2005 Market outlook Printers in Full Court Press
While installing efficient capacity is key to keeping competitive, it has many additional benefits. For one thing, the more efficient our equipment is, the more we can focus on reducing labor costs while improving career advancement opportunities and earnings potential for employees. Additionally, efficient equipment ultimately improves the quality, cost and immediacy of ink on paper, enhancing its long-term viability in the marketplace.
BOLES: This investment is not a reaction to any changes on the demand side, per se. These presses have been largely justified on the basis of efficiency. As printers, we're at a critical juncture. If a company is going to make this type of investment, it had better do the responsible thing and take capacity off-line. To be a leader in this business, you have to drive costs out of your operations. Capital expenditures are just one way to do that.
We have noticed an up-tick very recently in the magazine arena, though, pretty much across the board. In some cases we've seen year-over-year page growth of 15, 20 or even 30 percent. I suspect this will continue into 2005.
Printers also see opportunities arising from investments on a less grand scale. Brown Printing, for example, has elected to focus on distribution and put the infrastructure in place for offering co-palletization services for smaller volume titles. Rob Helms, director of Brown Logistics Services, is responsible for this effort.
PI: Why was the time right for Brown Printing to get into co-palletizing?
HELMS: It was only about a year ago that the U.S. Postal Service made an offering to the industry for additional work sharing discounts if printers co-palletize publications. This initially was set up as a two-year test. Based on the level of interest already seen, the postal service extended the test period. Now it appears those rates are going to become part of a future rate case in a formal way.