It’s over but its not over: The summer after drupa

After a pleasant and unexpectedly rainy April and an equally unexpectedly temperate May, June is upon us in New Delhi. Fiercely hot with an occasional dust storm and daytime temperatures touching 44 and 46 degrees centigrade and night time lows above 30, we are now waiting for the rains – the monsoon which hit the Kerala coast on time at the beginning of the month, proceeded up the coast to Mumbai and is expected to reach us by the end of June.

If you were there at drupa, you were there. You made your choice and you saw what you saw and you learnt what you could. You had a good time, met up with printers across town that you haven’t seen for a decade. You saw many others who were totally unfamiliar, a sign of the Indians being the largest foreign contingent at the show. You met up with the sons and daughters of printers – the new breed of highly educated and very polite kids that only printers have. And then you came back to the heat and dust and the grinding work – trying to remember what you saw and trying to digest what it means.

In Delhi this has meant several events by paper manufacturers – itself unusual, but a sign that paper mills and traders are becoming aware of the possibilities of our large market and the necessity of increasing their branding. It’s no longer the sellers’ market that it once was.

Meanwhile we are putting together our drupa experiences for readers in what we hope are meaningful and digestible articles in both our magazines. This itself is a luxury – to have two magazines and one especially for packaging – the most earthy flavour at this drupa notwithstanding the digital raz matazz. There are some review events also, like the drupa impression event in Mumbai on 30 June where I have been invited to give an overview and share my understandings, skepticisms and futurisms on digital print and packaging.

These are generally good events and they reflect the enthusiasm of an industry that is still growing in the traditional ways of print. Often, the leading printers reveal the direction of their thinking and they are generally quite smart – they are part of an industry that is capable of realizing drupa for what it really is – a knowledge event that gets us thinking, debunking, sharing, enacting.

Naresh Khanna editor@ippgroup.in

Finance Industry notifies interim anti-dumping duty on digital offset plates

Naresh Khanna

In a communication received by us on the evening of 5 June 2012, we learnt that the Ministry of Finance of the Government of India has on 4 June 2012 notified the anti-dumping duty basically following the findings and guidelines recommended by the interim findings of the anti-dumping commission of the Ministry of Commerce. The only modification that we notice is a formula to convert the various thicknesses of offset plates taking into account that 1.318 square metres of aluminium offset digital plate is equal to 1 kilogram. This is apparently to take care of the fact that imported CtP plates subject to the anti-dumping duty are imported in varying thicknesses.

The anti-dumping duty is notified on the basis of the US$ prices per square metre as given in the preliminary findings. However the anti-dumping duty imposed under this notification (Notification No. 31/2012-Customs (ADD) New Delhi, the 4^th June, 2012) shall be effective for a period not exceeding six months from the publication of this notification in the Official Gazette and shall be payable in Indian Rupees.
 
Our view:
It is hoped that the final findings that were expected to be delivered by 1 June 2012 will actually be delivered sooner than later and that they will take into account the various anomalies pointed out by the concerned parties during the open hearings and in submissions thereafter by the concerned parties and several medium and large printers across the country. We also hope that the fragmented printed industry will continue to come together to discuss this issue and to make their views known to the anti-dumping commission. Meanwhile all imports of CtP plates are immediately subject to the given rates given in US$ and to be paid in the currently equivalent Indian Rupees.

Anti-dumping on offset plates – final findings delayed?

Like many concerned industry watchers we were expecting the final findings of the anti-dumping commission of the commerce ministry to arrive last week. See our earlier edit-blogs at http://indianprinterpublisher.blogspot.in. Apparently the visits by commission members to the relevant factories of the Chinese and Japanese manufacturers took place in May. Subsequent to the open hearing in which lawyers from TechNova, Kodak, Fuji, Lucky Huaguang Graphics and the Kerala Master Printers Association spoke, written submissions were made by them and other concerned parties. Printers of varying sizes from all over India have written to the commission and met its members to express their objections to the anti-dumping duty on digital offset plates.

While it is too early to say what the final findings will be, one cannot deny that the delay has given hope to many of the printers who have dared to speak out against TechNova’s claim of injury. These include Thomson Press, Pragati Offset, Adarsh Offset, the members of the Kerala Master Printers Association, and several others. As we wrote earlier, the fragmented printing industry mostly consisting of small and medium players is maturing and finally some of the medium and bigger players are finding their voice and speaking out on record. Anti-dumping duty apart, this is the biggest change in the Indian print industry – that they can with some concerted efforts act individually and together (as in the case of the Kerala Master Printers Association) for some worthwhile business objectives beyond their own individual and personal benefit.

The issue of anti-dumping duty on offset plates is important and printers and their state associations, and in deed, the newspaper, magazine and book publishing associations must also look at the issues, enter the discussion and give their views to the anti-dumping commission of the commerce Ministry. They must also communicate to the Finance Ministry that the interim findings not be not be notified until all the questions raised by the concerned parties are answered and taken into account in the final findings.

                                                                                         
          — Naresh Khanna
editor@ippgroup.in

An example of the communication sent to the Anti-dumping Commission of the Ministry of Commerce, Government of India, Udyog Bhavan, New Delhi by Ashish Rajoria of Adarsh Printers in Bhopal, that was shared with us.

Dear Mr. Satish Kumar,

We are Offset printers based out of Bhopal and we wish to register a strong objection to the proposed anti dumping duty on offset plates.

In our views Technova is trying to further strengthen its monopoly in the market. You must be aware that Technova has already either bought or forced the competition to close shop (example Stovec and Neeraj).

There are many small printers who have paid a higher price for a CtCP machine, based on the fact that their variable cost will be lower as they can use conventional offset plates.

We are reminded of the days when automobile industry was averse to the opening of the market to the international players (example Bajaj etc were against opening of the market to international players). It is worth mentioning that even after the opening of the economy, Bajaj has grown and is a market leader. So why does Technova want to have anti dumping duty, they should be satisfied with being a market leader and let fair competition prevail.

It is also note worthy that there are various printers who are exporting print, any such duty will only add to their production cost. Fact remains that Indian printers are barely able to compete with Chinese printers, why should Govt. of India make it impossible to printers to get any export orders at all.

We hope we are heard and justice is done by not imposing anti dumping duty on offset plates.

Thanks and kind regards,

Ashish Rajoria, Director, Aadarsh Pvt. Ltd.

Shikhar Varta, 4, Press Complex, Zone 1, M.P. Nagar

Bhopal 462011 (M.P.), INDIA

Cell.: +91 9893062555, Fax: +91-755-2555449

E-mail: a.rajoria@aadarsh.com

Anti-dumping Commission: Satish Kumar, Director, telephone number 011- 2306 3642; eMail:satishk@nic.in ; or,satprag@gmail.com . You can also download the preliminary findings from www.commerce.nic.in/writereaddata/traderemedies/adpref_Digital_Offset_Printing_Plates_ChinaPR_Japan.pdf

Printers begin to speak out on the anti-dumping duty on offset plates

From license raj to monopoly raj

                               Udyog Bhavan, New Delhi

                       

As we wrote in December and earlier this month, the fragmented printing industry is composed of more than one lakh mostly owner managed plants. For several reasons (both good and bad), these printers rarely speak out or articulate their views on any substantive issue even if it directly affects them or their business. 

However, on the anti-dumping duty sought to be imposed on the import of CtP offset plates, printers are beginning to look at the issue seriously and are speaking out more and more. This is a huge change in the printing industry as the better educated second and third generation owner-promoters are bolder in their thinking, and also more outspoken on issues such as training skilled workers, safety, environment and those of direct business concern such as taxes, imports and competition. These printers are increasingly ready to become visible — they are coming out from under the radar. 

As far as the anti-dumping duty sought to be levied on CtP offset plates, the preliminary findings including the suggested anti-dumping duty rates were distributed by the Directorate of Anti Dumping and Allied Duties of the Department of Commerce and an open oral hearing was held at Udyog Bhavan in Delhi on 10 April 2012. The meeting was attended not only by TechNova which has sought the imposition of the duty and the international plate manufacturers and importers but also by some publishers, printers and printers’ associations. Apparently most of the time was taken up by the lawyers and while TechNova’s lawyer spoke first and last, it seems that the lawyers of Kodak, Fuji and Lucky Huaguang Graphics made several telling points. Reiterating their stand on various issues they disputed the very premise that TechNova has suffered any injury at all, because TechNova’s recent and current financial statements and profit and loss accounts are not available to be seen anywhere, not even by going to the Registrar of Companies (ROC). 

The lawyers also pointed to several places in the preliminary findings where there seem to be typographic errors in the tables of figures which means that there is no way to figure out what is really what — at least not from the numbers and tables given — for an individual printer trying to understand what this means. I suppose that these errors will be examined and explained — and/ or corrected and refuted. At the hearing there was no refutation of these numerical table errors. (Written arguments and refutations have been called for by a date later this month.) Nevertheless, even the computation of the price of imported plates when it actually reaches printers was disputed since these prices are already in many cases the same or higher than TechNova’s. Another significant point was how anti-dumping duty could be applied to plates on a square metre basis rather than by weight, when offset plates are actually supplied in three different thicknesses? How can anti-dumping negate a printer’s efforts to decrease his/her costs by buying and using thinner plates? 

In spite of lobbying with several big printers and newspapers, the only publisher or printer who spoke out clearly in support of TechNova at the open hearing was a representative of the Dainik Jagran newspaper group. One hears that what was not disputed was that since 2008 TechNova has grown by as much as five times and that it enjoys more than 70% market share. In fact TechNova’s own lawyer described it as a benevolent monopoly. It seems that one of the plate manufacturer’s lawyers and the Kerala Master Printers’ Association representative pointed to the obvious dangers of being subject to the benevolence of a monopoly that may see fit to change its mind at any time on any issue. 

Several printers have spoken to me over the past two weeks. A small prepress house in Delhi has even cancelled its CtCP order since CtCP plates would suffer the highest anti-dumping if the preliminary findings are implemented. Another local printer Aman Gulati that I visited, told me that he is completely against the imposition of anti-dumping duties and feels that the owner of TechNova is only trying to make the most of his company in order to sell it off. TechNova of course should get credit and acknowledgement for what it has done to bring modern plate technology to Indian printers. However TechNova is not satisfied with mere praise or market dominance, it wants to own the market in order to monopolise it. This no longer seems possible since the economy has been liberalised and modernised and the printing industry which is slowly getting organised has been one of the biggest gainers. 

To grow further printers will have to invest more than their money, they will have to learn the complexities of business issues and governance that affect them, since many more will arise in coming years, and they will have to learn to speak out. Whatever your views, dare to communicate these to the antidumping commission. This is an important institution — one which is a bedrock of fair play and competition for a modern democracy and for global trade.

– Avinandan Mukherjee

edit8@ippgroup.in

Anti-dumping Commission: Satish Kumar, Director, telephone number 011- 2306 3642; eMail:satishk@nic.in ; or,satprag@gmail.com . You can also download the preliminary findings from www.commerce.nic.in/writereaddata/traderemedies/adpref_Digital_Offset_Printing_Plates_ChinaPR_Japan.pdf

Preliminary findings in TechNova’s CtP offset plate anti-dumping case

Hearing on anti-dumping duties on offset plates on 10 April 2012

In a document (F.No.14/7/2011-DGAD)dated 16 March 2012 from the Directorate General of Anti Dumping & Allied Duties of the Ministry of Commerce of the Government of India, the preliminary findings have been stated on the “Imports of Digital Offset Printing Plates originating in or exported from China PR and Japan.” While the document discusses the issues at some length, essentially the findings propose varying anti-dumping duties against plates imported from Japan and the Peoples Republic of China which will have the effect of increasing the prices of these offset plates. The benchmark price of violet CtP plates has been suggested or indicated at US$6.6; for thermal CtP plates at US$ 5.84; and, for CtCP plates which are also being considered as digital and not ‘conventional’ plates, the benchmark price has been suggested or indicated at US$5.26.

The implications vary from printer to printer and from plate to plate. An approximate calculation which includes a 10% markup for the importer/distributor/channel partner on the net effect of the anti-dumping duty has been made on the basis of one US$ is equal to INR 51.2. The net effect seems to be that violet CtP plates which are currently available around INR 370 per square metre will cost around INR 430 when the anti-dumping duty comes into effect. Thermal CtP plates will go from the current price of INR 320to 360 per square metre to at least INR 380. And, CtCP plates which currently cost about INR 260 per square metre will go up to INR 340.If these anti-dumping duties are affected as suggested by the preliminary findings, the prices of thermal CtP plates will be the least affected and those of CtCP plates will be the most affected.Violet plates will be affected by a value that is in between the other two.

It is ironic that CtCP plates are the most affected, since CtCP devices have also been purchased by printers in smaller cities and towns or by trade houses who supply plates to printers who cannot afford their own CtP of any kind bu tare keen to improve quality. In addition since the manufacture of graphic arts films has been stopped by most manufacturers,increasingly, smaller printers have no choice if they want to improve print quality or compete, but to go to CtCP which they thought was cheaper because it worked on conventional plates that are manufactured by TechNova within India and are also competitively available as imports.

It is true that many of the leading commercial and packaging printers who use thermal CtP plates will be least affected by the price increase since it is likely that they are not buying plates imported from China. However the middle rung printer and the lower-middle rung printers who have bought a used 4-colour press or are thinking of buying one will be the hardest hit whether they buy their own violet computer to plate device or whether they first get their feet wet by buying plates from a trade house which supplies to many printers in the area. Especially hard hit will be the CtCP systems which are becoming more and more popular because there is clear cost saving that brings a film-less quality improving technology based on widely available conventional plates to the smaller towns and cities.

There is a lot of discussion in the preliminary findings about CtCP because TechNova wants to establish that CtCP too is a CtP device and that conventional plates and those especially meant for CtCP are also digital CtP plates. In fact when conventional plates are made especially for CtCP they can be made even more cheaply because the matt layer for vacuum can be dispensed with.

My view is still what it was earlier,that these issues are not meaningfully addressed or discussed by the industry at large because it is so fragmented and inarticulate. It seems that most of the printers associations are also silent if not complicit. The only recourse for printers is to download the preliminary findings and study them and calculate the effect on your business now and going forward. I think that most printers would not like to harm TechNova but would simply like a level playing field in the sourcing and prices of plates so that they can be increasingly competitive and survive.

There is an open oral hearing in Delhi on 10 April 2012 at Udyog Bhavan at which interested parties can attend. I urge printers, publishers and packaging converters to attend and to also ask their associations to try and take a meaningful stand for the community as a whole. You can register by emailing or contacting: Satish Kumar, Director, telephone number 011- 2306 3642; eMail:satishk@nic.in ; or,satprag@gmail.com . You can also download the preliminary findings fromhttp://www.commerce.nic.in/writereaddata/traderemedies/adpref_Digital_Offset_Printing_Plates_ChinaPR_Japan.pdf. We plan to put a poll on our website in which you can also give your views on this matter as well.

Naresh Khanna

editor@ippgroup.in

The smooth TechNova machine and the fragmented printing industry

(This article was first posted on 3-December, 2011)

TechNova has filed an anti-dumping duty case against the import of Computer to Plate (CtP) or what are known as digital plates. This case is directed against both Chinese and Japanese manufactured CtP plates. TechNova essentially says that China is a non-market economy, its currency is undervalued and that it subsidises the plates manufactured not only by Chinese manufacturers in China but also by the three multinational manufacturers in China: Agfa, Fuji and Kodak. However among the multinational manufacturers it only accuses Fuji and Kodak of selling plates at subsidised prices in India and not Agfa which is the technology supplier to TechNova of long standing.

As far as raw material prices being subsidised, this year the Shanghai Metal Exchange prices for aluminium have been considerably higher than the London Metal Exchange rates and the purchases by multinational players such as Fuji and Agfa are not subsidised -- in that sense multinationals in China are part of a market economy. The current aluminium prices are also much higher on the Shanghai Metal Exchange than on the London Metal Exchange. (Aluminium ingot prices in August 2011 – LME US$2,400; SME US$2931 – Source respective websites)
In any case we cannot know at what price TechNova buys litho grade coil from Hindalco or anyone else. Meanwhile the application for safeguard duty on import of aluminium from China has also been withdrawn by the government order of 13 October 2011 which rules the issue as ‘infructuous.’ Thus TechNova can also import aluminium at whatever competitive rates it can find without having to pay any safeguard duty.
By and large offset printers have to their credit upgraded their technologies and taken on many of the infrastructural challenges in spite of being a fragmented collection of smaller companies. In this respect TechNova has always been extremely articulate and has been the opposite of fragmented. It has in fact been able to consolidate or acquire every other organised Indian plate manufacturer over the years – be it Lunar, ATE-Stovec, or Lastra Niraj.
However one cannot criticise TechNova for being articulate or being forceful and effective in putting its case to the government on anti-dumping duties. Nor can one criticise the printers for speaking with several voices or not speaking at all, since no one really wants to take on TechNova or to have less than good relations with what is certainly the largest and most dominant local supplier. Thus the discussion has been muted or non-existent. The AIFMP is supporting TechNova’s case while the only association to speak out against the anti-dumping duty is the Kerala Master Printers’ Association.
“After implementation of anti-dumping duty, the possibility of a monopolistic player calling the shots is a clear obviousity. The argument that the competitors’ plates are being dumped and being cheaply priced is completely false as both Kodak and Fuji plates are priced higher than TechNova,” said the letter written by the Kerala Master Printers’ Association to the Directorate General of Anti Dumping and Allied Duties DGAD. The association also said that it is a common inference that the plates from Fuji and Kodak have superior print quality.
The KMPA resolution states, “We strongly object to the malicious intention of introducing anti-dumping duty by TechNova as it will spell doom to this already fragile print-fraternity and have decided to move the papers to (DGAD) and inform all concerned parties to join this campaign so that a wrong decision is not imposed on the printers of India.”
The fact is that the Indian market is a compelling market for the leading manufacturers of offset plates and the Indian printers must have access to the widest variety of technology and performance. From my point of view Indian printers who want to buy Chinese or Japanese plates should be allowed to do so without having to go through roundabout invoicing techniques to circumvent tariffs or anti-dumping duties. I do not think that the Chinese government is keen to subsidise Indian printers. I also do not think that either the Chinese government or Kodak or Fuji are out to bankrupt TechNova which has continued to dominate the high growth Indian market for offset plates. They only want a fair shot at the compelling Indian market just as the printers want a fair shot at buying whatever plates they find useful or competitive in order to excel or to remain in business. The printers want to continue to compete successfully with Chinese and global printers when and how they choose to do so.

Packaging at drupa 2012

From our several visits to drupa previews we have
gathered that this event is going to be an important
event for both the global as well as the Indian
packaging industry. Exhibitors from all parts of the
world including China and India will be showing a
higher proportion of packaging products. For
instance, equipment manufacturers such as Fuji,
Screen and Kodak will be showing digital flexo
imaging equipment in addition to Esko-DuPont who
have practically had the field for themselves so far.
Epson will be showing a new single pass label press
and there are sure to be many more digital label and
even carton presses at the show.

In fact Fujifilm announced at the preview last month
that it will be demonstrating its inkjet carton press at
drupa 2012. And both Gallus and Omet who are known
for their label presses will be showing narrow web onepass
carton presses at drupa 2012. Goss which normally
talks about its newspaper and commercial presses, will
this time show an innovative development of their
Sunday press for packaging. And one should not forget
that Goss owner Shanghai Electric has a strong product
line of autoplaten die-cutters and folder-gluers.
These are just a few examples to illustrate the fact that
packaging is the strong area not just in India but
worldwide. It’s not just in India that commercial
printers are turning to packaging printing and
converting. And it’s not just in India that converters
are turning to sample-making, short run cartons, and
POP displays for the same packaging customers.

The Indian exhibitors at drupa are also more focussed
on packaging right from the UV curing specialist APL
Machinery, to Proteck, which will show a more
developed and complete offering of its Metamation
software than it showed at the Innovation Park last
time, with several add ons for packaging prepress.
Kohli Industries will be at drupa promoting its gravure
presses and Shilp Gravure will not only sell its special
application engraved cylinders but also further
develop its technology partnerships to strengthen the
packaging industry in the region.

The Chinese exhibitors at drupa also bring a bias for
packaging to this years show. While at drupa 2008 the
Chinese die-cutter and folder gluer manufacturers were
numerous they were shy, while at drupa 2012 they will
be able to point to an already large install base around
the world and not least, in our country. The range of
Chinese suppliers now includes several high-end
manufacturers of automated converting equipment who
will be demonstrating faster equipment with many of
the latest automation features.

We also expect this to be a drupa that is ready for
business networking, alliances and partnerships. There
has already been great consolidation amongst printers
and converters in Europe and we expect that there will
not only be a lot of interest in technology partnerships
for manufacturing in India but a great deal of
discussion between global printers and converters who
are looking to enter the Asian and Indian markets.

As drupa media partners, free visitor tickets were made
available online to our readers from our website. As we
have mentioned, these were snapped up quickly, We
are happy to announce that Hemant Sharma, Anurag
Jain, Jignesh Lapasiya, Jitendra Bhatia, Suresh
Panicker have won free one day tickets to drupa. We
will contact them directly soon and provide them with
the instructions on how to download their free tickets.

The drupa organisers have very generously given our
research company IppStar a slot to present some of
our findings and forecast about the Indian print,
publishing and packaging vertical. We expect a good
turnout of CEOs, senior executives, strategists and
analysts at this event from companies that are looking
for data based on deep domain primary research and
insights and forecasts that point to some of the
challenges and opportunities for our fast growing
industry. At drupa 2012 you can meet me at Hall 9
A39. See you there!

Naresh Khanna
editor@ippgroup.in
+919811172224