All fingers are crossed that the newest Covid-19 variant does not cause the third wave of the pandemic in a country that seems to be aggressively controlling the spread of the virus by testing and tracking travelers and approaching the full vaccination of adults at over 6 million jabs a day. Although the full vaccination of 990 million adults may not happen by end-December, it will by March 2022. In my experience from a recent trip to the UK, India has an effective rtPCR testing and tracking system. Its agencies and facilities are among the least expensive and fastest in testing and the delivery of lab results. The follow-up and tracking of travelers in the 7-day self-quarantine mean a phone call from the local SDM’s office is repeated every couple of days until you send them the negative results of the 7th or 8th day rtPCR test.
However, the commercial print industry is still on tenterhooks about the economic recovery since commercial printing including the production of textbooks has still not returned to pre-pandemic levels. In digital printing the perceived trends just three months away from the end of the financial year, the crisis includes the slow and seemingly reluctant and partial re-opening of schools, retail, hospitality, and travel. In addition, the skyrocketing prices of paper are also undermining the return to FY 2019-20 consumption levels.
The paper crisis
For the past three years, the large paper mills in Europe and America have been shutting down publication paper machines although book printing has remained strong. There is a shift away from newsprint and lightweight coated magazine papers and other coated stocks to recycled liners and paperboard for packaging. As negotiations with workers councils and consolidators have matured, the paper machine and mill shutdowns and changeovers that were talked about two years ago, are now taking place with regularity each week.
In India, there has been a shift to corrugation liners and paperboard where feasible, although the worldwide shortage of used fiber and shipping dislocation continues to drive up prices of raw materials, chemicals, and finished paper stocks. Publication papers from uncoated to coated that were around Rs. 40 to 70 a kilogram (US$ 580 to 900) two years ago, now rule at over Rs. 70 to 110 a kilogram – from US$ 900 to 1,500 a ton.
However, there has been a softening of paper prices in India in December because of low demand. Paper prices have already declined by one or two Rupees a kilogram and are expected to keep going down till they reach a level 10% below their peak prices in November. Digital printers who generally buy fine and premium papers that are cut and packed in A3 plus reams are affected in their recovery with these paper inputs still hovering over at Rs. 100 a kilogram.
The shift from offset to digital print
The pandemic has only slightly sped up the shift to digital print in India where commercial printers are now looking at it as a route to survival and growth. While there is some recovery in the digital print market it is more on the side of marriage invitation cards and photo books than for commercial printing of marketing collateral or books which are more affected by the rise in paper prices.
The digital press market is nonetheless experiencing shifts with more global manufacturers entering the country and changes in distribution agreements. TechNova has just tied up with HP for the distribution of its Indigo digital presses for the carton and label segments, even as it will continue to sell Konica Minolta digital presses in the commercial print segments. Ricoh digital press is now being supplied by Monotech Systems and Minosha – the new name for the Jhunjhunwala-owned former Ricoh India entity that it acquired in the National Company Law Tribunal arbitration.
Fujifilm consequent to its separation from Xerox has entered India on its own with its Revoria 6-color presses even as Xerox India continues to sell a good number of digital presses on top of its large installed base. Canon is also expected to sell a significant number of digital presses in the current financial year although the overwhelming majority of these will be from its entry to mid-level range. Konica Minolta is again expected to dominate the Indian market and perhaps maintain its majority share despite increased competition in a depressed market.
In addition, there are the digital inkjet presses from local manufacturer Monotech Systems that go into the book printing and label printing market and the Multitech-Domino hybrid digital label press that has sold a few machines in the past year. However, digital label printing presses still do not generate a large market or sufficient interest amongst converters. The combined sales of HP, Xeikon, Mark Andy, Konica Minolta, Multitech-Domino, and Monotech will likely add up to a dozen or fifteen machines in the current financial year. Digital carton printing – while catching on in the developed world, especially for corrugated boxes, is practically non-existent in the country as yet.
The digital press market is recovering in the current financial year from April 2021 to 31 March 2022. But it will not meet the manufacturers’ expectations. A back-of-the-envelope forecast indicates that the year will finish in March with the induction of about 1,000 new digital presses, representing a decline of 30 to 40% from the previously high levels of just a couple of years ago.
Admittedly, while many more commercial printers are now open to the idea of buying a digital press, the all-around recovery of the printing industry is not likely to reach more than 60 to 70% of pre-pandemic levels. Apart from the structural shift to electronic and multi-channel communication and media, the ambiguity of new Covid-19 strains and waves remain. The slower than expected re-opening and recovery of schools, travel, hospitality, automobiles, and real estate are depressing every part of the digital print industry that should have played a bigger part in accelerating the economic recovery.