In this interview, we chat with Deepanshu Goel, Founder and MD of Creative Graphics, where he shares his professional journey starting in 1998 as an entrepreneur in the flexo printing industry. He explains the distinct advantages of flexographic printing, highlighting its sustainability, cost-effectiveness, and adaptability to various substrates, which has driven its growth in India and globally. Goel also discussed the challenges and barriers in the industry, emphasizing the importance of technology, human capital, and continuous innovation for maintaining high standards and meeting client demands.
Rumela Banerjee: Hi, this is Rumela Banerjee and joining me today is Deepanshu Goel, Founder and MD at Creative Graphics to discuss the companies outlook. Thank you for joining. Let’s start off with your professional journey.
What was the first step in your career and how did it all lead to the creation of Creative Graphics?
Deepanshu Goel: My professional journey began in 1998, right after I completed my graduation from Hindu College Delhi University. My first role was as an entrepreneur in the flexo printing industry where we got an idea of making these flexo plates. I started with a very small setup but the reason was very very clear that we have to create something very significant.
So the initial days were filled with a lot of challenges from understanding the nuances of the printing industry to managing the day-to-day operations of a fledging business. In the earlier stages of my career, I was deeply involved with the day-to-day activities and from the right from the production to the marketing to the managing the finances and everything as you know happens in our very small businesses. So this hands-on approach actually helped me develop a comprehensive understanding of the industry’s technical and business ideas that led to the creation of this Creative Graphics and that was a very very first beginning to be honest.
Rumela Banerjee: So let’s talk about your business – printing. Not much is known from a market perspective because there aren’t many listed companies in the space. So would you give us a gist on how the industry works?
Deepanshu Goel: We supply flexographic printing plates as these are the rudiment part of the printing processes. So there are three types of general printing processes. One is offset which is a very very old kind of a technology but it is restricted to largely paper.
Second is gravure which is also a very very good technology but has a lot of challenges as far as sustainability is concerned as far as the choice of substrates are concerned. Then third is a very upcoming technology which is very very modern and very supportive to sustainability is flexography, for which we have been manufacturing the flexographic printing plates. So it is relatively a new technology in comparison to the other two but it is the fastest growing technology in India and around the world.
So if you go to Europe and other developed markets the printing industry is being ruled by flexography. In India we still have a 10 to 12 percent of the penetration. That is actually very good news because the market is bound to go for a flexographic printing market. So when we talk about this printing it is if you see any milk pouch or any notebook for your child or a corrugated carton to any label on a liquor bottle to pharmaceutical bottle they all consist of flexographic printing plates.
So we have been supplying this for more than 20 years and it is very very fruitful. We always have created our niche by investing in new technologies by superseding the expectation of our client because this market is very niche. It is very very demanding when it comes to services and qualities. So now we are trying to cover geographical reaches and also we kept on investing in new infrastructure and technologies to keep ourselves ahead.
Rumela Banerjee: All right. Specifically your business which is a flexographic printing plate. How is it different from you know regular printing presses or plates in terms of mechanism, cost etc?
Deepanshu Goel: Well as I discussed that you know there are three types of processes – one is offset or lithography which is the oldest known maybe more than hundreds of year processes which have been if you see any book printed or any box or this in a carton was largely being printed by offset. So in offset processes where this largely printing of paper, it is done on the batch process it’s a sheet-to-sheet printing and that is a limitation of this. Second is gravure which is largely done if you see a lays package or other packaging product which are printed through gravure processes so it can print on plastic substrate and other substrate but the limitation is it uses a very toxicants which are largely banned in many countries including some banned in India too and the cost of conversion is very high even the cylinders which are the printing blocks of this industry which are gravure cylinders are being made by a very very toxic process where you have to use the chrome and nickel plating.
So actually in developed countries it has already been banned or restricted, even in China the manufacturing of cylinder has been restricted to a very very remote sites but in India it is still popular because it has been a saturated kind of technology it has been there for a while so people are having much comfort with the technology and in flexography they are the rubber blocks so the advantages are that the cost of conversion is very low it is a very very fast process it can use water-based ring and the substrate when we talk about substrate means the paper or plastic or it can use any wide range of substrates, it also supports sustainability in a big way and it has been using natural rings water-based rings and the wastages are very very low so it is the fastest growing it is being preferred choice of the all the multinationals because they have been pressed for the sustainability to reduce the carbon footprint and the flexography is the only technology which has been supporting the sustainability, also the economy of printing.
Rumela Banerjee: I think the biggest expense for you would be the investments that you make in the machinery. So far, how much is that and what kind of capacity do you have?
Deepanshu Goel: So you know when you start a factory which is service-based one of expenses definitely the good type of machinery but in our industry you know one of the main part is also the human capacity, the human capex where you know you have to train people there are people are being trained on different software the software are very very important in this industry, the training the people who are working on those software are very specifically trained for the same kind of industry because you have to have the knowledge of the printing process you have to have the knowledge of the software you’re working on, you have to have the knowledge of the inks, you have to have the knowledge of the paper and so many other variables. So it is a very big entry barrier for the people because of the high capex and you have to keep on updating your machine because the printing scenario, the expectation of a client is very, very dynamic and it keeps on changing.
We are required to fulfill the requirement of a client by innovation technology and by very, very timely services. So one is capex for sure, second is software and other technology, third is human capital spending on their training and imparting new technologies. So as far as capacity is concerned, 3D graphics is the largest in India with 8 factories across the nation and the idea was to provide because there is a lot of demand from the FMCG sector where they don’t want to give that time to their competition to think what is the next change.
Time to the market is very, very fast so it gives a distant advantage to us as far as production capacity is concerned. We have close to 1.5 million square centimeter capacity and still 70% utilization, still a lot of capacity to be utilized.
Rumela Banerjee: What impacts the cost of your service and thus margins?
Deepanshu Goel: Several factors impact the cost of services and thus margin for creating outputs. The primary influence includes the cost of raw materials, prices like the conversion rate of a dollar to rupee or the cost of people is very high in this kind of a trade where you have to keep on updating and imparting new technologies to people. But on a longer perspective, we sign a year deal with a lot of suppliers who have been importing goods on our behalf so we are able to stabilize the cost of the raw material but the different cost of people I would say is one of the major impacts into the cost into the margins for us.
Rumela Banerjee: Are there any barriers to entry for your kind of business?
Deepanshu Goel: Huge. So when it comes to manufacturing of flexographic printing the entry barriers are huge. It is not about the infrastructure only, infrastructure anybody can buy, machine anybody can buy nowadays with so much of finance available for a lot of people but you have to have hands-on training of all the processes. You should understand the basic nitty-gritty of making printing because even a small dot, if you see any printing paper, film, if you see a mother-dairy bag, you will see very, very small dots.
The size of the dot can be as small as the thickness of your hair. To get that kind of a sharpness onto the plate onto the print, to get the exact simulation of your colors, if you see any face and that color has to match to the flexographic printing. A small fraction of change can make a huge difference which is not accepted by any of the brand owners.
So you have to be very, very precise. You have to understand the knowledge of the colors. You have to understand the knowledge of the printing plate because every printing plate has a different connected stage. It has a different surface tension and dot structure and a sword hardness. A lot of things are dependent on substrate. If you’re printing on a paper or a film or a metal substrate or what kind of inks you are using. Are you using a solvent-based ink or a water-based ink or UV inks. So that kind of knowledge is huge and it is not a business where you install a machine and start pressing a button and get the plates out. It’s a whole infrastructure and it’s like a Zomato business where you have to build an infrastructure where you want to give the best of the quality in immediate terms because nobody waits in this kind of a business. So we have built an infrastructure which gives precision, which gives the right amount of quality of plates and at the right time.
That requires huge knowledge. It’s not easy to be built by anybody who is new to the industry. It is going to take a while.
Rumela Banerjee: Who are your top clients or industries?
Deepanshu Goel: So when it comes to flexographic printing, our business is spread across all the industries. Right from FMCG we have Tata Chemicals to Unilever, to Mother Dairy, to Procter & Gamble, to Deca-Demiser, to all. These are the direct or indirect customers of ours.
And if you talk about the liquor, so everybody like Pernod Ricard to almost everybody. And if you talk about the pharmaceuticals, right from the Mankind, to Sun, to Zydus, to Cadila, all are direct and indirect have been buying through us. And there’s one of the FMCG.
And if you talk about notebooks, ITC is our customer. If you see a notebook of your child, this is being printed through a flexographic printing page. So right from the ITC to Dabur, to the Himalayas, a lot many.
Okay. All the boxes are Samsung, LG, and Panasonic. So our client base is spread across all the industries, all the verticals.
Rumela Banerjee: Okay. Now if you can tell me, what would be the factors that drive growth for your business? We have seen a great rise in sales in the last three financial years. What do you think has led to that?
Deepanshu Goel: There has been a lot of growth in the flexographic printing process in India.
Because still the market share of flexographic printing in India has been very low. And a small change gives a very big thrust to the demand because the percentage becomes very, very high because the note base was very low. If you see, there has been a lot of impetus and focus on sustainability.
And flexographic is the only process which supports sustainability that is getting a lot of growth for us. And a lot of people are going into CI Flexo, which are very, very big investments and the market is going to flexographic printing, which is bound to get a huge, huge chunk of growth for us. Also, there is a consumption, if you see, India is a very huge consumable market where the new generation has been.
A lot of disposable income is coming to India and that gives a lot of support for the FMCG. So there has been a growth of FMCG or the white goods or even the liquor kind of industry. It is directly helping our flexographic industry to grow.
Secondly, we are also exporting the news board market to Africa and the Middle East has been growing constantly. So that is also giving us good growth as far as the flexographic needs are concerned.
Rumela Banerjee: Okay, you have been in this business since 1988. What is your vision for the company in the next three to five years?
Deepanshu Goel: So, I know, I like to know the company was started from scratch and we have built now with eight factories across India and we have made up a name when it comes to flexographic printing where everybody, almost everybody knows Creative Graphics for its high value qualities, supplies and ethical approach. So, we also expanded into something different, we have started a new company by the name of Wahren India, which is 100% subsidiary of Creative Graphics, which is named after pharmaceutical packaging. So we are also a business being used in that sector.
We also started another company by the name of CG Premedia, which is directly linked to all FMCG and other multinational brands that we have been supplying right from the start, working on the 3Ds and different kinds of services which are required by the companies. So, hopefully, within three to five years, we are going to witness a huge growth as far as the three services are concerned. We are focusing on improving the quality, improving the services and to optimize the cost.
We are very, very optimistic as far as our growth is concerned for the next three to five years.
Rumela Banerjee: With that, we will wrap up this discussion. Thank you for your time.