LATEST ON CANADA’S PRINTING MARKET

[Anonymous]

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.

[Author]

January 7, 2006 at 10:40 AM