Linc Pen scripting sustainable future in digital age

With schools, colleges and other educational institutions gradually re-opening, Kolkata-headquartered Linc Pen & Plastics Ltd (which is in the process of rechristening itself as Linc Pen) is hoping to reach pre-Covid level by the end of the current fiscal and move up further from there. The four-and-a-half-decades old company, which makes one of the top three writing instrument brands in India, is also gearing up to tap new price segments and new geographies outside India through innovation. Speaking to Buzz Buzz, Deepak Jalan, Managing Director, Linc Pen, tries to read the writings on the wall and shares his thoughts on how he plans to take this home-grown brand to the next level

What is the current overall market size of the writing instrument industry in India and what are the shares of organised and unorganised sector in that market?

The overall market size of the writing instrument industry in India, at this point in time, is estimated to be nearly Rs4,000 crore. Of this overall market, 70 per cent would be organised and the remaining 30 per cent would be unorganised sector's contribution.

At what rate the industry is growing? And what would be Linc Pen's growth rate?

The overall writing instrument industry is growing at 6-8 per cent. And Linc Pen is growing at more or less the same rate.

What is Linc Pen's current market share?

Our current market share is 8-10 per cent.

How did the Covid pandemic impact your business? How are things now?

The Covid pandemic and prolonged lockdowns did hit us hard. With school and college students being our core target groups, we were impacted very badly. All the institutes remained closed for long and our consumption went down drastically as students were pursuing online classes for this entire period. In 2020-21, we notched up 65 per cent of our normal revenues. The first two months of the 2021-22 were also bad. We were at 75 per cent of our pre-Covid level. Things have started looking up. And we hope to be at close to pre-Covid level by the end of the current fiscal.

Does the digitization spree pose any serious challenge to the writing instrument industry? Do we need pens anymore?

I don't think so. People have been talking about this for more than ten years now. The growth rate for industry of pens and other writing instruments may have slowed down, but the market is still there. Pen is still needed and will be needed. No matter how much we digitalise, pen and paper will never go out of fashion. They will always be needed for writing notes of various kinds, signature purposes and others.

So what is your current capacity? Do you have any plans to ramp it up by way of putting up new plants?

We have two full-fledged manufacturing units. Our current overall capacity is to make 50mn pens/month. Besides our own manufacturing units, we also get job works done from several other units, with whom we have contractual agreements. Therefore if we have larger demands, we can always get them manufactured. If the market so demands and we think it fit, we can always think of putting up another plans and ramping up capacity at the existing ones.

At one point of time you had forayed into retailing by way of putting up own signature outlets like Just Linc, Linc Office and so on. What is the current status? Do you still nurture the same ambition?

Yes we had started this. But it did not take off the way we had originally envisaged it and then market situations and dynamics also changed. At present we have four company owned signature outlets in Kolkata. It's still too early to expand on this front through the franchise model. However, we are still open to the idea of adding few more company-owned outlets. Hopefully, within next 3-4 months, things will be clearer. We will also have a clearer picture to take a call on this.

Do you still deal with Mitsubishi Uni-ball, from the stable of Mitsubishi Pencil? If so, how much of your topline comes from that brand?

Yes we distribute Mitsubishi Uni-ball in India. As of now, as much as 15 per cent of our overall revenue comes from Mitsubishi UNi-ball.

Do you have any plans to bring in any premium range from your own stable?

No, not in near future.

Have you taken any move/initiative to make up for whatever de-growth the writing instrument industry has been experiencing?

As a de-risking option, we have started marketing and distributing office stationery products (calculators, desk organisers and other desk items etc), under the 'Deli' brand across the country. At present, it contributes around 5 per cent of the turnover. Adjacencies like sanitisers have also been launched recently. Earlier, we had rolled out a sterilising pen (touch-free device for surfaces like ATMs and lift buttons).

What about exports? Do you export your products also?

Yes, we export our products to as many as 40 countries, mostly in South East Asian and African countries in our own brand name. Currently, 20 per cent of our total turnover comes from exports. Going forward, we will explore and tap new geographies. And our focus will be on selling products under our own brand name.

What about fountain pens?

Fountain pen usage has become insignificant, almost negligible. It has become collectibles or collectors' item. Currently we don't deal in fountain pens.

What is the key challenge to stay competitive in the market?

One of the biggest challenges is to offer the best quality products at competitive prices. The market and consumers' perception is that Linc is a mass market brand despite making high quality products. We have to honour that perception.

In the past also you had laid thrust on innovation and came up with new and innovative products. What are you doing now?

Recently, we launched our brand, Pentonic, to give users a new feel of a pen. We launched this pen to attract professionals. We made it sleek and long, with a body black in colour in order to give it a different appearance from other pens. But we were surprised to see that besides our target segment, school students liked it a lot and demand for these pens grew. We have lined up plans to extend Pentonic's range to gel ink pens shortly.

Typically, India has seen a flourish of pens in the Rs5-7 price brackets. Margins on most of these are negligible and brands compete on volume. Linc, through Pentonic (priced at Rs 10 & upwards) is looking to shore up volumes and margins. We are targeting kiranas and mom-and-pop stores with a set of pens under Pentonic brand. The brand has been amongst the highest contributors in terms of value (and margins) to Linc's overall portfolio. One out of every three kiranas has shown interest in stocking Pentonic. The target is to add another 250,000 outlets by the end of this fiscal. This will help us recover some sales volumes.

We are now looking at Rs30 and above price segment and are gradually building up Pentonic as an aspirational brand. We will soon be rolling out Pentonic BRT and will position it as the smoothest pen in India.