Zombies in the age of the Coronavirus

Indian Printer and Publisher 42nd anniversary issue

Zombie companies cannot repay their loans or even the interest to service these loans.
Zombie companies cannot repay their loans or even the interest to service these loans.

In a recent article in The Times of India, Ruchir Sharma wrote about ‘zombie’ companies. These are companies that can neither repay their loans nor the interest to service these loans. They cannot even pay dividends to shareholders unless they are stealing from somewhere – either the banks or from their employees or suppliers.

The pages of the financial dailies are littered with the troubles of the larger zombies. Some even blame the failing Indian economy and the reforms that don’t work as expected. Then comes the truly global Coronavirus pandemic with total unpredictability. Unlike the disasters of 11 September 2001 or the financial collapse of 07-08, there is no cathartic end in sight. Every individual and every business is affected. And the large number of freelance, informal, adhoc and casual workers are ground to dust. All the glib talk about the gig economy turns to bile.

It is the small and medium publishers and printers who are now the zombies. Unable to repay the so-called loans taken at extortionate interest rates and with so much collateral that there is no risk to the lenders, we are unable to pay the interest, let alone the EMI’s on our loans. Despite us being straightforward brick and mortar enterprises, the soft loans and private equity go to the dishonest borrowers who flee. To the ‘startups’ and the vaporware racketeers that specialize in presentations about their losses. Even in our industry, many companies borrow and grow their top lines with hypercompetitive pricing, only hoping to be acquired by some foolish foreign investor.

The question is which foreign investor who is serious about business and creating wealth will invest in a company in an environment ruled and created by an authoritarian government? A government keen to gather more power to itself so that it can rewrite textbooks with false history and pseudoscience to feed its inferiority complex. The keenness to drunkenly assert your past and future greatness come only from a sense of inadequacy and failure.

Which investor will see merit in a government that nurtures an undemocratic and anti-scientific environment of hatred and intolerance? A government that tells lies about its provocative actions and watches while a minority community is slaughtered and its’ places of business and worship are incinerated in broad daylight while the police stand by. A government that cannot tolerate criticism and a government that undermines the constitutional role of the judiciary by openly corrupting judges and offering them lollipops to do its bidding.

Sometimes the penny only drops when there is a catalyst such as a Coronavirus that forces us to clean our spectacles. I shall not vent or rant on since this is our 42nd-anniversary issue, once again barely finished on a Saturday afternoon. Nevertheless, even after so many years, we are happy that we can pick up the phone and speak to some of our friends. We may not agree about everything, but we will continue to defend not only our mutual rights of self-expression but those of every citizen and resident of our country.

I only want to thank the hundreds of companies, both publishers and printers, and input suppliers who have helped and, at times, even saved us. It’s been an exciting time, and we have learned much about our fellow citizens and our readers. We only hope that as they have given us the courage to speak out for what is right and wrong, that we have also been of some help or at least amusement to them. That we have pointed them in the direction of finding things out for themselves. And for sharing their experiences and their ideas.

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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