Share to Benefit forum: Is the shift to outside Mumbai inevitable?

Samir Lukka
Tuesday, May 17, 2011

It's not easy operating in the city with escalating real estate and a squeeze on pricing and strife. So, is it time to vacate the famed industrial galas of Mumbai?, asks Samir Lukka

On 4 May, 2011, the Bombay Master Printer’s Association’s Share to Benefit forum turned its expert eye on Jitesh Agrawal of Print & Pack.

Agrawal in his presentation focussed on the importance of a high-profile print business which operate within the city limits. He said: "Many industrial demarcated areas are shifting. One of the best examples is of Lower Parel. The place was known for its industries and considered to be a print hub in Mumbai."

The rising price of real estate is not helping either. Currently rentals in Mumbai range from Rs 80 to Rs 150 per sq/ft whereas the purchase price is as steep as Rs 15,000 to Rs 25,000 per sq/ft. Stressing on the main advantage of taxation and movement of raw materials, Agrawal added: "There is always an entry tax to get goods within city. The octroi tax for Mumbai is 5.5 % whereas for Navi Mumbai it is 1%. The printer in the city ends up paying 3-4% higher price."

Iqbal Kherodawala of Printline Reproductions shifted to a unit in Navi Mumbai in 2003 and is more than happy to explain why Navi Mumbai is a successful model: "Navi Mumbai is a planned city and part of the larger plan to de-congest Mumbai. Print firms can procure open plots. There’s reliable supply of electricity, and good motoring conditions, with flyovers, broad roads and parking lots."

Kherodawala adds: "One of the challenges of being in the city centre is government policies. If you see what is happening in Delhi, the writing on the wall is clear. The government is forcing the industries to move outside the city. It has already been materialised in the major cities of world like New York and London where the industries have been pushed out the city limits and I don’t see any reason why the same thing won’t happen in Mumbai too."

Feroze Reshamwala of Lucid Prints’s  planned move to Navi Mumbai was based on a most important factor of "the growth of press being directly proportional to the area it has. Anybody from Navi Mumbai will be able to offer the job at a much faster rate. Because he has everything under his control. The job is not dependent on outsourcing work for CTP, or other finishing work like lamination and punching or for post-press. And because of the availability of space, most printing presses outside city are comprehensive units. This means better controls over the scheduling of jobs and delivery."

Passing trade
The general irrelevance of passing trade is a common theme among print owners. Whether they are located in a busy city-centre location, like Lower Parel or in a smaller conurbation. "We don’t make money from walk-in business," concurs Arun Rawat, director of Print Services, which is located in Shah & Nahar. This seems a common refrain among Mumbai’s top print firms. "It will help a niche printer for whom client proximity is imperative to have an operation in the city too," says Faheem Agboatwala, chairman , StB Forum and director at Hi-Tech Printing Services in Mazgaon.

A hybrid model
"We are adding a new unit in Taloja, but we shall maintain our exisiting unit in Mumbai." says Animesh Kejriwal of Parksons Graphics which is setting up a book manufacturing unit in Taloja (40 kms from Mumbai). He feels, "hybrid is the way to go." Most print firms seemed to tilt towards a hybrid model of production unit in Navi Mumbai or even Vasai, Palghar and Umergaon. But unlike Parksons Graphics which will have two production plants, others prefer a production unit outside the city limits and a marketing set up in the city.

Says Fred Poonawala, "An office with a meeting room in the city is helpful. You can display the jobs. Customers walk in and discuss jobs. The long print runs for the customer can be catered by the unit outside the city and the short runs by the one within the city. A hybrid model enables you to cater to every demand of your customer."

"It is important to have a service office within the city which continues to collect data, CDs, proof dummies from the clients and sends the final job card to the unit for printing," adds Jitesh Agrawal of Print & Pack.

Proper pricing
The other problem in Mumbai is the astronomical cost of property in Mumbai. PrintWeek India did a mini survey of the print shops in Mumbai. The travails of doing business in the industrial galas have been well-publicised – some 63% of print shops bemoaned about the lack of space and a few big names have announced closures or a shift since. Kherodawala says: "Let’s face it, a printer is hardly a destination outlet."

Combine this with the fact that typical print firm customers and SME businesses are now likely to have access to sophisticated office printers, and a plethora of online printing services, it begs the question: what is the point of a print service provider remaining in Mumbai?

Bobby Phillips of Velpack says: "Our firm is a BRC/IOP print firm. It would be impossible for me to achieve audits and certifications in Mumbai. Today, this is a need of the hour because there is an overall imporvement in utility
services."

 Within the city - IOutside the city - 1Within the city - 2Outside the city - 2
Price (sqft) 20,0003,000
20,000
3,000
Area (sqft)
4,000
4,000
4,000
4,000
Land cost (cr)
8
2.4
8
6
Machinery (cr)
4
4
4
10
Turnover (cr)10
10
10
25
Margin15%
15%15%15%
Profit
1.5
1.5
1.5
3.75
ROCE13%
23%
13%
23%
*As presented by Jitesh Agrawal

Jayant Printery benefits from shift to Palghar

"We did research among our customers like Sundaram before shifting our operations from Shah & Nahar to Palghar," explains Shashank Shah of Jayant Printery. "The 60,000 sq/ft plant produces books for the domestic market as well as exports. With the shift outside Mumbai, we could print do volume work which paved the way for 30% exports."  

The biggest advantage of the shift to Palghar for Jayant Printery was the change in restrained mindset which influenced buying of a particular machine that would fit within the available space. "Five years ago, we selected a MOV instead of a SM 72V because of space constraints. Shah is of the opinion that,
"The focus should be on the material movement. The machine workflow can be adjusted, plus material movement can be minimised in a bigger space."

Shah says print firms should plan their "estimate for current and future power requirements. A tool room, a knife grinding machine, diesel genset for power cuts, proper security of the material, cleaning devices like automatic floor cleaner  on the shopfloor, and a forklift for material
handling.  
 
Conclusion
A drive through Navi Mumbai suburbs is a good indication of the money clout of the region. There are banks, restaurants, malls, multiplexes, top brands and an International Infotech Park. Iqbal Kherodawala states: "With regard to civic amenities such as water and power supply and waste disposal, the planners have taken care to provide facilities. For instance, aerated lagoon-type sewerage treatment plants have been developed for each node and the effluent discharge conforms to the Maharashtra Pollution Control Board standards."

One thing’s for sure, the print game is changing. Thinking back to printshops past, Fred Poonawala says, when his grandfather wanted to set up a unit in Prabhadevi, there was a hue and cry. Today Comart’s unit opposite the Siddhivinayak temple is as eponymous part of the city as can be. Tomorrow, a print unit in Palghar could evolve in the same way.

Advantages for being in Mumbai
  • To and fro for staff using public transport
  • Can capitalise on being in heart of local business
  • Certain applications can be outsourced
  • Quicker turn-around of jobs
  • Having all the city’s amenities at the doorstep
Advantages for not being in Mumbai
  • Professional managed printing plants
  • All operation in-house, under one roof
  • Size/layout of unit can be ideal
  • No traffic/parking issues for customers and deliveries
  • Lower rental / property costs
  • Mumbai is expanding; travel time is reducing


About StB
StB was conceptualised at the BMPA Print Summit, February 2007. The first meeting was held on 2 May 2007. Members of the forum meet on a monthly basis to explore training, technology and management upgradation. StB is the brain-child of the chairmain, Faheem Agboatwala of Hi-Tech Printing Services. The sessions are closed door in which a range of subjects such as chemistry on the press, taxation, tackling truant customers, MIS solutions, etc are discussed. The StB session on 4 May was hosted at the PrintWeek India office.  

The next StB session on 8 June 2011 will also be hosted at Pipal Conference Room in the PrintWeek India office. This will include a discussion on data security, export benefit schemes, costing methodology, value-added printing lead by Bimal Mehta of Vakil & Sons.

Write to stb@bmpa.org if you are interested in setting-up a StB forum in your area/region. 
Snapshots from the StB session on 4 May 2011




Jitesh Agrawal and Shashank Shah who made the presentation









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