On the occasion of Labelexpo India we were In Conversation with A Appadurai, Country Manager, Indigo and Inkjet Business Solutions, HP India, who shared his views on the growth of HP Indigo technology and its demand for converters in India.
Veerendra Malik, Digital Impressions (VM): In the last few years, Digital Printing is becoming a mainstream in Labels & Packaging. How are OEMs like HP responding to the demands, requirements and technologies to incentivise more printers to move into this segment, as it still represents a small fraction of the industry?
A Appadurai (AA): “Let us take it from an overall standpoint and then from digital standpoint. Labels and Packaging is always a growing business because of the sheer population that we have. Now if you take three steps back, what is changing, it is the packaging and the customers. Today, 50 percent of the consumers in India are less than 30 years old and the way a 30-year old would behave in a super market is very different as from what I or somebody else would. This is what is driving demand in every single direction.”
According to Appadurai, HP believes in creating a demand for the converter. He gives an example of Cadbury chocolates. About eight years ago there was one chocolate, Cadbury’s Dairy Milk. About eight years back they came out with a fruit and nut, five variants of Oreo etc. Today they are doing 212 varieties of chocolates. Further, with corporate gifting, designs of packaging are also being created and this is what is revolutionising the industry. That is where HP’s gain becomes better and bigger.
Secondly, he says it’s the start-ups and India is the biggest start-up capital of the world. We were earlier at number twenty, today we are number two and on our way to number one position. If there is a start-up who want to sell something like juices or chocolates and approaches a large consumer, he is told to stock up for two years. All start-ups have one problem which is money. Should they put their money in inventory and use it for the next two years or in marketing to sell their product?
“Offset, Flexo or Gravure, the crux of the market is only one. Five customers of yours give 80 percent of your business in India. If one customer goes away, you lose twenty percent of your business. The customer will come back and say, we want a discount and credit and if you have been doing long runs for them, they will want you to do some short runs too on offset. The moment you have digital, you will not have five but five hundred customers. The value of the job is only ten thousand but they may give you advance payment. So even if ten customers go away, you have no problem. This is how the game changes for digital. That is why we have had a 300 percent growth from the time Covid started in March 2020 till now.”
“This is also happening because going to converters is one job that we have but going to brands is the biggest job for us. Apart from participation in a big show like Labelexpo, we are a part of many small shows in various sectors like food, wine, cosmetics etc. Matchmaking between brands and converters is what we do. To answer your question, today as HP we believe in creating a demand for the convertor.”
“We don’t measure growth by the number of units we sell but by the number of sq. mtrs. a convertor is printing by Indigo.”
“HP is a small company and if we need to get to a larger market of India, we need to go to somebody who knows India or somebody who India knows. Which is where we did our biggest innovation of ‘go to market’, by signing up with Technova. Today, the power and brand of Technova marrying with the technology of HP and its marketing power is what we think is going to help us address the market better than what we were doing before.”
VM: When do you see, if at all, HP Indigo presses being affordable for smaller printers. Many print houses who are into toner digital printing or those who are sitting on the fence for entering into digital printing wanting to have HP Indigo technology but can’t afford the investment?
AA: “We don’t want a market only with Mercedes Benz cars. Everybody may want a Mercedes but there is an option. Here is my customer who is willing to do outsourcing for you and will never ever get to your customer who you are doing a job with. There are a couple of people in our install base who have built up their business model around this, catering to small printers. We believe the world’s problem will be solved by cooperation. There is a print shop in Nehru Place in Delhi, who has got an Indigo Kit to cater to other print units. It’s like Uber, be an Uber. You don’t need to own an Indigo, do it with somebody who has got it.”
VM: Initially you started with UV application, then glitter, foiling, what next?
AA: :We would not talk on specific areas but there are many more applications in the pipeline that are good for both commercial and packaging.
Packaging application requires more support in regards to speed, quality and we want to develop and improve on that to better serve our customers
VM: OEMs in Flexo & Narrow Web are bringing in new technologies to make short runs, embellishments and quick job changeovers possible and more economical including variable data printing. Do you see this as a challenge for digital in labels in the near future?
AA: “No, these are beautiful seeds that somebody else is planting for me. You can have all finishing solutions available on Flexo but that is meant for a purpose, which is, if it is 10,000 linear metres and above you make money. 2000-10,000, maybe you make money or lose but those who do less than 2,000 may feel that they are losing money. All we are saying is, should you have a purpose and if you want to compete with digital to do the 2,000 linear metres it is not economical to do this as conventional and people are understanding this by saying, let me take this to digital and make the money losing jobs into money making.”
“For example, a company which has eight flexo machines has 18-20 percent of the jobs under 2,000 metres. When you put in an HP Indigo, firstly you remove all the headache, painful short-run jobs from 18 percent onto that press and moved that percentage of your eight machine capacity. This makes it profitable or breakeven. The value is that every time you buy an Indigo you gain two favourite brands of your flexo machines, free of cost. So, when people talk of HP Indigo being expensive and not affordable, sorry, every time you buy one Indigo, we give you one offset or one flexo free of cost. Capacity is still why people do the madness of buying an offset, flexo or a gravure. There will be a day when we would sell more than all of these people put together sell. It will happen.”
VM: Economics is the key factor in majority of label printing. Do you see digital printing on larger scales and longer runs being feasible?
AA::“Yes, there is a natural scale of economy based on the size or speed. We have a scale of economy. We are never going to reach the long runs. Where long runs happen on the Indigos it is on campaigns like Coke, where there were 230 varieties or tax stamps printing which is completely variable, where this becomes the only option whatever the run. That is why we say ‘I cannot eat all the food on the plate. I have a small portion which belongs to me, I am happy, I will keep growing’. For balance you are the big daddy. We always say Offset – Salaam.”
VM: HP has incorporated AI/VR technology for its Indigo presses. How does it work and how is it benefitting your customers?
AA: “That has been really amazing. Not just AI, today we are talking about mixed reality technology, about xR lens by which customers can ensure self-sufficiency around the clock. The adoption time for this is about three years. When we introduced this Covid and lock down happened, we were forced to change overnight. A customer would call from Chennai, Kolkata or in the middle of the night and the call was being attended remotely. Today 85% of our servicing problems are getting solved remotely and that is a massive transformation. Even if I am in the same city and you call me, it will take about three hours to reach you. All these applications of AI, VR today are on Google and Microsoft platform.”
Explaining about the technology, Appadurai narrates, “To tell you about an incidence at a company gathering of about 17 general managers in Israel a question was asked who is the most illiterate one amongst us and my boss picked me and said this guy. I was called up and given the glasses and I am in front of the machine hearing somebody and me seeing through the xR glasses. I actually fixed a complicated issue in 45 minutes. This is what is going to transform the way servicing is going to be done.”
“We will be able to send a note that a particular part is going to wear out in the next 24 hours or after 20,000 impressions and this will go to the customer, to the engineer and to the warehouse. The warehouse is already shipping the part and will be at the customer’s doorstep before the failure happens. If there is less down time there is more money for HP and also for the customer who has the machine.”
VM: Your expectations of digital printing, any challenges 2023 onwards post Covid from an OEMs point of view?
AA: We are aiming at 75% efficiency which is high. We have to remember that we are still dealing with the finishing segment which is not like CMYK. It is still complementary. So 75% is a good target and there are customers who have achieved that.
Right now, in commercial printing there are more jobs with short runs. When we move to packaging there will be less jobs but with higher runs which will have more productivity and efficiency.
.VM: Finally, what is the efficiency of production on Scodix by your customers? What is the scope of improvement?
AA: I always say, the world is going to be with me but I take a very balanced approach. The trajectory that we are going through today is unbelievable. I would love the fact that there are ten other digital players at this show, Labelexpo, which is great news to my ears. Earlier I was alone, fighting in the market and today there are eleven players fighting in the market and I have a 50 percent share. We will always keep growing and are very upbeat about the trajectory that we are in
VM: We hear news about companies in the West like ePac ordering 100 Indigos together for expansion and upgrades. When will we see such situations in India even for ordering maybe 10 from one customer at one time?
AA: : “We already have a customer down South who has 9 presses, not in the label space but commercial and there are also other customers in India who have multiple Indigo installations. So we are getting to that number. I do not see any reason why such a situation should not happen in the next two years.”
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