Wednesday 29 December 2010

Speculative predictions for the next decade

Speculative predictions for the Indian print and packaging industry

One should not hazard any predictions for the next decade. But since much of the trend forecasting of the first IppStar industry survey has turned out to be broadly correct, one cannot resist temptation at the start of another decade. (Do keep in mind that our figures are mostly misunderstood and wrongly quoted by most of the people who keep directly and indirectly ‘borrowing’ from our multi-client research project.)

Anyway here goes. I predict a GDP growth of 8.2 to 8.8 per cent for the next two years, and about 8 per cent CAGR for the entire decade. Of course it could be higher but I do not see any concrete evidence of why growth should be taken for granted for a ten year period.

It is true that our industry is currently buoyant and feeling very optimistic and mostly not on the basis of exports, but on the basis of domestic demand. However the industry continues to be fragmented and without coherent leadership. I do not think this will change in the next decade — although I have earlier predicted that by 2014 the industry will actually put forward a new generation of real print industry leaders that can think about the industry from beyond their own individualistic point of view.

At the beginning of the last decade I wondered if the Indian manufacturers of printing equipment and consumables would survive in the face of Chinese competition. My impression now is that many are able to develop, acquire and absorb new technology which means that they will survive and grow, albeit with some consolidation as we have seen in plate manufacturing. The ink manufacturers are already all here and they will continue to expand their local manufacture although the consolidation of their parent companies will also continue.

In the coming decade, international paper manufacturers will bring in some of their idle machines and also their fibre. Garnett Papers near Mumbai and Avery Dennision are trend-setters in this area and expect some new investments within the first years of the new decade.

As far as press and postpress equipment, India could become a hub for the manufacture of appropriately smaller and lighter machinery, which is modularly expandable. This trend which is also apparent in manufacturers such as Oystar Hassia, could make the country a leader in these segments in the same way as the country has become a hub for small car manufacture.

My last prediction is that ten Indian packaging companies will acheive a turnover of Rs 500 crore in the next decade. Even twenty companies could achieve this figure but that is a bit of a challenge. According to one of my converter friends, the real challenge is to achieve a turnover of Rs 1000 crore (US$ 250 million). A real challenge but possible.

Naresh Khanna,

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