Getting Down to Developing New Business in India’s Print Technology Market

India's Economy at a Glance India's Economy at a Glance -- 20072007

GDP 9.4 percentPopulation 1.1 billion

Literacy 64.84 percent

Foreign Exchange Reserves US$ 200.67 billion (end-May’07)

Exports: (April’06-March’07, Prov.) US$ 124,629.48 million

Imports: (April’06-March’07, Prov.) US$ 181,368.26 million

Cumulative FDI Inflows: US$ 54,628 million

• Print industry growth outpaces GDP growth since 1989.

• Printing and Packaging Industry compound annual growth over 14%.

• More than 150,000 printing presses in operation

• Capital investment of over $2 billion

• Employs directly / indirectly over 1.5 million people.

*****“The Indian Print Industry with a turnover of $ 6 billion is poised to turn global”.- Ole S Rasmussen, MD, Heidelberg India Pvt. Ltd.

Indian Printing Industry OverviewIndian Printing Industry Overview

Indian Packaging Industry ScenarioIndian Packaging Industry Scenario

• The Indian Packaging Industry worth $2 billion.

• Indian packaging output grew by around 18% in 2003. Today, most basic raw materials required for packaging Industry i.e. Paper,Board, Plastic, Glass, Metal etc. are easily available.

• Growth rate varies - 5% in some sectors to 20% in sectors like Flexible Packaging (Developed Countries average : 3%)

• Over 40% of Export by Small / Medium Sector where Packaging Industry has major presence.

Indian Newspaper IndustryIndian Newspaper Industry

• India has the largest number of daily newspapers in the world with over 1,795 publications

• More than 150 million people read a newspaper every day.

• Newspaper circulation has increased by 33% from 2001 to 2005 – (59.1 million to 78.6 million)

Print MediaPrint Media

Current size: US$ 3.2 billionProjected size by 2011: US$ 5.8 billion

Compound Annual Growth Rate (CAGR): 13%

Drive Factors :• Booming Indian economy

• Government initiatives opening the sector to foreign investment

• More people- rural & urban areas-reading newspapers/magazines today.

Currents Estimates : • Print Media-reach in India has increased to 222 million people

• Vast potential to grow market still larger; 369 million literate people in India still not tapped by any publication

Source: Ficci-Pwc Report

Opportunities : Foreign Direct InvestmentOpportunities : Foreign Direct Investment

• 100 percent FDI is now allowed in print media segment for non-news publications

• 26 percent FDI is allowed for news publications.

• Printing of facsimile editions of foreign journals also allowed - helps foreign journals save on the cost of distribution while servicing Indian market audiences more effectively.

Source: Ficci-PwC

CustomCustom DutiesDuties

Year 2004-05 2005-06 2006-07 2007-08Basic

Custom Duty 20% 15% 12.5% 7.5%

Basic Duty of Customs (%) 7.5

Additional Duty of Customs(CVD) (Including Cess, if any) (%)

16

Central Excise Education Cess (%)

3

Customs Education Cess (if any) (%)

3

Special Additional Duty of Customs(Spl.CVD) (if any) (%)

4

Custom Duty (2007 – 2008)

CustomCustom DutiesDuties

• Basic Customs duty on several specified items of Printing Machinery and Equipment, as also spare parts reduced from 12.5% to 7.5% in January 2007 itself.

• Maximum import duty with additional levies, including education-cess, from 31.01% to 35. 6% for sheet-fed and other printing presses.

• For newspaper rotary printing presses double width with speed of 70,000 or more copies per hour, the basic duty 5% remains unchanged.

• The total impact of duties amount to 18%, 5% for newsprint and 21% for digital presses.

Printing Machinery Imports RisingPrinting Machinery Imports Rising

40.06 33.5938.56

88.58

129.75

0

20

40

60

80

100

120

140

US $

Mill

ion

2001-02 2002-03 2003-04 2004-05 2005-06

Year

Printing Machinery: Total Imports

Commodity 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006OFFSET PRINTING MACHINERY-

REEL FED12.81 9.08 4.6 12.41 72.38

OFFSET PRINTING MACHINERY-SHEET FED,

1.01 0.62 3.31 12.14 5.65

FLEXOGRAPHIC PRINTING MACHINERY

0.42 1.02 4.32 4.68 3.81

GRAVURE PRINTING MACHINERY

4.44 2.94 3.69 7.63 2.8

OTHER OFFSET PRINTING MACHINERY

21.92 19.93 22.64 51.72 45.11

TOTAL IMPORTS 40.6 33.59 38.56 88.58 129.75

Source : Ministry of Commerce (Export Import Data Bank)

Values in US$ Million

Recent Installations by Goss InternationalRecent Installations by Goss International

• Thomson Press, one of the largest commercial printers in South Asia, has invested in a Goss M-600 D press for high speed and quality at its Navi Mumbai site- the first ‘D’ model M-600 press installed in India.

• Deccan Chronicle, Bangalore, has ordered ten new Goss® presses: to keep up with growing demand for color advertising and high sales of its newspaper titles in Southern India.

SheetfedSheetfed BoomBoom

• India will witness as many as 300 brand new sheetfed units installations in 2007-2008 and 400 units in 2008-2009. This excludes imports of second machines.

• Imports of printing machinery more than doubled, from $41 million to $84 million during 2001 -2005.

Digital Printing in IndiaDigital Printing in India

• The Indian digital printing industry is projected to grow to $17 billion by 2010.*

• In India digital print market share estimated to more than triple – from 3% in 2005 to 9% in 2010. *

• While global market share may be smaller India’s rapid growth rate makes India the digital market for the future.

Source : * Pira International, Xerox

Xerox India Xerox India -- A Success StoryA Success Story

• Xerox business has grown ahead of overall digital print business. Its partnership approach of educating the market is paying off - in the last 3 years it has a CAGR of 50% in units and 30% in revenues.

• Xerox assesses an explosion in the size of the digital print industry next 3-5 years and expects stronger growth and a tripling of revenues from digital over the next few years.

• “India is the home to the "Global Printer of the Year" award winner, and I am certain that India's printers will accelerate their adoption of digital technology, which is why I am so optimistic about the future.”

- Andrew Horne, MD, Xerox India Ltd.

Baldwin India Baldwin India –– A Success StoryA Success Story

• Baldwin Technology Co. Inc. majority stake-holder in JV with TejBandhu Group, launched Baldwin India Pvt. Ltd. late-2000.

• Today, Baldwin India’s plant in Gurgaon manufactures fountain solution, temperature control & mixing systems and looks after marketing, sales and services of the Baldwin range of products enhancing quality, productivity and cost efficiency of the printmanufacturing press.

• “Over the past 6 years Baldwin India has become the identifiable leader in press accessories and controls working with most majorOEM customers and end-users in India.”

- Samir Bandhu Gupta, GM, Baldwin India Pvt. Ltd.

NPES IndiaNPES India

• Facilitate NPES members to develop contacts

• Assist in organizing one-to-one meetings for visiting NPES members.

• Promote Graph Expo and PRINT events

• Entertain enquires from visitors

• Distribute literature from NPES members

• Provide visitors information on NPES members’ interests

NPES India regularly participates in major trade shows in India where we :

Indian Printing Packaging and Allied Machinery Manufacturers Association(IPAMA) with 240 members is recognized, by the Government of India, as the national level organization representing India’s Graphic Arts Industry.

All India Federation of Master Printers (AIFMP) with over 50 affiliate associations of printers all over the country is the Print Industry’s apex body. AIFMP is primarily engaged in the overall development of the printing industry in the country. Viren Chhabra is the Founder-Editor of AIFMP’sofficial journal: Printing Times

IPAMA & AIFMP will have booths at the GRAPH EXPO 2007

Here they can :• Exhibit product literature,• Access space to hold meetings with prospective agents,• Work the floor to size up the market/players, • Receive advice / assistance to understand the market.

at

NPES offers a special $500 exhibitor participation fee which will enable NPES members to share the NPES stall and services at IPEX South Asia

NPES India WebsiteNPES India WebsiteContents & links:• NPES News, Other News, Market Trends

Technology & Products, Policy & Regulations

• Events: National & International• NPES Members’ Directory and Product

Locator• NPES Newsletter• NPES India Newsletter• List of Printers Associations: National &

International• List of Trade Magazines• Indian Printers & Suppliers database,

region-wise, linked to website.• Knowledge Bank• NPES Events Promotion (Graph Expo &

Converting Expo 2007 Banner)• NPES members’ products advertisement

banners for Promotion.

Other Useful Links:• Printing Institutes in India• Printing Institutes Abroad• Research and Education Institutions• Guide for Business Visitors to India

www.npes.inwww.npes.in

Viren ChhabraSenior Director

NPES

PHD House, 4th Floor, Siri Institutional Area August Kranti Marg, New Delhi 110016, India

Tel: +91 11 4165 4714, Fax: +91 11 4165 4713Email: vchhabra@npes.inWebsite: www.npes.in