Amit, Kapani from AT Inks shares his experience in witnessing the ups and downs during the pandemic and about the revival of the signage industry.
Revival of Signage industry during Covid times
We have seen a huge drop in sales in the first quarter of the financial year 2020-2021 ( April to June) on account of lockdown and practically no printing happening in this period. The second quarter ( July to Sept) saw some pickup, however, it was a dismal quarter considering the historical sales we have seen in the past years. However, from October the pick up in sales has been spectacular with very robust numbers coming in the last 6 months of the year, despite a serious increase in raw material prices.
This is a clear indicator that the industry opened up and all the pent-up demand came in the last 6 months of the financial year (Oct to Mar). The sudden growth in the market brought in various challenges, one of the biggest ones being a steep, steep rise in Raw Material Prices.
As the Industry world over started to consume, the chemical industry ( raw material suppliers) went into a series of Shut Downs and Force Majure announcements. The scale of Force Majures at one time was such that has never been seen ever before and this crippled and choked the supply lines completely.
Every Raw material price has increased from 20 – 300% and this has created a nightmare for companies such as ours to balance our sales output values with our inputs. The market was supportive of our efforts at increasing prices as all ink manufacturers were forced to increase prices, however, it has been a tough call for the industry with Ink prices up by almost 25 – 35% compared to Pre-Covid prices. Add to the problem, the shipping routes and the trade imbalance created a serious shortage of empty containers the world over leading to an unprecedented increase in Freight costs. This problem also continues to remain with the blockage in Suez Canal only further fueling the issue and is expected to remain for a good 3-4 months more.
The prices continue to stay high and are not coming down as yet, though, we believe that prices will soften from these unrealistic levels in the next 4-6 months. Demand on the other hand has been Robuste for us, this we attribute to various factors such as pent up demand due to practically no printing in the first 4-5 months of the financial year 2020-21, Need for change of Signage as everyone wanted a fresh start after the lockdown, dependence on Chinese imports reducing – The India – China border troubles made an initial impact with Be Indian Buy Indian Concept picking up, Freight Cost escalation – this caused a major issue with imports and thus saw a lot of people looking at local manufacturers for support, Low Stock levels across the board – With lockdown creating a sentiment of fear in businesses, the stock pipelines of not just raw materials, but also consumables and inks were maintained at very low levels. In the past 3 months, the stock levels at dealers, distributors, printers are almost back to pre-covid levels.
Changes in product/services demand in the market
We as the largest Inkjet Ink Manufacturer in the Country played a key role in ensuring that the availability of Inks is not curtailed. It meant that we had to overstock material at times and had to plan almost 3 months of the demand to ensure that goods are lined up comfortably for the industry. Our procurement team had to fight with suppliers with increasing prices and delayed shipments being the norm for all raw materials, but, they took the challenge well. Additionally, we provided online support, phone support to our end-user customers as well as our sales network to ensure they could start their machines, clean the machines before they restarted as well as ensure that the re-start was smooth for the end-user. Most of all, we took a serious hit in our margins, to accommodate and cushion the rise in the prices of our Inks to ensure that the market is not given a rude shock even though we had to take the blow onto ourselves.
Additionally, our R&D was working full time and we are pleased to announce that we were able to develop & introduce many new ink formulations in this period such as our Ultra Elite range of UV/LED Inks which now caters to every printhead in the market and is available for Rigid and Roll to Roll applications. We introduced Textile Reactive Inks in 8 Colors for some popular heads in the market. We introduced Textile Direct to Fabric Disperse Inks and strengthen our Sales of Textile Dye Sublimation Inks. We added 3 new OEM Customers in our fold as well besides various new dealers and distributors during this period.
Our Sales in the last 6 months have shown a clean recovery and a growth in sales as compared to Historical quarters in the past.
Role during the challenging times
Our Role has been that of a Stabiliser, a shock absorber for the industry with the huge increase in prices we played the role of taking the full extent of the hit onto ourselves and slowly and gradually transferring it to the industry (though most of our customers will not want to admit this, this is indeed the situation).
As a company with ethical practices, we ensured that we did not fire anyone or deduct any salaries or reduce any salaries in the whole of last year. This is an achievement that we are personally proud of and happy that our employees went home with full salaries and on-time salaries even though the company was not able to generate revenue. We hope this act of ours; will stand us in good stead when the time comes.
Our Product Development team and our R&D team have shown exceptional spirit to churn out some excellent products in these times that will bring good growth shortly for the company.
We also took up the responsibility for the society at large by starting to manufacture Sanitisers and N95 Masks to cater to the need of the hour (www.atcareproducts.com) and the products include the only Digitally Printed N95 Masks available in the Country. We took ISO 9001, GMP, and BIS (ISI) certifications for these products as well.