QLM Label Makers is one of the few Australian print businesses to establish operations overseas. PKN associate editor Wayne Robinson visited managing director Simon Pugh at the new factory in Ho Chi Minh City to file this report.
The cool environs of Nepal contrast sharply with the sweltering heat of Ho Chi Minh City, but the ability to adapt to different situations has been one of the keys to QLM Label Maker’s managing director Simon Pugh’s life.
Pugh, following his passion for adventure, had spent two weeks trekking to Everest Base Camp and climbing Lobuche East, a 6150-metre mountain in the Himalayas, before returning to his Vietnam base, when PKN caught up with him.
The reason for the interview was the latest in what has seemed to be a non-stop expansion for the company he runs, a move into a massive new 6000 sqm factory for the Vietnamese arm of QLM the latest development, for what is now a multinational business.
The company was founded by his parents half a century ago underneath their Brisbane house, with Pugh himself starting in the business back in 1992. He was studying law at the time, but his father passed away suddenly, and the business was struggling, so at 24 years of age he stepped into the hot seat. After some initial early hiccups, it proved to be a smart move for the company. In the years since Pugh has become the driving force to transform QLM into the major force it is in labels today.
Vietnam is just one of a quartet of overseas operations for QLM, with Malaysia, Bangladesh and Cambodia all hosting QLM businesses. And they are in addition to a growing Australian company, which has seen Pugh take it from a Brisbane-based facility into a company with a national footprint, and one that is competing with the big two multi-nationals.
The Vietnam business is Hoang Ha Label and Packaging, which is the oldest privately owned label printing business in the country. QLM acquired it in 2012, with Pugh saying, “It was a question of being in the right place at the right time.”
QLM had been operating overseas since 2008, when it partnered with a Malaysian company, Pugh sensing the opportunity for growth outside Australia. That partnership lasted a couple of years before QLM struck out on its own, buying a Malaysian label business for itself, Pugh saying with refreshing honesty that, “I’m not sure QLM is good at partnerships.”
Acquiring any business means a cultural reset for staff and management, even when it is in the same town; acquiring one in a different country multiplies that necessity. Pugh says Hoang Ha in Ho Chi Minh City was a typical Vietnamese manufacturer, “dystopian” in some ways in regard to the way the business and the production operated, and hierarchical in its culture. He says, “I came in and swept much of that away. I placed my desk in the middle of the factory floor, rather than a remote office.” To say that was a shock to staff would be an understatement, but they quickly adapted, welcoming a CEO that wanted to understand their working lives, and place himself amongst them. Production was reorganised, generating immediate efficiencies.
He says, “I believe we are all stakeholders in the business – staff, management, customers, suppliers, owners – none more important than the other, all merely fulfilling different roles.” It is an unconventional approach, certainly for those cultures which can be rigid, but Pugh knows unconventional well, and is prepared to back himself. He says, “Growing up as a gay kid in 1980s Queensland was a tough experience, you had to learn fast, opposition took many forms, and much of it was far from pleasant. It taught me, though, to respect all people, and to create a safe environment where all are respected, all treated with dignity, all supported, and all given opportunity.”
Those values run through the QLM culture, which, given its multiple locations, has to be sensitive to multiple cultural situations. Pugh says, “We fully support the local and religious holidays. We have four plants in four countries in Asia, and they are all different environments.”
With the Malaysian and Vietnamese operations up and running by 2012, QLM continued its expansion in Australia – it bought Self Adhesive Markings the following year, and with it came its two HP Indigo digital presses, the first exposure the group had to digital label printing. It moved one of them to Hoang Ha, in order, says Pugh, to fully understand its capabilities in Vietnam. Self Adhesive Markings was just one of many businesses QLM has acquired over the years, including Label Print in 2007.
Further expansion into Asia came with Bangladesh in 2017 and Cambodia the year afterwards, but unlike Malaysia and Vietnam these two were greenfield operations. The businesses were created in part because staff from Malaysia had to return to their home countries due to visa laws. Pugh says, “It became an opportunity. You have to ask yourself, what can we add to the local market that isn’t there? Our answer was we could add international standard processes, procedures and productivity.”
That is the big question facing any Australian print business looking to expand into Asia, what can they bring? How can they compete in the low wage economy? Pugh says, “Price sensitivity is a factor, and in some markets it is the dominant factor. However, there are plenty of customers who are seeking international standards, who want to know their print will achieve a certain quality level on every piece of print, and who want to know it will be delivered according to schedule. And they want that quality of print and that firm delivery each and every time. The multinationals certainly want that, and a growing number of SME customers do as well. They don’t want to wait for hold-ups on their labels. These are the customers we can work with.”
While establishing the greenfield Asian business, the Australian operation was, and is very much part of the equation. Just prior to Covid, QLM moved into a new 3000sqm factory in Brisbane, and over the following years acted on its strategic vision, becoming a major player in the digital packaging space. It acquired Read and Luminar, and it also bought Trevor Coon’s business Elna Press, creating an integrated business, and with a strong manufacturing footprint in Melbourne. Elna, one of the first label printers in Australia, had gained huge respect in the market over the years. Pugh says, “Trevor Coon was one of the industry’s real gentleman and an early innovator.”
The most recent major decision, to expand into a bigger factory for Hoang Ha, came as the company’s growth exceeded expectations, but even so at 6000sqm it was a big step. Pugh says, “When we first looked at it we thought it was too big, we’d never need all that space, but in fact we do, it has given us the opportunity to add new services.” The production floor is more than double the size of the previous factory.
The factory is split into zones, with flexo, letterpress, digital, and offset presses serving the labels, flexible packaging and offset markets. All plates for all processes are made in house with CTP.
Flexible packaging is becoming a major part of the operation. Hoang Ha is in the vanguard of pouch production in Vietnam, with a complex converting line producing the goods for an increasing range of clients, the print produced on an HP Indigo 20000. Top-of-the-line equipment seems to be one of the key platforms for QLM, the offset press at Hoang Ha is a five-colour B1 Heidelberg.
What Pugh says is the most important space is in an annexed room to the side of the main factory space: the gym and rest area. He says, “You can’t underestimate the benefits of keeping a healthy body. It is energising, and somehow enables creativity.” A personal trainer visits three times a week to provide instruction to staff.
That creativity is manifest in the multiple developments that come from Hoang Ha itself, including new multi-layered labels, incorporating elements such as pop-out labels, all developed in-house, which have proved to be a real hit with the local market.
In addition to pouches and promotional pop-ups Hoang Ha is also pioneering security label development, all evidence of Pugh’s commitment to support his staff, to believe in them, and to encourage them to bring their ideas to the table.
Like any business attempting new things, QLM has had its fair share of bumps in the road, from necessary documents lost in bureaucratic bungles, to machinery installed that was a long way from fit for purpose. Pugh says, “Facing obstacles when establishing a business overseas will certainly occur; patience and thought are what will get you through them.”
His early experiences of homophobia were stark, but Pugh says today while far from perfect, he would be surprised if that level of animosity exists for those in his situation. He says, “It is a better world. QLM, in common with many businesses today promotes according to talent, and the ability to meet KPIs, irrespective of race, religion, gender, or sexual preference. We focus on creating a safe space where people can be their authentic self.”
Ho Chi Minh City is Pugh’s home now, and has been for a decade. He spent three years as president of the Vietnam Australia Chamber of Commerce, which he says was a “wonderful” period, culminating in the Chamber becoming the only one in the world to receive a grant to further relations, and to the tune of $1m. He says, “With a population approaching 100 million, a rapidly growing middle class, Vietnam is a country where Australian businesses could play a major part.”
Certainly, QLM Label Makers, under Pugh’s leadership, is playing a major part in Vietnam, and the other Asian countries it is in, adapting and innovating to meet and to encourage the changing demands and opportunities, both in labels and packaging in the emerging nations. Will it remain a one-off pioneer, or will other Aussie print businesses look to follow its lead and seek opportunity in the world’s most populous and fastest growing region? Opportunity beckons.
This article was first published in the September-October 2024 print issue of Packaging News, p45.
