At the end of June, our editor Naresh Khanna visited Konica Minolta’s office in Cyber City, Gurgaon for a no-holds-barred conversation with Kuldeep Malhotra, the deputy managing director of the company in India and who manages its sales operations across the country. We publish below edited excerpts of our conversation with topics and questions in bold type.
On the economic and print industry recovery from the Covid-19 pandemic –
Kuldeep Malhotra – The pandemic has had a deep effect on the economy but the industry started coming back in Q3 of 2021 and even in July 2021. In our FY 21-22 results, our print volume growth was 15% year on year. Admittedly this was from a lower base than the previous year and it may be a reflection of the print industry’s shift from offset to digital or it could have been some pent-up demand or backlogs were being met. Recovery in the production printing business has happened very well where we reached pre-Covid levels.
What are the numbers for the hardware – the production digital press numbers?
Kuldeep Malhotra – There was a recovery in FY 2021-22 to an overall market size of 1300 digital presses and we were able to maintain our market share at 55% of these. While this is still short of the previous high of 1,500 digital presses sold in the 2019-20 year it is a good comeback from the first pandemic year of 2020-21 when the Indian market sunk to about 900 machines overall. This year our total market estimate is 1,500 to 1,600 digital presses and of course, we expect to at least hold our dominant share.
On toner supplies from Japan –
Kuldeep Malhotra – Yes there was a time when we were worried about the toner supplies but we normally keep an inventory of 60 days at our locations around the country and in the challenging period our customers also helped. They were very transparent and in some cases even shared their toner stock with us and other printers. In the third month, fortunately, the toner supplies from Japan resumed.
On the new series of digital presses launched in March of this year – the C7100 and the C7090 –
Kuldeep Malhotra – Right after the launch, at first we were cautious in selling the new models so we went a bit slow. Subsequently, the sales picked up and now we have reached the Gujarat market where the customers have large print volumes. For them, the robustness of the machine and the bigger duty cycles are especially useful. Now the demand for this series is picking up around the country.
On the industrial digital print market –
Kuldeep Malhotra – We can say that the industrial printing range is going to be our backbone in the future alongside the production print presses and here we have had success in the past year. The MGI was a very good story. We sold 12 engines last year, from earlier levels of 4 to 5 annually. Despite not selling any KM1 presses, our revenue in the industrial segment grew by 100%.
The big-time copy shop owners are now looking at MGI for embellishment, where they are seeing much higher margins than in just printing. And the MGIs are now going to smaller cities and towns. Also, there are inquiries for the KM1 even in remote areas where we may be unable to supply at first, especially keeping in mind the quick support expectations from customers.
The best part is that printers are now exploring how to do more than just what jobbers do. Thus, the potential customers are getting into embellishment with varnishing and foiling. The requirements for labels and stickers with foiling are there, and that demand has also helped us to sell MGI. And this grew the service revenue which for the first time is going into a green mode (meaning profitability) and where we were earlier supporting this segment.
If we look at the printers who have spent Rs 40 to Rs 50 lakhs on a digital production press there is a considerable market for the MGI range of embellishment machines. I think we can sell a dozen MGI each year now.
On the KM digital label press sales in India –
Kuldeep Malhotra – We have about 15 digital label press installations. Customers look at both the ROI and what kind of applications they can produce on this machine given the widths required. White printing is also required which this machine does not have. We have a range of products in most segments but in the label segment right now we have only one product. However, Europeans with their requirements of less manpower are buying this machine in good numbers.
Keep in mind that as a country we are struggling in terms of investment, and businesses are very careful. We have an advantage that our digital press product pricing is still reasonable, and the banks are not as hesitant as with much bigger investments. For the MGI for instance, the banks are much more particular.
On Konica Minolta India’s new digital business services segment –
Kuldeep Malhotra – We are becoming an intermediary between corporate and digital printers who need help in selling their services to larger companies. And as some of the corporates are giving work to our printers, we are helping to create print demand and volumes. The corporates are also impressed by the value of embellishments done on the MGI machines.
On the KM1 HD’s prospects in the coming year –
Kuldeep Malhotra – This year, we are hoping to sell the KM1 also because the funnel has improved. During the Covid-19 pandemic, we thought it was important for our customers and ourselves to focus on servicing our installed base of production printers rather than the much bigger investments required by the KM1.
For the KM1 and especially the new HD model, we are very ambitious this year. We have appointed several channel partners on the industrial side which includes the KM1, the label press, and the MGI range of machines that are now branded as the Accurioshine.
Accurrioshine 3600 is the new name for the new MGI embellishment press. This new branding has given confidence to our team and also to our customers.
The new KM1 HD model is also excellent for photo production, and we are focussed on installing this model during the current fiscal. The digital print industry recovery is strong, the MGI is very strong, and our coverage across the country has improved with the appointment of channel partners. What we realized is that it is challenging to handle the large sales territories by ourselves alone, but the partner who is sitting in a region is much more able to reach nearby cities and towns.
With extended arms, we can better explain our products and the ROI. And this is one of the reasons why in this financial year, we are again looking at double-digit overall growth, and more than 50% growth in the industrial printing business.
Thank you!
