Sakal slows down on investment in machinery and infrastructure

Economic slowdown impacting revenue

Bhausaheb Patil, director, Sakal Media Group

The Pune-headquartered Marathi broadsheet daily Sakal has slowed down investment in new machinery and infrastructure due to sufficient capacity at present and the general slowdown in the industry, Bhausaheb Patil, director, Sakal Media Group said.

“In the last one year or so, we have not made any major investments in machinery or other related infrastructure; firstly, because we have enough capacity for the moment and secondly, due to sluggishness in the newspaper industry. Yes, we have made some minor investments but nothing significant,” he shared.

Sakal is the flagship brand of the Sakal Media Group. It is published in the cities of Pune, Mumbai, Kolhapur, Sangli, Nashik, Aurangabad, Nanded, Parbhani, Solapur, Nagpur, Satara, Akola and Jalgaon. It has printing plants in 12 locations and ranks among the top 10 language dailies of India and is the largest circulated Marathi newspaper.

According to Patil, the overall slowdown in the economic growth and severe slowdown in automobiles and real estate industries has impacted the advertising revenue of not only Sakal but the overall Marathi newspaper industry.

“Our circulation is growing but this growth is not translating into higher advertising revenue. The biggest reason is major economic headwinds faced by big advertisers like automobile and real estate industries. The Indian automobile industry is in the middle of a severe slowdown. The real estate industry is also going through a rough patch. Their advertising budgets have been slashed, which has in turn affected the newspaper industry,” Patil explained.

Marathi broadsheet daily, Sakal
Marathi broadsheet daily, Sakal

Duty on imported newsprint adds to the problem

For the Marathi newspaper industry, and the newspaper industry as a whole, sluggish advertising revenue is not the only cause of concern. The recent imposition of import duty on newsprint has added to the operating cost as well. In this year’s budget, the Indian government announced a 10% customs duty on newsprint. According to this provision, uncoated paper used for newspapers and lightweight coated paper for magazines will attract 10% customs duty with effect from 6 July 2019.

“The industry will definitely feel the impact of duty imposition on import newsprint. There is a direct cost escalation due to this. There is not enough availability of quality newsprint locally and newspapers have to rely on imports. In fact, a large proportion of newsprint consumed by Sakal is imported. During festival season, the proportion of imported newsprint can go up to 80% for Sakal as there are higher volumes of advertisements,” he said.

Digital growing but revenue visibility still a challenge

Sakal has been fast to adapt to the advent of the digital age and has a separate vertical to cater to that segment. There is a successful electronic paper, eSakal, as well as a mobile application. Although, eSakal has seen good growth in user base, according to Patil, a clear revenue generation model is still elusive.

“We have a very successful digital platform but generating revenue through this channel is still a challenge, not only for Sakal Media Group but for the whole Marathi newspaper industry. We are focusing on innovating the content so that the reader is willing to pay for that. Our focus is on creating hyperlocal and specialized content for which the reader is ready to pay,” he said.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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