Hindustan Enters U.S. Market with Micro Inks

By David Savastano, Ink World Editor | 09.06.05

New Illinois-based subsidiary plans to sell full line of products.

For more than 50 years, the Indian printing ink industry was dominated by Coates. That changed when the Bilakhia family founded Hindustan Inks & Resins Ltd. (HIRL), which opened its doors in 1986. Within 13 years, HIRL became the top ink producer in India and number 16 in the world.

Now, HIRL is looking to branch out into the global market. Its first stop will be the U.S., with the introduction of Micro Inks Corporation, a 100 percent subsidiary of HIRL. Micro Inks has opened a manufacturing plant in Kankakee, IL, and has brought in top talent from a number of U.S. companies, including new president and chief executive officer Frank Moravec to direct and run its operations.

Micro Inks’ stated goal is to attain a significant position in the global marketplace starting with North America. To do so, the company will be selling a full line of inks, beginning with heatset, news, sheetfed, UV/EB and publication gravure in the first phase.

“We would also participate in customers’ programs to help them reduce waste and machine downtime to improve their efficiencies,” Mr. Moravec said. “Basically our objective is to raise the bar of performance and offer a much better value on a price/ quality matrix.”

Due to the size of the U.S. printing market and the consolidation that has taken place in the past few years, the Bilakhias selected the U.S. market as the place to begin its new operations.

“Coming to the U.S. is not an accident,” said N. Coumara Radja, vice president, corporate affairs, who has come over from India to help build the new company. “So many countries were examined closely over the past two years, however we selected the U.S. because the opportunity level is so high due to the sheer size of the market and what is happening in the industry.”

Once the U.S. was selected as the base for the company’s new facilities, hiring leadership was the next step. The Bilakhias invited Mr. Moravec, former INX International president and a 38-year veteran of the printing ink industry, to India to visit the company’s facilities.

“I was astounded by the aesthetics and magnitude of Hindustan Inks’ manufacturing facilities,” Mr. Moravec said. “They literally have industrial complexes. Along with manufacturing horsepower, they possess technological proficiency and have a strong financial position to support global expansion. I saw style and substance combined.”

“It was an honor for us that Frank came over and felt our facilities were the most impressive he had ever seen,” Mr. Radja said.

Mr. Moravec stressed that “you must have a full line of products, including publication gravure, in order to compete in the large customer arena. Micro Inks is willing to step up to the plate to attain a significant position with major customers to assure long-term success.”

After bringing Mr. Moravec aboard, finding a manufacturing location and hiring the rest of the key people became the next task. Picking out the 44 acre Kankakee, IL site was an important step. In September, Micro Inks began trial production of heatset and news inks in its 268,000 square foot printing ink plant.

Mr. Moravec said that time was of the essence, and added, “We would have built a new ink manufacturing facility if time would have allowed. However, in order to capitalize on imminent business opportunities we had to emerge and enter the market rapidly. We had to show the customer base that we were tangible today by becoming operational immediately.”

As for hiring key employees, Mr. Moravec said that adding Mr. Radja from the parent company was a critical first step. “I’m grateful to have Coumara Radja with me,” Mr. Moravec remarked. “He provides synergy, and he’s helped me tremendously to understand the unique work culture of the Bilakhia group based on openness, empowerment and aggression.

“Our strategy is to get a good cross-section of the best,” Mr. Moravec noted. “We’re getting people from ink companies, printing companies and chemical companies. Our technical director, Debu Sengupta, came directly from Hindustan Inks and Resins Ltd., and was the vice president of technology reporting directly to the Bilakhia Group. Hindustan Inks sent me the best technical person in their company to be on my staff.

“Other key hires were Ron Douglass, formerly with 3M Company and The Ink Company, who is now our vice president of sales and marketing, and Ramesh Mulani, formerly with Lawter International, Inc, who is now our director of operations,” Mr. Moravec said.

“We have attracted the best talent from different parts of the country,” Mr. Radja added.

Mr. Moravec would not rule out acquiring smaller ink manufacturers; however, he said, “At the present time, we do not want any cultural clashes to impair our vision. We are hand-picking our team and want to remain lean and agile.”

The Parent Company
Hindustan Inks & Resins Ltd.’s growth has been a major success story. The Bilakhia Group is led by three brothers: Yunus Bilakhia, the founder and chairman; Anjum Bilakhia, managing director; and Zakir Bilakhia, director of technology. It is a first generation business, which started with five people in 1986; today, it has more than 2,200 employees.

Ever since making an IPO in 1992, HIRL has grown in sales and profits by more than 50 percent compounded every year, thereby achieving leadership in India. In the last eight years the market capitalization of Hindustan Inks has gone up by nearly 124 times, substantially rewarding the shareholders. Mitsu, its agrochemicals operation, began in 1993, and quickly became number one in its chosen markets, particularly pesticides for crop protection and public health.

The Bilakhias are a closely-knit family, and Mr. Moravec and Mr. Radja said it is a pleasure working with them.

“They have ultimate trust in our leadership at Micro Inks and allow us to run the company exclusively,” Mr. Moravec said. “They possess brilliant business acumen and are very proud of their achievements, however, without arrogance, and are compassionate humanitarians that share their success with others.”

A critical element in HIRL’s and Micro Inks’ plan is that the parent company will provide raw materials for its subsidiary.

One of the ways that Micro Inks will benefit is through the full integration of the parent company.

Micro Inks will use Hindustan Inks as its main supplier. Mr. Moravec said, “HIRL is totally integrated in pigment, resin and additives. We are the only ink company in the world basic in resin technology. This undoubtedly makes us the lowest cost producers of inks and their ingredients in the world. In addition, we are one of only four companies worldwide that manufactures alkali blue.”

“We felt that without manufacturing resins and pigments, we could not be a significant force in the industry,” Mr. Radja said.

“India has competence in chemistry,” Mr. Radja noted. “It is an emerging country, leading in the development of the most complicated chemistry such as agrochemicals and pharmaceuticals. By manufacturing alkali blue, we are making a statement that we have competence to manufacture any pigment.”

“Our strategy is very clear,” Mr. Radja said ‘Mr. Yunus Bilakhia’s philosophy is that we have to be in a number one, two or three position in any business we choose and maintain cost leadership in each product we manufacture.”

To sum it up, Mr. Moravec said, “Micro Inks has the tenacity, conviction and resources to realize its vision to become a global power in the printing ink industry.”