book printing industry vision 2017

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Vision 2017

Books for the World – Made in India

Pramod Khera

Executive Director – Repro India Ltd.

17th November 2011



INDIA IN THE BOOK PRINTINGWORLD



Global Print MarketN. America, W. Europe & Asia – 90% of Global Print Market

2006REGION MARKET

VALUE(US$MILLION)

MARKETVALUE

(%)

NORTH AMERICA 198,137 32.5

WEST EUROPE 183,379 30.1

ASIA 138,642 27.6

LATIN AMERICA 31,198 5.1

EAST EUROPE 13,227 2.2

AUSTRALIA 9,947 1.6

MIDDLE EAST 3,406 0.6

AFRICA 2,206 0.4

TOTAL 609,809 100.0

2011 (Estimated)REGION MARKET

VALUE

(US$MILLION)

MARKETVALUE

(%)

ASIA 217,004 30.0

NORTH

AMERICA

214,515 29.8

WEST EUROPE 205,903 28.6

LATIN AMERICA 44,448 6.2

EAST EUROPE 20,022 2.8

AUSTRALIA 10,678 1.5

MIDDLE EAST 5,165 0.7

AFRICA 2954 0.4

TOTAL 720,690 100.0

Source: Pira International 2007



India – Fastest Growing Print Market Globally:

Increased Outsourcing trend



Overview of Indian Print & Publishing Sector...



...Overview of Indian Print & Publishing Sector



THE OPPORTUNITY



Domestic Opportunity

• India has a healthy consumption of books. The bookdemand in India is propelled by

– The GDP growth,

– The reading habits of the burgeoning Indian middle class

– Increase in literacy rates and

– A young and knowledge hungry population.

• Publishers forecast that India will become the biggestEnglish language book-buying market in the world.Today, it is the third largest after USA and UK.

• The good news is, India is poised on the cusp of a greateducational revolution.



Demographic Structure favors investment in

Education

• India’s population in the age group up till 24 yearsconstitutes 52% of the total population.

• This showcases that more than half of the country’spopulation falls in the target market for providingeducation and related services.



Domestic Opportunity

• The Indian books market, estimated to be $1.75bn in size, can

be divided into two segments – – Text books ($1.2bn) and

– Supplementary books ($510m).

• However, private publishers have access to just 60% ($1bn) of

the market given the monopoly of state boards and NCERT in

95% of the school text book market.

• A large chunk of the schools are vernacular, and thus text

books used in these schools are in various regional languages.

70

30

85

15

50 50

20

80

0

25

50

75

100

Pri ma ry Pri ma ry / Se c(Std I to X)

Higher Sec(Std Xi to XII)

Post HigherSec

Regional English



Global Opportunity

The global publishing market in the English language was

approximately $270 b in 2008.

The global educational publishing industry stood at

approximately USD 22 billion (8%) in 2008.



Export Opportunity – Are we missing the boat?

• China is investing heavily to become the largest book printers to the

world

• Even Thailand is home to a thriving publishing industry of 1,020

publishers and over 4,700.

• Indian print exports in 2009 were worth over $1.5 billion, estimatesfor 2010 are that we could have topped $2 billion.

• Even so, we’ve not monetised our position, despite having a

language advantage.

•

Our trade advantage is visible in Bhutan, Nepal and Sri Lanka (werank number one), Nigeria and Kenya (we rank number two), Oman

(we rank number three after UK and UAE).



The Opportunity for India

• Increasingly, global publishers are looking to India due to the

country's advantages of

– English language,

– Digital and IT competence and

– Better copyright protection environment.

• Global publishers are eyeing India.

– Besides print, they are also looking at India as a market for their

content.

•

Therefore can India become an outsourcing hub for publishingservices?

• The Indian book printer firms have an opportunity, but we need to

think big and think collective.



TWO-PRONGED STRATEGY FORVISION 2017



2-S Strategy to address the Domestic & Exports

Opportunities

Solutions

• From Print to Solutions

• Premium pricing

• Tie-in clients – Relationships across the

client's organisation

– Align with client’s strategies

–

Control over content• Helps achieve scale

Scale

• Execute Large Orders

• Invest in new Technology

•Invest in Automation

• Economies of Scale

• Go aggressive in Marketing

• Source resources economically

–

Raw Material – Equipment

– Finance

– Manpower



SOLUTIONS



From Print to Solutions

• From Pre-press services to complete solutions

– India is fast becoming a hub for the outsourcing of publishing and printing services.

– In the case of BPO services in publishing, analysts believe

the value of the industry will be $1.2 billion (€0.88 billion)in 2012.

– Currently, India has a share of 60 percent of globalpublishing outsourcing.

–

The main areas of work are colour management, imageediting, traditional typesetting services, and page layouts.

• Opportunity to migrate to offering complete solutions



End-to-end publishing services solutions –

Domestic & Export Opportunity

• Content solutions

– Content Digitization

– Content Conversion

– Content Management

– E-books

• Pre press – CTP & CTF systems

• Print solutions

– Print on demand and Short run printing

– Web offset / Sheet fed printing

–

Post Press• Fulfillment solutions

– Packing & Warehousing

– Third party logistics, Online tracking

– Web Store Front



SCALE



Scale

• India lacks capacity and scalability.

• All the Indian book print firms put together are smaller in terms of

capacity than say, two print book firm in China.

– Leo Paper Group – which has 26,000 workers in a single factory

complex; – The South China Printing Company – which has 5,000 workers, and

– The Hung –Hing press – which has 12,000 workers, etc.

• Most of these book print firms work with the largest international

publishers that include Cambridge, Harper Collins, Hatchette,

McGraw-Hill, Macmillan, Longman, Pearson, Evans, Orient

Blackswan, Oxford, Macmillan etc.



China vs. India – Book Exports

• The Chinese firms have

achieved scale.

• In addition, the Chinese

government provides

exceptional support andfinancial subsidies for

book exports.

• Also the logistics and

shipping infrastructuresignificantly shorten the

logistics lead times and

reduce costs.

(US $ Millions)

Country China India

USA $725.78 $24.41

Australia $58.89 $2.06

Canada $33.61 $2.81

Mexico $14.17 $0.44

Singapore $8.33 $2.47

South Africa $7.60 $2.92

Saudi Arabia $7.35 $2.53

Thailand $7.12 $0.33

Nigeria $6.79 $24.56

Iran $5.90 $1.34

Chile $4.77 $1.04

New Zealand $4.28 $0.55

Iraq $2.57 $1.01

israel $2.42 $0.24

Argentina $2.23 $0.11

Bangladesh $1.75 $1.68

Kenya $1.33 $5.39

Ghana $1.27 $8.87

Uganda $1.17 $1.75

Ethiopia $0.87 $5.81

United Rep of Tanzani $0.78 $3.41

Papua New Guinea $0.65 $0.55

Sri Lanka $0.42 $9.20

Nepal $0.23 $4.99

Mozambique $0.12 $4.87

New Caledonia $0.01 $0.08Total $900.41 $113.42

Book Print Exports 2009: India Vs China



U.S. Print Case Study



The Top League - Global



Scale

• Today Indian printers are working with the global publishers, but

the numbers woefully miniscule even though each of these

publishers have print budgets in the range of $ 100 millions.

• In a highly fragmented industry, key book print firms have emerged

and consolidated their presence. – These are: Gopsons, International Print O Pac, Kala Jyothi, Lovely

Offset, Manipal Technologies, Multivista Global, Navneet Publications,

Replika, Repro, Srinivas Fine Arts, Thomson Press, etc.

• These firms are providing print services which cater to the books

segment and can form the foundation of making India the largestexporter of books.



Obstacles for Indian book print firms

• The reasons Indian book print firms lag behindare:

– Fragmented nature of the industry resulting in lowscale which restricts companies from investing inautomation, state-of-the-art equipment andmarketing

– Unbalanced trade laws – benefits for exports are notmuch, whereas books can be imported free of duties

– Infrastructural issues – roads, ports, shipping lines etc

– Lack of marketing initiatives etc

– Lack of co-ordination among the key stake-holders



WAY FORWARD



The Book City – A Billion Dollar Opportunity

• China printed over seven billion books in 2010; and

there were about 3,30,000 titles, close to 60% being

new titles. The export of books, printed in China,

grew by 9% to $323 million in 2010. ...• What is India's targets for 2017?

• The Book City presents an opportunity to India to

achieve billion dollars worth of exports by 2017.



Book City – The Vision

• A Book City is envisioned as a place with publishers,

printers, content companies, paper mills / suppliers,

equipment suppliers, artists' studio spaces,

innovation labs for material experimentation,technologists, educational & vocational institutes,

booksellers, wholesalers, logistics --- the whole

gamut.



Book City – A partnership approach

In order to make the “Content and Book City” concept a reality, we are

looking at a partnership approach for various aspects of the city• State Government

– To provide land

– Utilities like electricity, water,broadband etc.

– Access to port and otherlogistics facilities

– Access to good quality trainedmanpower for the content andmanufacturing establishments

– Tax incentives in order toattract entrepreneurs to invest

in Book City• Infrastructure Company

– To invest and create the rightinfrastructure for the Book City

– To get necessary approvals forsetting up the project including

SEZ permissions

• Entrepreneurs, Franchisees,print companies

– Product-specific productionunits run by entrepreneurs

•

Financial Partners – Source of funding for the

entrepreneurs

• Strategic Alliances /Partnerships

–

With paper mills and other rawmaterial suppliers (Indian andinternational)

– Machinery Manufacturers

– IT - Automation & Control

– Specialised and dedicated

facilities for key clients



Benefits to the State

• Book City is envisaged as a print services eco-system,which will bring development and employment in thearea where it is set up.

• In addition to direct employment generated by the

content and Book City, there will be a need for a lot of ancillary services like financial services from banks andother financial institutions, equipment manufacturers /sellers, construction services, placement agencies etc.

• Thus, the eco-system will bring in all-rounddevelopment in the region, in addition to generatingexport revenues for the state and the country.



Benefits to the Publishers

• Indian book print firms can become a one-stop solution forthe publisher: right from managing the content toproduction to fulfillment.

• With this, the publishers are free to focus on their mainbusiness, which is getting additional titles, interacting withthe authors and the last mile: getting it to the customerthrough marketing and distribution.

• A world-wide strategic alliance with the publishers wouldfree them of the production and stocking hassles.

•

Plus publishers need not worry about the quality asspecialised firms will have the expertise and the latestmachines for printing as well as post-press processes.That’s the essence of the Book City



The Book City – A roadmap• To address the projected demand for printing services,

we've conceptualised a “Content and Book City” plan,which is – An eco-system for setting up the content management and

print services.

• Under this concept, a core Group comprising of selecttop book print firms and a partner in the infrastructurespace) will approach progressive State Governments toinvite them to participate in the project

• The infrastructure partner will build the infrastructure

and – Invite content, print and related media companies /

entrepreneurs to offer services and products – beingtenants both in a central SEZ and a domestic tariff zone.



The Book City – A roadmap

• The core group of top book print firms, throughits relationships with global publishers, will bringin business from around the globe and – The partner units will be executing the same, in

addition to the business that they source on theirown.

• The endeavour here is to transform the printingindustry in the country from an unorganised,

fragmented “industry” to a well-directed, incomeand profit generating industry with a well-chartedfuture capable of handling global requirements.



Distributed Expansion

•

The Book City will become the hub and in the second stageestablish print clusters across different regions of thecountry

• These print clusters will operate as outsourcing hubs for theprint city

•Investments in IT and content infrastructure will not haveto be replicated in the clusters as these will be shared fromthe Book City

• This will enable the publishers to be served across thecountry in a short period of time thereby bringing the

printers closer to the customers• With a concerted effort through the Book City and Clusters

coupled with the normal growth of the Print Industry, canIndia target to reach 5 Billion Dollars of Exports from thePublishing Services Industry?



Distributed Printing Set-Up



Book City and Print-Clusters:

Value Added Print Solutions to Publishers

• Offer total solutions for managing and distributingcontent in print (Offset & Digital)

• Integrated content, design, production and fulfillmentprocesses

• Extensive use of the Internet & Technology tocomplement customer programs

• Pan-India Coverage through regional partnerships forreproduction and fulfillment

• Partnering with entrepreneurs and other printcompanies to offer a pan-India reach to publishers todeliver books in the shortest possible time



Next Steps...

• Set up core team of printers

• Identify Infrastructure parters

• Distribute White paper to Central and State

Governments• Invite print companies / Entrepreneurs to guage

interest

• Presentations to state governments foridentifying location of Book City

• Implement....



THANK YOU

[email protected]

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