Digital labels improve Wonder Pac’s profitability

Monotech’s JETSCI ColorNovo helps cash flow

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L-R: Minakshi Mittal and Trilok Mittal of Wonder Pac alongside the JETSCI ColorNovo digital label press
L-R: Minakshi Mittal and Trilok Mittal of Wonder Pac alongside the JETSCI ColorNovo digital label press

Wonder Pac India, the Sonipat-based label printer, earns nearly 35% of its revenue from exports. Apart from its customers across the country, it exports labels mainly to the neighboring Saarc countries. “The export market is great for packaging. China is a heavy consumer of labels. But it already has many label converters and is even an exporter of labels to other countries,” says Trilok Mittal, managing director of Wonder Pac.

A narrow-web flexo label press user, Wonder Pac, bought a Mark Andy in 2003. It made repeat Mark Andy investments in an 8-color, and another 6-color narrow web flexo in 2011 and 2012, respectively. The 2012 press replaced its oldest label press. “We didn’t purchase a conventional flexo press after 2012. We are a significant supplier to cosmetic companies. The SKUs in cosmetics are more than in any other industry. However, the run lengths are significantly shorter – we get orders for 10,000 labels at most.

“There is a greater demand for embellishments, such as foiling and textured varnishes from cosmetic brands. Hence, such jobs are not viable on a flexo press because of the high relative wastage. The JETSCI ColorNovo label press that we purchased from Monotech Systems comes with additional flexo stations that allow for a flat white on films and embellishments too. The flexo station is followed by an intermittent die-cutting unit, inline slitting, and a rewinding unit. It is a digital hybrid press,” Mittal explains.

Mittal visited the Labelexpo Europe 2019 show in Brussels. He says, “The trend this time, shifted from conventional narrow web flexo presses to digital presses. With increasing SKUs, it makes sense for a label converter to operate with a combination of flexo and digital presses. Even in the alcobev segment, every company has longer runs for only one or two of its products, and we get demand for shorter run lengths for all other products. Hence, this is the right time to invest in a hybrid or a digital press.”

“As this segment has just begun to flourish, it was best for us to invest in JETSCI ColorNovo right now. This press offers more flexibility and quality as compared to any other press in this segment and hence we decided to invest in it. We have also made this investment keeping the future demand for embellished labels in mind. With short-run work increasing, there will be greater competition in the market, and press suppliers will then think about offering solutions at a viable price-point,” adds Mittal.

Digital is more profitable

Moreover, Mittal says that compared to narrow web flexo, the profit margins in digital are higher. The profit margins for a run of 2,00,000 square meters on a flexo press are slimmer compared to a run of 50,000 square meters on a digital press. Wonder Pac’s average monthly turnover stands at Rs 1.75 crore. The company performed relatively well in the first two quarters of FY 2019 – 20, but saw a sharp decline in Q3 sales. “Because of this, we expect our overall growth not to exceed 10% in the financial year. Our investment in the digital press paid off well,” Mittal concludes.

Short runs help cash flow

Mittal’s wife, Minakshi Mittal, a partner at Wonder Pac India, says, “Since the last one year, we’ve encountered numerous payment issues. Most of the companies are not able to pay on time. However, since digital allows us to take some part of the payment in advance, it has helped us in this turbulent time. We usually take 50% of the total amount in advance for any short-run label printing work. These advance payments help us maintain the cash flow. The failure in payments is mainly due to the economic slowdown. It looks like the market will improve towards the end of Q1 in the next financial year.”

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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