing presses do not have maintenance
facilities of their own due to economic consideration. As such,
52
after-sales service, even after warranty period, is necessary but
lacking.
6.3 Opportunities
Booming Indian economy.
Government initiatives opening the sector to foreign investment.
Indian has high literacy levels and has seen increase in literate
population in the recent past.
India has a large newspaper reader base. Print media reach is
India has increased to 222 million people.
Vast potential to grow market still larger. There are around 369
million literate peoples in India still not tapped by any publication.
The Indian media industry is undergoing a modernization process in
order to gain from these growth opportunities. In this process they
have realized the need for technically advanced printing machinery
to achieve success in the tough competition.
Recently the print media has been allowed for 100% foreign direct
investment and as a result the foreign print media companies are
attracted towards India. This may further increase the growth in the
demand for printing machines.
6.4 Threats
The Indian printing machine manufacturers are not equipped
with the latest technology hence large demand is catered
through imports.
A trend of Increasing imports. Imports of printing machinery
have been increasing from US$ 41 million in 2001-02 to US$
188 million in 2006-2007.
53
Trend towards implementing used machinery in the current
projects or ongoing projects. It is seen that during the past 6
years imports of second hand machinery has increased
considerably.
Since the machinery manufactured in India is not meeting the
requirements of many newspaper / media companies, they are
importing them from Europe and Japan.
CHAPTER 7
BUILDING YOUR PRESENCE IN INDIA
7.1 Entry Strategies For Foreign Investors
A foreign company planning to set up business operations in India has
the following options-
AS AN INDIAN COMPANYA foreign company can commence operations in India by incorporating a
company under the Companies Act 1956 through
i) Joint Ventures
ii) Wholly Owned Subsidiaries
Foreign equity in such Indian companies can be up to 100% depending on the
requirements of the investor, subject to equity caps in respect of the area of
activities under the Foreign Direct Investment (FDI) policy. For details refer to
http://www.dipp.nic.in
Incorporation of Company For registration and incorporation, an application
has to be filed with Registrar of Companies (ROC). Once a company has
been duly registered and incorporated as an Indian company, it is subject to
Indian laws and regulations as applicable to other domestic Indian companies.
For details please visit the website of Department of Company Affairs under
54
Ministry of Finance at http://dca.nic.in
AS A FOREIGN COMPANYi) Liaison Office/Representative Office
ii) Project Office
iii) Branch Office
Such offices can undertake any permitted activities. Companies have to
register themselves with Registrar of Companies (ROC) within 30 days of
setting up a place of business in India.
Liaison Office/Representative OfficeLiaison office acts as a channel of communication between the principal place
of business or head office and entities in India. Liaison office can not
undertake any commercial activity directly or indirectly and can not, therefore,
earn any income in India.
Its role is limited to collecting information about possible market opportunities
and providing information about the company and its products to prospective
Indian customers. It can promote export/import from/to India and also facilitate
Technical / Financial collaboration between the parent company and
companies in India. Approval for establishing a liaison office in India is
granted by Reserve Bank of India (RBI).
Project OfficeForeign Companies planning to execute specific projects in India can set up
temporary project/site offices in India. RBI has now granted general
permission to foreign entities to establish Project Offices subject to specified
conditions. Such offices can not undertake or carry on any activity other than
the activity relating and incidental to execution of the project. Project Offices
may remit outside India the surplus of the project on its completion, general
permission for which has been granted by the RBI.
55
Branch OfficeForeign companies engaged in manufacturing and trading activities abroad
are allowed to set up Branch Offices in India for the following purposes:
i) Export/Import of goods
ii) Rendering professional or consultancy services
iii) Carrying out research work, in which the parent company is engaged.
iv) Promoting technical or financial collaborations between Indian
companies and parent or overseas group company.
v) Representing the parent company in India and acting as buying/selling
agents in India.
vi) Rendering services in Information Technology and development of
software in India.
vii) Rendering technical support to the products supplied by the parent/
group companies.
viii) Foreign airline/shipping company.
A branch office is not allowed to carry out manufacturing activities on its own
but is permitted to subcontract these to an Indian manufacturer. Branch
Offices established with the approval of RBI, may remit outside India profit of
the branch, net of applicable Indian taxes and subject to RBI guidelines
Permission for setting up branch offices is granted by the Reserve Bank of
India (RBI).
Branch Office on “Stand Alone Basis” Such Branch Offices would be isolated
and restricted to the Special Economic zone (SEZ) alone and no business
activity/transaction will be allowed outside the SEZs in India, which include
branches/subsidiaries of its parent office in India.
No approval shall be necessary from RBI for a company to establish a
branch/unit in SEZs to undertake manufacturing and service activities subject
to specified conditions.
Application for setting up Liaison Office/ Project Office/ Branch Office may be
submitted in form FNC 1 available at RBI website at www.rbi.org.in
56
Source: Ministry of Commerce, Govt of India.
7.2 Company FormationSTART
Obtaining approval for the proposed name of the Company from the ROC
Drawing up the Memorandum of Association
Drawing up the Articles of Association
Getting the appropriate persons to subscribe to the Memorandum (a minimum
of 7
for a public company and 2 for a private company)
Payment of Registration Fee to the ROC
Receipt of Certificate of Incorporation
Obtain a certificate of commencement of business from the ROC
in case of a public company
END
Source: Ministry of Commerce, Govt of India
7.3 Steps to Get a Company Incorporated
1. Select in order of preference, a few suitable names, not less than
four, indicative of the main objects of the company.
2. Ensure that the name does not resemble the name of any other
company already registered and also does not violate the
57
provisions of Emblems and names (prevention of improper use)
Act, 1950.
3. Apply to the concerned ROC to ascertain the availability of name in
Form-1 A of General Rules and Forms along with a fee of
Rs.500/-. If proposed name is not available apply for a fresh name
on the same application.
4. Arrange for the drafting of the Memorandum and Articles of
Association by the solicitors, vetting of the same by ROC and
printing of the same.
5. Arrange for stamping of the Memorandum and Articles with the
appropriate stamp duty.
6. Get the Memorandum and Articles signed by atleast two
subscribers in his own hand, his father’s name, occupation,
address and the number of shares subscribed for and witnessed
by atleast one person.
7. Ensure that the Memorandum and Article is dated on a date after
the date of stamping.
8. Get the following forms duly filled up and signed:-
i) Declaration of compliance – Form-1
ii) Notice of situation of registered office of the company – Form-18.
iii) Particulars of Director, Manager or Secretary – Form-32.
1. Pre sent the following documents to ROC with filing fee and
registration fee:-
i) The stamped and signed copies of Memorandum and Articles of
Association (3 copies).
ii) Form-1, 18 & 32 in duplicate.
iii) Any agreement referred to in the M&A.
iv) Any agreement proposed to be entered into with any individual for
appointment as Managing or whole time Director.
v) Name availability letter issued by ROC. Power of Attorney from the
subscribers in favour of any person for making corrections on their
behalf in the documents and papers filed for registration.
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1. Pay the Registration and Filing Fee by Demand Draft/Banker’s Cheque
if it exceeds Rs.1000/-.
2. Obtain Certificate of Incorporation from ROC.
Additional Steps to be taken for formation of a Public Limited Company
3. Consent of Directors to act as such in Form No.29.
4. Arrange for payment of application and allotment money by Directors
on shares taken or agreed to be taken.
5. File the statement in lieu of prospectus with ROC in schedule-iv of the
Companies Act.
6. File a declaration in Form-20 duly signed by one of the Director.
7. Obtain the Certificate of Commencement of Business.
8. As per Citizens Charter name availability will be disposed of in 3
working days.
Forms mentioned above can be downloaded from:
http://dca.nic.in/downloads_2003.htm
Source: Ministry of Commerce, Govt of India
7.4 Approval/Clearances Required For New Projects
Approvals/Clearances Required
Department to be Approached andConsulted
Incorporation of Company Registrar of Companies
Registration/IEM/Industrial
license
DIC for SSI/SIA for large and medium
industries
Allotment of land State DI/SIDC/Infrastructure Corporation
/SSIDC
Permission for land use
(in case industry is located
outside an industrial area)
a. State DI
b. Dept. of Town and Country
Planning
c. Local authority/district collector
NOC and consent under
Water and Air
State Pollution Control Board
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Pollution Control Acts
Approval of construction
activity and building plan
a. Town and country planning
b. Municipal and local authorities
c. Chief Inspector of Factories
d. Pollution Control Board
e. Electricity Board
Sanction of Power State Electricity Board
Use and storage of
explosives
Chief Controller of Explosives
Boiler Inspection Certificate Chief Inspector of Boilers
Finance i) SFC/SIDC for term loans
ii) For loans higher than Rs.
15 Million, all India financial
institutions like IDBI, ICICI,
IFCI etc.
Registration under States
Sales Tax Act, and
Central and State Excise Act
i. Sales Tax Department
ii. Central and State Excise
Depts.
Extraction of Minerals State Director of Mines and Geology
ISI Certificate Regional Office of the Bureau of
Indian Standards (BIS)
Quality Marking Certificate Quality Marking Center of the State
Government
Weights and Measures Inspector of Weights and Measures
Code Number for Export and
Import
Regional Office of Director General of
Foreign Trade.
SIDC : State Industrial Development Corporation
SSI : Small Scale Industries
SIA : Secretariat of Industrial Assistance
SSIDC : Small Scale Industrial Development Corporation
SFC : State Financial Corporation
DIC : District Industry Center (exists in particular State)
GOI : Government of India
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IDBI : Industrial Development Bank of India
ICICI : Industrial Credit and Investment Corporation of India
IFCI : Industrial Finance Corporation of India
Source: Ministry of Commerce, Govt of India
7.5 Important Government Websites:Department of Industrial Policy & Promotion http://dipp.nic.in/
Department of Commerce http://commerce.nic.in
Directorate General of Foreign Trade http://dgft.delhi.nic.in
Ministry of Environment of Forests http://envfor.nic.in
Ministry of Small Scale Industries http://ssi.nic.in
Reserve Bank of India http://www.rbi.gov.in
Ministry of Finance http://www.finmin.nic.i
Department of Company Affairs http://www.nic.in/dca
7.6 Investment Related PoliciesFOREIGN DIRECT INVESTMENT (FDI) POLICY
FDI under automatic route is now allowed in all sectors, including the
services sector, except a few sectors where the existing and notified
sectoral policy does not permit FDI beyond a ceiling.
Automatic Route No prior approval is required for FDI under the
Automatic Route. Only information to the RBI within 30days of inward
remittances or issue of shares to Non Residents is required. RBI has
prescribed a new form, Form FC-GPR (instead of earlier FC-RBI) for
reporting shares issued to the Foreign Investors by an Indian company.
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For details please contact:
Chief General Manager,
Reserve Bank of India,
Foreign Investment and Technology Transfer Division,
Exchange Control Department,
Shaheed Bhagat Singh Road,
Mumbai – 400001.
Tel.:+ 91-22-2266 1603
Fax + 91-22-2266 5330
TAXATION IN INDIAIndia is moving towards reforming its tax policies and systems so as to
facilitate globalization of economic activities. The corporate tax rate for foreign
companies is 40%. The net tax rate is far lower than this on account of
various deductions and exemptions available under the tax laws. Tax holidays
are available in Special Economic Zones set up to make industry globally
competitive. Infrastructure Sector Projects enjoy special tax
treatment/holidays. A user friendly tax administration is being introduced with
round the clock electronic filing of customs documents from 31.3.04. For
details regarding taxes in India, please contact Ministry of Finance,
Government of India, North Block, New Delhi – 110001 through their website
http://finmin.nic.in/topics/taxation/index.html
INVESTMENT FACILITATIONSecretariat for Industrial Assistance (SIA) in Department of Industrial Policy
and Promotion, Government of India provides a single window service for
entrepreneurial assistance, Investor facilitation and monitoring implementation
of the projects.
Secretariat for Industrial Assistance (SIA)
Department of Industrial Policy and Promotion
Ministry of Commerce & Industry
Udyog Bhavan, New Delhi-110 011
Email: [email protected]
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Tel.: +91-11-23011983
Fax : +91-11-23011034
Source: Ministry of Commerce, Govt of India
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CHAPTER 8
CONCLUSION & RECOMMENDATION
8.1 CONCLUSION
Overall Indian manufacturers are not yet wholly equipped with
latest technology, hence large demand for foreign machines.
Packaging and converting is an emerging sector in India.
Presently, offset technology is popular in India, hence, there is a
good scope for introducing technologies like flexography and
gravure by up gradation of existing printing units.
Presently, after sales service , spare parts availability/assurance
in long run & their cost and warranty period are the crucial
points while selecting the machinery for Indian printing units.
8.2 RECOMMENDATION
ACIMGA has already started their office in Mumbai. The Italian
Companies like OMET, Cerrutti etc. have entered in Indian market.
The other Italian manufacturing companies may take advantage of this
situation and concentrate on Indian printing machine market.
Considering present import duty structure (@28.63%) for Printing
Machines & their parts to be imported in India , it may be advisable for
Italian Machinery manufacturers to initially set up their Offices in India ,
increase local market presence on long continuation basis; market their
Machineries ,undertake Installation/Commissioning ,make available
spare parts easily at reasonable costs; train & develop sufficient Indian
manpower for Techno-commercial-management purpose.
As a long term vision , India could be thought of as a manufacturing
base to serve the emerging Asian market as well as beyond to start
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with Technology Tie ups by select enterprises of suitable scales
manufacturing different categories of end use Printing machines.
The Italian companies are welcome to utilize the professional hand
holding services of MITCON Consultancy Services Ltd., Pune, India for
establishing their operations in India…Best Wishes!!!
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