Both big note currency demonetization at the end of 2016, and the current goods and services tax (GST) ‘one-tax one-country’ regime have been optimistically cheered on by much of the publishing and printing industry. Within the slightly chaotic situation, keep in mind that a major international book publisher active in India advocated taxation on the retail sales of books (where there was no tax at all) simply so that the industry would be able to generate more accountable numbers!
At the same time, it is said that these economic and administrative reforms are more likely to benefit the larger and more organized publishers and printers than the smaller and less organized businesses. Both large and small commercial printers since 1 July 2017, when the GST came into force, are saying that their presses are mostly idle or working single shift even as they spend countless hours in meetings with other printers, publishers and consultants.
The problem with one tax one country is that there are multiple GST lanes—0%, 5%, 12% and 18%—for the most part. There is apparently one rate for books where the publisher provides the paper and another if the printer provides a turn-key solution. At a Capexil seminar in Delhi attended by leading book printers, it was not really clear if the rate on printed books is 0% or 18%. For status holding book printing exports, the tax is apparently 0% but large print exporters do not want to be caught out later as ITC was this week when the taxes on cigarettes were steeply revised upwards.
In the context of even senior government officials attending GST seminars being candidly less than authoritative, a leading book printer and exporter says, “If you are the creator of a half-baked cake and you don’t have any answers, who are printers or publishers supposed to ask or to do?”
The effects of disruption
According to IppStar’s (www.ippstar.org) research team, which tracks installations of new multicolor sheetfed presses in the country amongst other equipment and consumables, the FY 2016-17 financial year saw a 20% to 25% drop in sheetfed offset press installations over the previous year. Within this trend Komori maintains its lead in the number of presses installed, with Heidelberg second, RMGT third and KBA in a very respectable fourth position because of the high value of its highly configured 7-color plus presses mostly in the 28 x 40 format in the carton market.
Heidelberg also did well last year with about half of its press installs being 28 x 40 inch 7-color plus coater packaging presses. The other significant feature in Heidelberg’s sales are the increasing interest in Anicolor presses of which there are now six installations in the country—all in the SX 52 format. The new installs of three presses in the past year come mostly from digital printers who find the high capital cost and click charge of the more expensive digital presses unappetizing in comparison with the quick make-ready, ease of use and high quality of Anicolor, which uses an anilox inking system.
The other significant development over the past several years, and which is now very strong with commercial printers looking to replace their multicolor 28 x 40 inch presses, is the trend to buy 25 x 35 inch presses. The savings in plate costs while still being able to generate 8-page formats can be up to 30% with attendant saving in blankets, ink and chemicals as well. In the carton packaging market, the 28 x 40 inch trend continues albeit with 7-color plus coaters practically a standard configuration and several longer and more complex machines also being installed each year.
Komori and RMGT both lost about half a dozen installations in the past financial year due to the uncertainties and affected cash flows related to demonetization. Both see a strong recovery in the current year.
In the current financial year to 31 March 2018, some strong installations based on last year’s orders have taken place in the first quarter although it has been slow for sales. The second quarter to September is expected to remain slow for installs but the press manufacturers and distributors are optimistic of overall installations for the current financial year. According to IppStar estimates, Indian new sheetfed offset press installations including those manufactured in China and India itself now represent 3% to 5% of the global market.