Today, the size of the printing industry is almost a trillion dollar. Our best guess is that worldwide only three per cent or less is printed digital. If we can print 10 per cent of this digitally, then we are talking of $100-billion industry. This is a huge industry and this is the reason why everybody is clamouring for this.
It’s homecoming again for Venkat Purushotham, President and CEO, NexPress Solutions LLC, a wholly-owned subsidiary of Kodak. NexPress is starting its operations in India by mid-2005. Purushotham was in the Capital recently to make the announcement. In 2004, NexPress became a wholly-owned subsidiary of Kodak, boasting a product line of award winning colour and black & white digital printers and solutions. As the President and CEO of NexPress Solutions, he is responsible for expanding the business with sales and services spread across 20 countries.
Purushotham started his career as a young entrepreneur in the printing industry. Between 1970 and 1976, he established three small businesses providing printing and pre-press services. He holds various degrees from India, England and the USA, including an MS Degree in Imaging Science from the Rochester Institute of Technology.
Purushotham joined Kodak in 1981 as a Research Scientist at the Kodak Research Laboratories. In 1988, he became Program Manager in Kodak Graphics Imaging Systems Division, in-charge of development and global marketing of a vast array of pre-press products and systems. He was appointed General Manager of Digital Publishing Solutions for graphics markets in 1991. He became GM, Digital and Hybrid Imaging Business for graphic markets in 1994. In this function he was responsible for developing and implementing Kodak thermal imaging solutions for computers to film, proof and plates applications.
In 1998 Purushottam was appointed President of NexPress Solutions, a joint venture company formed by Eastman Kodak Company and Heidelberger Druckmaschinen AG, the world’s largest printing solutions provider. NexPress was formed in order to develop and market new solutions for digital production colour printing. Purushotham speaks to Malini Menon of exchange4media on NexPress Solutions’s roadmap for the Indian market. Excerpts:
Q. What is the total size of the print industry and digital printing?
Today, the size of the printing industry is almost a trillion dollar. Our best guess is that worldwide only three per cent or less is printed digital. If we can print 10 per cent of this digitally, then we are talking of $100 billion industry. This is a huge industry and this is the reason why everybody is clamoring for this.
Q. Xerox has already penetrated the Indian market with its 2400 dpi printers. What would be your counter strategy?
The printing industry is one of the largest industries in the world. In fact, it is one of the top five industries in the world. There are trillions of pages being printed. Moreover, we have been in the business a lot longer than Xerox has. Xerox is famous for copiers and printers and this business is becoming extremely competitive. There are so many printer manufacturers and copiers in Asia, and they all are competing heavily with Xerox. Xerox too is competing from a copier company to a commercial printing company. 2400 dpi does not really mean anything. They are just marketing gimmicks.
Moreover, there is a lot more in imaging science than the number of pixels in an inch. The issue really here is that how can Xerox, Kodak and Canon collectively make the printing industry more efficient. The printing industry is very labour intensive and a lot of what we print, we do not use. So, if a company understands the customer better, then we can target them better. For example, better targeting of customers in India could just mean printing the same content in different languages. This means the number of copies that you print goes down dramatically. So, instead of printing 10,000 pages of content in one language, you can print 1,000 each in different languages like Bengali, Kannada, Telugu, Tamil, etc. You have to do this without compromising on colour quality. You cannot do this on offset because it is extremely expensive.
One must remember that you can do high quality printing through digital technology. And digital can print on demand.
Q. Are you planning to start a toll free number for NexPress Solutions in India?
Yes, we will be establishing all that. See our plan in India was to introduce the product sometime in the middle of the year but then we learnt about the trade show in New Delhi and we didn’t want to miss the opportunity. We will basically be a division of Kodak India Limited, establishing ourselves in Delhi, Mumbai, Bangalore and Chennai. Our sales and service people will be on these places and the toll free number will be in place in a month or so.
Q. Do you have collaboration with Etronix?
We have collaboration with a number of software vendors. Etronix is one of them. We have partnerships with Adobe and EFI, and a strategic alliance with Canon. Our strategy is to work with a number of independent software vendors and we are also looking at partnering with a lot of Indian companies in this regard. We believe that a lot of local companies understand the local needs far better than us. They can do many things far more efficiently than us, which is the reason why we partner with them. We are looking for companies in India that have focus on network management, database management and content management, etc. There are companies that have this focus on corporate context but we are looking for somebody in the printing and publishing context. If we find suitable companies in India, then we will certainly be partnering with them.
Q. How are you going to promote the brand?
NexPress will be more of a sub-brand and Kodak will be the main brand. It has just been nine months since Kodak has acquired it and the company is planning to acquire more. So the effort is to integrate them tightly and project Kodak as a brand. Kodak is also transforming itself from photographic to digital, from a capture company (Kodak moment) to an output company, and also changing from analogue to digital. So, Kodak is in the process of repositioning itself and we are leveraging that.
The fact that NexPress is not very known here is crucial because the success of digital printing in the long run does not rely on just marketing to the print service provider. We need to go out to the print buyer. Unlike in traditional printing, we have to go to Coca Cola, Mercedes Benz, American Express and major Indian companies like Reliance to educate them about how they can best deploy this technology. So we have a lot of work in that area and we are trying to figure out which is the best strategy that would click.
Q. What is your differential advantage?
The fundamental differentiation that we are providing is that of reliability and robustness. The advantage we have is of course our joint venture with Eastman Kodak and Heidelberger, which is world-renowned for reliable printing processes. Heidelberger is more than a 150-year-old company and Kodak is more than 125 years old. From the design architecture perspective, we are the most reliable press because you can keep our machine running for days together without it breaking down. We are by far the best because of the way we approached the design.
The second thing is of course the quality and consistency that we deliver. Our objective is not just to provide good quality but also to maintain that quality. Thirdly, we have designed our product such that you can use the widest range of paper. So, one does require specialised paper for our digital machines.
And last but not the least is our business model. On the colour side we do not have any click charges. We don’t have a fixed charge for every page that the customer prints. We have a programme by which we give the consumers maximum discount. If the consumer enables us to link the system to the Internet so that we can monitor the process, then we can ensure that the customer will get the maximum product utility. Hence, our business model is to let the customer manage the press to the maximum efficiency and keep the operating cost down as opposed to a click charge. The problem with the click charge is that every page you print, you pay the same price.
Q. Do you have any plan of setting up manufacturing operations in India?
As of now we have no such plan due to lack of economies of scale. Our manufacturing is predominantly of assembling. We get components from around the globe. Essentially we outsource most of the component manufacturing, sub-system manufacturing and licences to other companies who are capable. There is no point in building our own vertically integrated manufacturing operations. Our suppliers would also be suppliers to Xerox, Canon, NexPress and so on. They are specialised and so it helps drive the cost down. What we do is to bring the sub-systems and do the assembly, load the software and do all the checkouts. Most of the systems are based on our own patterns and the designs are exclusively our own.
Q. What is the reason for NexPress Solutions coming to India?
The reason why we are in India is because India is one of the largest countries and although only a third of Indians have the buying power, yet there is a huge potential. India is a very high technology-oriented and English-speaking country. The fact that Indian economy is growing twice the rate of the rest of the world, along with China, it has the potential to grow in the next decade. So, we wanted to be here and grow with India.
Q. What is the target that you have set for yourself?
Three years from now we would like to capture at least 30 to 35 per cent of the market share in the space we operate. Our major competitors are Xerox and Hewlett Packard. We also see a lot of companies from Japan entering this space. However, we are confident that we will easily reach the target. With Kodak buying Versamark and Polychrome graphics, in a few months it would be integrated into a single, unified product brand and unified product communications company.