10th January 2015

Courtesy: Business Standard

Sivakasi printing industry grapples with loss of orders

Sivakasi-s Rs 1,500-crore printing industry - which is dominated by small and medium enterprises (SMEs) - continues to face challenges, though its counterpart in the rest of the country is seeing signs of revival. Industry representatives said that many units are idle and those that are operational are running at low capacity.

There has been a slowdown in the traditional businesses of notebooks, stationery, calendars, text books, novels and labels, and this has been aggravated by power cuts and shortages of paper and labour.

The slowdown has forced many companies - from the private and the public sector - to cut orders for dairies and calendars. Life Insurance Corporation of India used to place orders for 30 lakh dairies with Sivakasi-s printers every year. This year the order was won by larger firms from outside Tamil Nadu, who bid lower, said industry sources.

Besides, even text books ordered by Tamil Nadu-s schools are currently being printed from neighbouring states, they said. Lower demand has also increased the pressure on prices, hurting margins, they added.

An industry representative said that annual business size has shrunk by 40 per cent. "We are not able to deliver orders in time and Chennai is fast picking up in offset printing with the power advantage."

There are about 6,000 SMEs in and around Sivakasi, which is also the hub for the matches and firecracker industries. Dogged by scarcity of capital, these units have failed to upgrade their facilities.

The industry has now opted for a cluster development programme promoted by the Centre to meet the cost of machinery. About 30 members of the printers association have raised funds for the Rs 15-crore project, while the Centre and the Tamil Nadu government contributed grants of 70 per cent and 10 per cent respectively. The association is also readying plans for a second cluster.

A five-colour Heidelberg machine has been installed in the common facility centre. On the cards are a CTP kit and an imported Japanese cutting machine. Any player in the industry can use the facility for a nominal charge. The Sivakasi Master Printers Association (SMPA) plans to train students from the Sivakasi Institute of Printing Technology run by the association.

V Ganesh Kumar, a director of SFA Print Pvt Ltd and treasurer of SMPA, rues the fact that Sivakasi-s earlier speciality such as quality artists and binding and stitching facilities are no longer required in the age of computerised printing. "We should offer something unique for people to come to us and we are discussing what it could be and how to achieve it," he said.

"Printers must invest in the latest machinery and focus on niche segments", added K Selvakumar, director, Lovely Offset Printers Pvt Ltd -- a company that was also hit by the domestic slowdown, but has sustained itself through export orders, which is a growing opportunity, he said.

"There is a huge export market opening up for printing companies, considering that China is no longer cost-competitive. Customers from the US, UK and other countries are looking for better suppliers in India, but there should be quality in their work," said Selvakumar.

"If you ask the last generation, they would say that the printing industry in Sivakasi has never faced such a slowdown in the last 30 years. But we, the young generation, see an opportunity," said Murali Manoj, director, Moorthy Offset Printers Pvt Ltd. The company shifted its focus to packaging two years ago and has seen orders flow in even in the current tough times.