LATEST ON CANADA’S PRINTING MARKET

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LATEST ON CANADA’S PRINTING MARKET

 user 2006-01-07 at 10:40:00 am Views: 56
  • #13746

    Printers market challenging and changing(CANADA)
    The
    printing business has come a long way since Johann Gutenberg invented
    the printing press and movable type in the 1450s. Today in Canada, it’s
    the fourth-largest employer in the manufacturing sector, one of this
    country’s most technologically advanced industries – and it’s extremely
    competitive.
    “I wouldn’t want to be an independent printer today,”
    says Alan Roberts, vice-president of marketing for The Printing House
    Ltd., a 65-branch national network that specializes in fast-turnaround,
    on-demand printing.
    “How do you compete? The technology is available
    to anybody, so you can’t say: ‘My quality is better than the next
    person’s.’ It’s who does a better job of managing the relationship,” he
    says.
    More than 98,000 people work in the industry in more than
    5,500 printing businesses, from quick-print shops to multinational
    corporations, according to a 2004 industry profile prepared by the
    Ottawa-based Canadian Printing Industries Association (CPIA).
    Photo courtesy of Central Reproductions
    Central Reproductions president Ward Spencer is on a mission to stay current with trends.
    It’s
    not easy to make a buck in printing. Commercial printers are having to
    provide more services to meet customer demands, there’s price
    competition and printers are making less return on their investments in
    printing technology.
    And the Greater Toronto Area is the Hollywood
    Freeway of the printing business, with a plethora of companies vying
    for press work.
    “There are more trade printers in the GTA than
    anywhere in North America,” says Ward Spencer, co-founder and president
    of Central Reproductions Ltd., a Mississauga commercial printer that
    has been in business since 1981.
    A search for GTA printers on local search engine redToronto.
    com
    showed 522 listings, ranging from quick-print outlets to large
    commercial printers. And that Internet listing is not complete.
    One thing making the printing business harder is strategic sourcing by corporate clients, Spencer says.
    “They
    take a look at who their supplier list is, say: ‘We’re going down to
    one or two and funnel all of our work to those people,’ he says. “One
    of the highest numbers was 42 printers servicing one company and it’s
    down to two. So there are 40 printers who are basically scrambling to
    look for work to replace it. This is big.”
    Spencer says Central
    tends “to be there” on the supplier list because it offers an array of
    services in-house, from traditional printing to high-speed copying,
    binding, design, direct-mail and distribution, as well as variable
    marketing in which materials can be customized for different clients.
    “I’m
    hearing that printers are needing to provide more value-added services
    in order to keep clients and make some money, because printing prices
    are dropping and customers are being more demanding in terms of
    pricing,” CPIA president Bob Elliott says.
    Most of Canada’s
    commercial printing industry is made up of small companies with fewer
    than 20 employees. According to the CPIA industry profile, the largest
    printer is Quebecor Inc. with $8.2 billion in sales volume in 2003,
    followed by Moore Corp. at $3.7 billion and Transcontinental Printing
    Inc. at $1.5 billion.
    Elliott says to stay competitive, printing
    companies must continue to embrace technology and invest in new
    equipment even though it needs to be updated every five to seven years.
    Central
    Reproductions recently sold two presses and is investing “a few million
    dollars” in a new, faster press to increase productivity and cut set-up
    time from 90 minutes to 10, Spencer says.
    “We’ve been on a mission
    over the past year to make sure we get as current pieces of gear in
    each department as possible in order to stay current with market
    trends. Sometimes it really hurts because of what you have to spend,”
    he says.
    In the smaller market of Simcoe, Bob Kowalsky of Second
    Avenue Printing Ltd. is less concerned about investing in technology to
    stay competitive.
    “There are a lot of specialty houses out there
    now. What we can’t do here, we can find somebody who will do it as a
    trade and that’s beneficial to the business for sure,” he says.
    “We’re
    not too bad right now. We don’t have a whole lot of competition.
    There’s only one other printer in Simcoe, and I think there’s enough
    work for both of us,” Kowalsky says.
    The company has been in
    business since 1969 and is well known in the area, he says. “Most of
    our customers have been with us for a long time … it seems like
    around here, if somebody’s thinking of doing some printing, they’ll
    give us a call.”
    Second Avenue also does embroidery work on
    sportswear clothing. “Diversifying a number of years back really helped
    us, because we don’t just specialize in one thing,” Kowalsky says.
    Roberts
    of The Printing House (TPH) says he doesn’t consider other printing
    companies his main competition because TPH is “fairly unique” with its
    branch network and focus on on-demand, same- and next-day printing
    services. He adds that TPH’s primary competitor is offices equipped
    with higher-end colour copiers.
    Overseas competition, copier
    companies and a strong Canadian dollar also make it harder for Canadian
    printers to stay competitive.
    Spencer says copier companies are
    significantly hurting the printing business because they sell high-end
    production equipment to printers while also providing sophisticated
    office copiers and document management solutions to corporate customers.
    The result is a reduction in business “that normally the printer has,” Spencer says.
    “It
    doesn’t hurt the guy with one copier who’s downtown, but it does drive
    prices down because Xerox goes in at a rate that I can’t even charge,”
    he says.
    Kowalsky says a key to winning business is educating
    customers about the real cost of printing things themselves. “When you
    start doing 500 copies and you’ve got seven or eight pages two-sided in
    this annual report, and you’ve got somebody to run this machine and put
    coated paper through it and it’s breaking down, you’re going backwards.”
    Spencer
    says Chinese companies doing “excellent” print work with cheap labour
    resources can turn around complex printing and design jobs “in about
    three days” for something “that would take us about two weeks here.”
    He says that while the overseas competition is frustrating, “you either accept it and work with and around it, or you get out.”
    The
    higher Canadian dollar is making it more difficult for domestic
    printers to win U.S.-based business, Elliott says. In 2002, there was
    $2 billion worth of Canadian printing exported worldwide with 92 per
    cent of exports going to the U.S., but that’s changing.
    “We’re
    seeing some declines. If you’ve got a U.S. client and the dollar is
    threatening that client’s business, you’re going to have to find a way
    to keep it,” he says.
    Although high energy prices and the economy
    made half of 2004 “tough” for printers to turn a profit, Elliott says
    he expects 2005 will show positive growth. He adds that there is an air
    of increasing confidence in the industry.
    “There’s no doubt that
    there are challenges out there, but printers don’t seem to be the kind
    of people who put their head in the sand,” he says.