The growth of one of the biggest labelstock manufacturers in India
Ajay Mehta, Managing Director and founder of SMI Coated Products
Evolving from a business doing lamination jobs for sheet-fed offset printers founded in 1961, SMI Coated Products Pvt Ltd developed into one of India’s leading labelstock manufacturing companies. Harveer Sahni talked to the company owner about the reasons for this strategic realignment, referring to some particular conditions of the Indian label market.
In 1956, Om Prakash Mehta started his own trading business at Kolkata by importing cosmetics and watches but due to cumbersome and restrictive licensing procedures prevailing at that time, he left that business. In 1960 he started to make 3D photos that were quite a novelty in those days and also made gift items.
A year later he saw potential in the print lamination business as glossy posters and catalogues became a very important selling tool. Therefore he started doing lamination jobs for sheet-fed offset printers. Due to terrorist activities of the left-wing Naxalites in the latter half of the 1960s and the resulting unstable local situation, he decided to relocate in Mumbai (known as Bombay in those days).
Once in Mumbai, Om Prakash Mehta started his enterprise SM Plastic Industries at rented premises in Nargis Compound, JB Nagar, Andheri, continuing the same print lamination business that he was doing in Kolkata. Initially it was a very difficult time and one of the first deals he remembers is that when he got a very big lead through Ajanta Printarts. They asked him to approach their biggest competitor and tell them Ajanta’s lamination job was done by SM Plastic Industries, the gimmick worked! He got the order and was soon doing jobs for printers across the nation. The customer base grew and in 1977 he bought his own premises in Shiv Shakti Industrial Estate and moved his operations there in 1982. In the following three to four years the sheet lamination business started to become localized and bigger printers preferred to do the jobs in-house.
Leaving the print lamination business in the hands of loyal workers, who till this day run the business with support from his son Ajay Mehta, who did his initial schooling at St. Lawrence School Kolkata and later at St. Teresa High School, Bandra, Mumbai. He then completed his B.Sc (Chemistry) from Mithibai College, Mumbai. In 1983 Ajay Mehta completed his studies and joined his fathers’ business.
Om Prakash moved on to establish another enterprise in 1987 doing fabric to fabric lamination like silk to flannel or cotton to cotton for shoe uppers using EVA for bonding. He developed triple fabric laminates for shoes, bags and accessories. Ajay comment “The laminates were very good and gave long life to the products they were used in. As a result of this in just one and a half year we were without any orders”. Therefore, in 1991/92 he decided to quit the fabric lamination business.
Setting up labelstock manufacturing
In 1993 he setup labelstock manufacturing facility SM Industries at Daman with the help of a 20” width coater laminator running at just 15 m/min (49.21 fpm). The location was chosen because Mumbai was too expensive and moreover there were tax incentives available at Daman. It was difficult to run that unit initially because road conditions were bad. When the thought came to Ajay to also become involved in printing, his father would not allow forward integration because he envisioned that they would not compete with their customers. They initially made only sheeted materials and a lot of hard work went into making the unit a success.
In 1996/97, Ajay noticed that there was more opportunities in roll form products and spent two years perfecting quality, tension control, slitting, etc. They acquired a 1016 mm (40”) width coater in 1998/99 and started to offer labelstocks in roll form. A year later they acquired a 20” used hotmelt adhesive coater laminator which they replaced with a new 508 mm (40”) machine in 2004. In 2008 they moved to larger premises in Ambernath, near Mumbai and SMI, as they are now known, started their own siliconising operations. Currently, the company has three coaters, two one meter width coaters (39.4”) for emulsion adhesive coating and one coater also of one meter width for hotmelt adhesive coating. They have a workforce of 170 persons and have sold their products in 22 countries. Getting into exports was exciting but successful, as 50% of their sales now come from exports. Looking back, Ajay attributes his success initially to his father’s efforts and the support from his wife Swati, but now the success is due to the team created at SMI.
Current portfolio and manufacturing equipment
SMI now produces a wide range of label stocks, customized to end users exacting demands. They offer over 200 different products with a choice of emulsion acrylic or hotmelt adhesives in permanent, peelable, semi-freeze, deep freeze and low migration variants. Face materials employed are PE, PP and PET in the filmic range. The range of self-adhesive materials offered with papers as face materials include semi-gloss, Vellum, thermal transfer paper, direct thermal papers (both Eco and Top), metallised papers, fluorescent papers, cast-coated papers, Aluminum foil laminated papers, wet strength papers, baggage tag materials etc. Majority of their raw materials are sourced from leading international suppliers yet the filmic release liners are manufactured in-house. The manufacturing equipment employed at SMI are all custom-built to the company’s specification by leading Indian machine manufacturers. The close cooperation with them has led to SMI having a world class facility fully equipped to supply consistent quality. Ajay being a stickler for quality has invested in a lot of the testing equipment that have been sourced from Chemsultants USA.
Awards and outlook
SMI has in recent times grown in stature and has won the prestigious entrepreneurship award for exports from the Government of Maharashtra for three years in a row, they were awarded for being one of the top 100 SMEs at national level, selected from about 63,800 contestants and they were also awarded being one of the Bank Of India SME small giants, selected from amongst 16,000 contestants. They have also been commended by PICA Australia for being the supplier to award winning printers. Ajay aspires that his company would continue to upgrade in quality and continue to attain global recognition. As a responsible industrialist he feels that the environment also needs to be considered and protected. Therefore he is not averse to make investments in waste management reiterating.
Ajay does worry about the depleting margins in the labelstock and for that matter in the labels industry. However, economies of scale and better manufacturing practices have kept SMI growing at a steady pace. Ajay Mehta is sure, if his company keeps growing at the present rate, it will be twice its size in five years. He asserts that he has never seen threats as a deterrent; in fact he learned from them and remained focused on his products and their growth.