Lockdown and unlock implications on the Graphics Arts Industry

The Coronavirus crisis has not only changed our lives but has changed the way we do business as well. With the country going under lockdown and then gradual phases of unlock, Print & Publishing tries to find out the overall impact of Covid-19 on the graphic arts industry.

Here, Nikumb Bhalchandra,Managing Director, India & West Asia Cluster, Eastman Kodak Company; Neeraj Dargan, Managing Director, MR Sheetfed India Private Ltd; TP Jain, Monotech Systems Limited and Uttara Kaushal Bhalla, II Executive Director – Operations II, Provin Technos Pvt Ltd share their views on the same.

P&P: According to your assessment till now, what has been the overall impact of Covid-19 crisis on our industry?

Nikumb: The print industry has been affected by Covid-19 around the world. Our industry has always been in a constant state of change and the pandemic has accelerated this pace and printers need to adapt to this. Kodak is helping customers to cope with the “new normal.” One example of this includes our PRINERGY On Demand cloud-based workflow suite that enables remote work while protecting against cyber-attacks through secure, redundant, and real-time security monitoring.

Neeraj: The print industry is dealing with immense uncertainty as the effects of COVID-19 on its businesses and the economy become more widespread. The majority have cut costs and put investments on hold. An expected decline in print volumes is being tempered by increased demand in the healthcare and government sectors. This pandemic has brought disruption to our way of life and to business on a scale previously unknown in peacetime, fear for our health and the health of those around us. It is very challenging to maintain field services activities. They too are now returning, if not to normal, as near to as is possible.

TP Jain: From survival to revival, these 2-3 months have been very challenging for us. COVID-19 has turned out to be a global crisis and evolving at a very rapid unpredictable speed. No industry or individual is immune to this and it has affected us the same way as it has affected many other Industries. Signage/printing Industry is no different. We can clearly see an adverse effect of this ongoing pandemic on our industry as the work of jobbers have lost, they are left with no or very less work to do. Same goes for the corporate and local printers as well, all of them are suffering from this, which in turn affected the overall process and the industry.

Uttara: A very serious impact on supply chains across the globe and especially impacted the physical economy more than the digital one. COVID -19 has affected the industry in a much bigger and a drastically different way than the 2008 recession. We still have to get a clear picture of the impact as many parts of India are still under lockdown or with very little activity. The impact on the industry is likely to be clear only in the next quarter.

P&P: What challenges are you facing as printing machinery manufacturers and how are you dealing with the same?

Nikumb: We have replaced face-to-face customer meetings with virtual tools like video conferencing and online demonstrations. As banking facilities have slowed down and intermittent lockdowns come into force, we are seeing delays in the decision-making process within the industry.

Neeraj: We are not the printing machinery manufacturers, we are the sales and service provider. We are exercising strict Covid-19 security procedures, as our technicians and others may visit customers and other premises. Many of our employees have been, and many are currently, working from home for the time being. We have enabled those that are unable to interact in person to remain in contact with business associates and colleagues via video call.

TP Jain: The most immediate challenge from COVID-19 that we faced was the affect occurred in the jobber segment due to loss of local and corporate jobs and the uncertainty towards the future. The overall demand has gone down because people are now uncertain of the future and a huge downfall in the cash flow has been observed in the duration of COVID crisis. This disruption in the jobs, low demand and cash inflow has an exponentially effect on us on a larger scale, and hit us with a lag in terms of new orders, consumables and pending orders too.

Uttara: Challenges are multifold. The world has changed in the last 6 months and we still don’t know where we are heading. Virtually no demand, manpower shortage, logistic difficulties, travel restrictions, drained cash flows are some of the difficulties apart from the new way of life and safety protocols. Dealing with the pandemic involves a two-fold strategy: survive and adapt. We are surviving by customizing our cost structures and adapting by preparing for the near and long term future through innovation in products, services, operations, etc.

P&P: With printing exhibitions like Drupa /Label Expo being stalled, how has it affected your plans for new launches, client interactions, collaborations, etc?

Nikumb: Kodak already announced its major product launches (previously planned to be announced at drupa) on the 15th of June at our virtual press conference. We are keeping in touch with our customers and partners through virtual conversations, plus we are hosting product webinars and delivering CRM campaigns. Our collaborations, such as the partnership with UTECO, continues to gain pace.

Neeraj: Drupa represents an indispensable platform for industry participants, providing orientation, impetus and, above all, satisfying the demand for face-to-face meetings and world of experience to a high degree. The current situation is affecting all industries worldwide in an unprecedented way and the effects of the coronavirus are already having a drastic impact on public and economic life. A customer’s interaction with a company can trigger an immediate and lingering effect on his or her sense of trust and loyalty, now we have to describe and show our new and old clients for our new launches through video conferencing, mails etc instead of face-to-face interactions.

TP Jain: Those are some of the major events in the printing industry and the news of them getting postponed is very difficult to process. As the whole printing industry waits for these events to showcase their new technology, new product launches, new technologies and now the whole scenario has been changed and everyone has started planning differently to cope up with these changes. We had also planned certain launches and new technology to showcase but we look forward to launch them differently.

Uttara: As a result of “no exhibitions,” new product launches are staring at an uncertain future. Amidst the Pandemic, RMGT made a big announcement and launched its flagship model 970 model and it has the most sought after functions in a compact high-performance press with impressive cost performance for multi-variety small-lot printing. The big change, of course, was that it happened without the “exhibition.” While this reduces the cost, it also puts pressure on digital advertising, and penetration of such mediums is not as fast as a 2-day exhibition.

About client interactions, the lockdown gave us a good opportunity to connect to all our customers. We conducted two webinars for our customers explaining the features of the machine they are using, followed by a Q&A session. We were overwhelmed by the response received, we had more than 100 participants attending the webinar. Video Conferencing will be the new normal for doing the meeting until the situation improves.

P&P: Have the sales started picking up now after the lockdown is over?

Nikumb: After the lockdown announced in the last week of March, our April sales dropped quite a bit, but since then we are seeing month to month growth in sales.

Neeraj: We expect a strong demand for sales once normalcy returns fully. Marketing focused on getting clients through the COVID-19 crisis and to speed up when it’s over is entirely appropriate. We need to close deals that are “close to cash,” but not at the expense of missing opportunities during the early stages of the sales process, In today’s scenario all projections and targets are meaningless, we are now working on conservative projections.

TP Jain: The lockdown is definitely over and we all want this crisis to be over also, we all want to get on with our lives, but the hard reality is that this is not even close to being over. We are still in the Unlock 4.0 phase, things are not moving as they should be, as we want them to be.

We are still at lag and coping with the loss occurred during the lockdown phase. We are clearly in a damage control mode and to some extent, we can say that the sale has been up gradually but not very much as situation is uncertain and different regulations are being observed in different parts of the country.

Uttara: As I have mentioned that the industry is not in a position to invest in a new machine, the pandemic has affected the world financially as well as emotionally. It will take another 6-8 months for the industry to come back to normal. Yes, the sale of spare parts is happening since that is an operational requirement.

P&P: Which of your products are more in demand now?

Nikumb: SONORA Process Free Plates are in demand as these require less labour in prepress, which is the need of the day. Kodak’s Thermal CTPs are also in demand due to their stability, accuracy, reliability, consistency and significant power saving, low maintenance cost and long life against all competition. Besides, interest in PRINERGY On Demand, which ensures business continuity and security for customers, has also grown.

Neeraj: We are getting good response for ROL700, upgraded to 700 HiPrint & sold as 700 Evolution since 2015 & now in May 2020

Evolution family just got bigger with addition of 700 Evolution Elite / Speed / Lite versions.

TP Jain: As compared to other products, our UV flatbed printers are still in demand. We have recently installed our UV flatbed/hybrid printers in Pune and Hyderabad and few are already in pipeline and we are hoping that we will see more installation of our UV range of products across the country over the coming period.

Uttara: This is a new world and there will be a new order. Let’s wait for what future unfolds for everyone. As of now, the capital investment is completely standstill.

P&P: What about after sales service in during Lockdown & Unlock phases? As people had to go for immediate lockdown, lot of printers had to deal with machine servicing before restarting.

Nikumb: Kodak’s service team and our channel partner’s service team has started visiting customers for new installations and attending the service calls, keeping safe at all times. Many service issues can also be handled remotely with our diagnostic tools.

Neeraj: The printing industry is receiving mixed responses in the wake of this dire pandemic, the printing firms with the maintenance of their respective machines during downtime. Also, as a long shutdown could harm the printing machine’s head, sales teams would find it challenging as there would lots of virtual visits and discussions with clients.

We have found that our online meetings have been very productive with good participation during this lockdown, when it comes to fulfilling demand of customers of machine servicing amid social distancing. We also take care of our technicians as well. We offer support needed over phone or from remote mode to our customers.

TP Jain: This is the time to act while also preparing for the future. We need to preserve the integrity of our customers and protect them while preparing them for their operations in the future post COVID-19. It is very important that we show our support and create a sense of confidence towards them in these testing times and to do so we have taken multiple steps to ensure smooth running of customers operation post the lockdown. We have launched AMC and buyback schemes to our customers wherein we have given pocket friendly offers to the customers so that they can start their machines post-lockdown without hitting for a big expense.

Uttara: As the lockdown happened suddenly, machines were not properly shut down and they were in that condition for a long time. While nothing happens if the machine is idle for a long time but this time, the situation was different. No one knew that it is going to be a to month-long lockdown. So, restarting the machines later required precautions so that the customers don’t suffer further damages. One of the webinars we did for our customer was on how to restart the machine and what all precautions are to be taken in switching on each section in the press. There was a checklist provided accordingly to which our customers executed the machine start process and we did not face any major issues in the machine. As and when required we were giving the support on call until and unless it was a case of breakdown.

We have to look at both sides, cater to customer requests and the safety of our engineers, taking into consideration both the issues, we are now trying to support our customers in the best possible way. We have engineers stationed in major cities so there is no issue in providing service but the real problem is in supporting customers in smaller cities as a mode of travel restriction are there and transportation is a challenge.

P&P: Taking about the Chinese equipment, do you feel in our current circumstances we can deal with Chinese equipment?

Neeraj: I don’t think that we can deal with the Chinese equipments in future as it already banned from India. We always try to convey our customers to purchase good quality of materials/spare parts, which has warranty and trust instead of Chinese equipments.

Uttara: The most important factor is that we have to develop our capability. Until we do, every talk will be in the air. For businesses to run successfully, every part of it should be cost-effective. At present, we cannot match their costing levels and until we develop ourselves, we cannot do without them as the market will not support increased cost.

P&P: What positives and negatives do you see in this event?

Neeraj: Today, China’s economy is much more deeply intertwined with the world’s economy. India, the world’s fifth largest economy and a major importer of electronics good from China, stands to be affected by the higher prices of Chinese electronic components caused by supply shortages. Reduced imports from China are also likely to intensify food inflationary pressure.

TP Jain: There are two sides to a coin there are two sides to every story. We can see this event as a setback or we can sense the opportunity in this, clearly this has a lot of negatives and the changes occurred from it will not be easy to cope but there are positives in this too, we will have to improve our technology, products continuously and then there is an opportunity to become more and more independent.

P&P: What do you feel how will the print industry be after the Covid crisis is over?

Nikumb: We expect more customers to opt for environmentally friendly process free solutions, such as our SONORA Plates, for their prepress operations. And cloud-based workflow, such as PRINERGY On Demand can contribute to increased automation of workflow processes. Printers will look to add digital printing to their portfolio of services looking for technology that gives them the flexibility to move more high-volume jobs from their offset  machines, while also delivering short-run and customized jobs with exceptional quality

Neeraj: COVID-19 has plunged many businesses into a paralysis. The majority are now focused on weathering or surviving the crisis to emerge intact when the new normal arrives. Some of the changes invoked may be permanent; it is likely that many companies will continue to support and encourage flexible working arrangements

TP Jain: Everyone is adopting the new normal and gradually the confidence is building up and things are moving. We think business have started coming on the track and should be completely normal once any concrete treatment or vaccination comes. The show must go on.

Uttara: It will be a new world order and with the current situation, we are in for challenging few years ahead of everyone. Surely, the market dynamics will change and some sectors will be on the rise and there will be a sunset on some. The print industry will surely bounce back though it will take time.

P&P: Your long-term view on this particular situation?

Neeraj: The global COVID-19 pandemic has presented executives with the most challenging times in their careers. The social impact of their decisions is under the spotlight as they try to balance the needs of all key stakeholders—customers, partners, suppliers, and society in general. With printers, at large, facing irreversible consequences, it will affect the market trends as well. In the long term, companies will have to start adopting new strategies, making radical changes to ensure that they are not in a situation, which is similar to what they are facing currently as a result of a possible future pandemic/disaster. The future will always be brighter and better, that is the nature of mankind

TP Jain: This has a huge impact but hopefully it should be over as soon as possible. Many agencies are working on the vaccination and once it comes there will a confidence in the people. We take this time as an opportunity to invest in our R&D and strengthen our technology. We are strengthening our facilities so that we can offer excellent products and solutions.

Uttara: The definitions of long and short-terms have changed. The short term for us is weeks now and the long term could be decades. Since companies are a going concern, it is important that each company records this pandemic as one of its most critical lessons in the book of business so that after decades it can look back in hindsight and say “We took the right steps during our first pandemic and that’s the reason we have flourished despite many such challenges being thrown at us.”