COVID-19: European Printers and Converters Share Their Stories
The COVID-19 pandemic may be a global crisis, but the damage and challenges it is causing have distinct geographical differences. Across Europe, government responses have differed, and economic impacts, although negative across the board, are differing with it. Print, like many industries, is feeling the pinch. A coronavirus impact survey from the British Printing Industries Federation (BPIF) makes for discouraging reading, with close to three-quarters of respondents reporting a ‘considerable downturn’ in order levels, more than three-quarters stating that they required some degree of emergency assistance to maintain cashflow, and just over one-third are ‘extremely concerned’ about the short-term survival of their business.
The packaging segment is among the most resilient areas of the industry, thanks to high demand for food and pharmaceutical packaging and an e-commerce boost. According to Heidelberg’s Print Media Industry Climate report, COVID-19 is having either no impact or a positive impact overall on packaging and label printers in Europe.
“Fortuitously, the supply chains across our market sector have felt a minimal impact from the outbreak of COVID-19, Paula Birch, global sales director for Parkside, a flexible packaging firm with locations in the U.K. and Malaysia, says. “We fully understand the privileged position we are currently in with many industries grinding to a halt during this phase. We are continuing to ensure our customers are receiving the highest quality flexible packaging to enable them to keep operations running smoothly.”
However, with supply chain fluctuations and variable consumer demand, the need to be agile and adaptable is crucial even in the packaging sector. For example, Neil Jones, chairman of the European Flexographic Industry Association (EFIA), said the sudden and significant increase in demand put an initial strain on the packaging supply chain.
“COVID-19 has certainly presented significant challenges to the U.K. flexographic sector in its early days,” Jones says. “Emptying of food, drink, pharmaceutical and hygiene supply chains created demand spikes as consumers began panic buying. However, the industry came together brilliantly to respond, and production volumes have settled down again as time has gone on. What we are seeing in particular is streamlining of SKUs from brands in order to manage the demand volatility, which in essence works well for our printer community – lots of long run standard work keeping them busy.”
As a result of the increase in long-run work, Matt Francklow, director of U.K.-based Eco Flexibles Ltd, says a potential silver lining of the COVID-19 situation is a positive impact on sustainability.
“Packaging printers are as busy as they’ve ever been, but generally on a reduced number of SKUs, so we’re seeing more long run work,” Francklow says. “There has also been considerable change in terms of packaging sustainability. As alcohol is rightly diverted towards essential gels and handwashes to aid in the fight against coronavirus, costs are rising as converters seek ways to reduce solvent use. As such, we’re seeing a sharp upturn in printers making the switch to water-washable plates, which points towards a much brighter and more sustainable future for the packaging industry, which we wholeheartedly support.”
Outside of packaging, Bruce Podmore, managing director of Windles Group, a multi-faceted print provider in Thame, U.K., says the company’s primary business of greeting card printing is in a much worse position, stating the effect will be ‘catastrophic.’ Despite the negative impact, Podmore predicts a strong bounce-back.
“In my view, we will see a fairly rapid resurgence of the markets when indeed the high street opens back up,” he says. “I think it will die off quickly in effect in view of the environment, but will also pick back up quite quickly because of the eight week stock terms that the industry is based on at direct to retail.”
“We see with the recent noble efforts of Captain Tom* that it is fundamentally bedded in our culture to give gifts via the greetings cards model rather than to send emails, and therefore I do believe that greetings cards will come back very quickly, once the high street starts trading again.”
In term of government response, Podmore laments the U.K.’s reaction to the crisis and the impact it is having on small business when compared with its European counterparts.
“In other areas of Europe, within 10 days of the announcement of isolation, people had funding, even at individual levels, in their bank accounts,” he says. “Here, we saw 7 million people lose their jobs. We had the promise of the furlough system, but a gap for the better part of five weeks before any funding was released. Many small business were faced with the complete extinction of any form of revenue. They are not in a position to continue for five weeks and wait for the furloughing funds to arrive. Now, forgive me, but the statement, ‘we are forcing shutdown of the economy, but we will pay 80% of people's wages to be at home,’ but then taking five weeks to do so? I am most surprised there has not been more social unrest than we are currently seeing.”
According to the BPIF report, the government's support measures have received positive ratings, but access to this support has received a negative rating. 15% say this access has been ‘very poor' and 26% considered it ‘poor'. 20% selected ‘good' and just 2% ‘very good'.
In addition to paying employees, other business costs have emerged as challenges to overcome. For example, René Spanger, owner of Unfold, a wide-format printing business in Haarlem, Netherlands, says that government assistance in day-to-day business costs could be essential in keeping businesses afloat.
“There is government support, but mostly for employees,” he says. “It’s not enough, because there are still all the costs, like the rent of the building and the lease of the machines, and all these costs continue. So if we lose 50% of our income, it's very hard to keep all the employees.”
When asked if he thought the government could be doing more to help businesses, Spanger said he did, but acknowledged that there aren’t unlimited funds.
Italy hit the headlines as one of the earliest countries outside China to be badly affected by the pandemic. Luca Colombo, Project Manager at GFB Edit, located near Milan, explains that while there is government assistance, it’s not so easily available.
“Bureaucracy is always a complex matter here,” Colombo says. “State aid is activated in the form of lending facilities to tackle immediate liquidity problems, but for companies like ours we are talking about a maximum amount of €25,000, so nothing that is really game-changing.”
Colombo adds that the publication segment of the printing industry has had some long-standing challenges to contend with that are being exacerbated by the crisis.
“Here in Italy the editorial sector has been in a constant crisis for the last 20 years, as publishers have been extremely slow and timid in transitioning to the digital age,” he says. “They have been reluctant to search for new business models, even though revenues have been constantly declining. So, we are preparing for a kind of war-in-the-trenches scenario. I think that it will be a long and slow journey from the state-of-the-art to a future that is still up in the air and, in the meanwhile, this will translate in less revenues, less opportunities and more cost-driven competition.”
While other countries in Europe continue to battle the peak of the pandemic, Italy, affected earlier and indeed worse than others in the eurozone, is beginning to relax certain restrictions and reopen some factories and businesses, having endured Europe’s longest lockdown. But what long-term impact will the pandemic have on the country’s print businesses?
Francesco Mariani, owner of Flexprint, an online-based print shop in Lissone, Italy, predicts a shift in outlook towards online partners.
“Printing companies will be hit hard by COVID-19,” he says. “The effects of reducing orders and reducing volumes will be evident and will leave a mark for a long time. Our hope is that some sectors that previously did not look to online printing companies as possible partners will change their minds. Flexprint, as an online print shop, hopes that this attitude of distrust in digital printing graphics companies can be overcome. We are ready to increase our services in order to meet the needs of our customers.”
Many aspects of recovery, regardless of geography, will come down to preparedness, rather than foresight of such an unprecedented situation. For Windles, its purpose-built, spacious factory helps when it comes to managing staff safety. Unfold has paid off all of its equipment save for its new Agfa Anapurna flatbed, installed just before the pandemic hit.
“That's why we are in a strong position, but I can imagine that some of my colleagues that have high rents of the printers, what they have, they are going to have a really difficult time,” Spanger says. “And I think some of them will definitely not make it.”
But as the crisis continues to impact companies throughout the continent, European print service providers are turning toward their internal capabilities to find ways they can provide support to those on the front lines, including assisting in the production of needed personal protective equipment (PPE).
“Importantly, the U.K. flexographic sector has stepped up to contribute to supporting the healthcare sector and essential workers,” Jones of the EFIA says. “From face masks and gowns to labels for new sanitizer products, many businesses have switched operations and stepped up to the plate to ensure the safety and protection of everyone. We are tremendously proud of our industry as a result.”
Windles has also stepped up to produce Medi-Visors, lightweight face visors that it is providing to the NHS, using its existing technology base from the production of high-end packaging for cosmetics, pharmaceuticals, and food to comfortable, high-quality PPE.
As with the rest of the world, the situation in Europe is constantly developing. Fortunately, associations and organizations across the continent continue to help print businesses weather the storm by providing resources, navigating aid, and conducting research. Unfortunately, European businesses will be feeling the effects of this pandemic for quite some time. 2020 was set to be an exciting year, with drupa to look forward to alongside a host of industry events that are now cancelled or postponed, and anecdotally, many companies have stated that they were enjoying a sterling start to the year before COVID-19 hit.
A final remark from René Spanger undoubtedly expresses a sentiment shared by too many businesses across the industry at present: “It’s just a shame – things were going so well, and that’s been killed in an instant.”
*Captain Tom is a British war veteran who raised more than £32m for National Health Service (NHS) charities when the pandemic hit, and recently received more than 125,000 cards from the British public for his 100th birthday.
Karis Copp is a U.K.-based journalist and communications specialist. With a background as a writer and editor in the print industry, she writes about print and technology news and trends, reports on industry events, and works with businesses to help them tell their stories and connect with their customers. Follow her on Twitter @KarisCoppMedia.