In April, alongside the opening of schools and colleges, we had a sense that book printing and exports have recovered well. This recovery was gradual with signs that demand picked up in Q3 itself. Ultimately, the feedback from the organized commercial print businesses is that the financial year 2021-22 ending on 31 March was a good bounce back from the pandemic year 2020-21.
Moreover, a significant number of the leading commercial printers have exceeded their FY 21-22 sales above the pre-Covid year of 2019-2020. Although some of this growth may be inflationary, including the increase in raw material prices the other factor could be the slowing down of the economy in the year preceding the Covid year.
Domestic textbook printing was visibly booming from March to May of this year. While it has slightly cooled down in July, book printing exports remain steady as they have throughout the past two years. Other commercial printing segments that depend on the recovery of the travel, hospitality, retail, automobile, and other industries are slowly coming back although the recovery in digital print could be a bit quicker than in offset.
Strong print recovery but how to manage inflation
We discussed the commercial print situation with Narendra Paruchuri of Pragati Offset in Hyderabad who remarked, “The first three months (April to June) of the financial year have been ok, but there is a threat of inflation over the next nine months of the financial year which silently destroys profitability. Some part of the rise in paper prices is genuine while the rest of it could be an opportunity cost. However, there is an added uncertainty in availability and delivery times also.”
Around the country, the printers who are organized and invested in technology concur that business is better than even the pre-Covid year, but one of the reasons for this is that that year (FY 2019-2020) was particularly bad for the economy and print. The economy experienced seven bad quarters coming into FY 2020-2021. Publishers such as Navneet Publications who own their school textbook printing and stationary plants have said that they had to write off the pandemic years when schools were closed. Bipin Gala of Navneet says, “By and large we have to write off the two bad years and have decided that we are now are past it – and it is again time to upgrade technology and invest in new capacities.”
Gala spoke about the purchase of a Koenig & Bauer RA 106, a 6-color perfecting press with a combi/UV coater at the end of the press that is expected to arrive before December, well in time for installation before the end of the financial year in March. In Navneet’s new K&B black model 6-color 106, the perfecting is configured after the first printing unit (1+5). The press features the side-lay free Sensoric Infeed System, dynamic sheet brake, non-stop feeder and delivery, and other features of the new black models.
Heidelberg which has sold several packaging presses this year has so far only announced the sale of one press to a commercial printer so far – a CX 92 4-color press to Samrat Offset, based in New Delhi. It does expect to sell another two or three presses to commercial printers for installation within the financial year.
New technology capacity creation is one barometer of print’s recovery and vitality. While the sales of sheetfed offset packaging presses including highly configured 7-color plus coaters with UV are at a high level, the bounce back in commercial printing of 4-color and longer presses has been a bit of a surprise. A number of the larger commercial printers who are specialized in book printing and exports are buying 8-color perfecters such as Thomson Press in Faridabad and MultiVista in Chennai who have both bought RMGT 92 8-color machines.
As we wrote in previous issues, Nutech in Faridabad has already installed its RMGT 92cm 4-color press in April 2022. Another commercial printer who has purchased the RMGT 92cm 4-color press is SAP Printers in Mumbai and another RMGT 92cm 4-color is coming to a publisher for his in-house production. Apart from the Thomson and Nutech presses which are already installed and running, the remaining three RMGT presses bought by commercial printers will come later in the year.
The demand in the smaller Indian cities and towns for 4-color mid-size presses is also booming and Komori has been especially successful among these printers with installations to exceed a dozen in the commercial segment. The chip shortage and other supply chain problems mean that the manufacturers are unable to commit to deliveries before the end of the financial year, 31 March 2023. Nevertheless, one can estimate that anywhere from 21 to 23 new multicolor presses imported from the five major international manufacturers will be installed for commercial and book printing in the year.
Indian Rupee has gained against the Japanese Yen
The sheetfed offsets for the commercial printers will be overwhelmingly dominated by the two Japanese manufacturers, although they are doing well in the packaging press segment too. The reason for this is the significant devaluation of the Japanese yen against the US dollar and even the Indian Rupee.
The nearly two dozen commercial offset presses will be dominated by the two Japanese manufacturers Komori and RMGT – the overwhelming majority of sales by Komori. We are expecting less than five new press installations going to the German press manufacturers, Heidelberg and K&B. Collectively the German manufacturers including Heidelberg, K&B and Manroland Sheetfed will do better in the packaging segment which could achieve around two dozen Indian press installations in the current financial year. However, even in the packaging segment, the two Japanese manufacturers are likely to supply the majority of new presses.
As one printer pointed out to us, from 1 January 2022 to 20 July 2022, while the Indian Rupee has gone from 75 to 80 against a dollar, the Yen has devalued much more against the dollar, from 115 Yen to 139 Yen per dollar – or about 15%. Where it earlier cost from Indian Rs 0.65 for a yen, it now costs Rs. 0.58 or only 58 paise for a yen. Thus while the Indian Rupee has devalued by 3.8% against the Euro, it has become stronger against the Japanese Yen by 10.47%. The Japanese manufacturers have the edge over the German press manufacturers for the Indian customers who can buy now.