Top 30 Book Manufacturers — The Plot Thickens
KREHBIEL: Consolidation has created more juggling for market share retention and growth. Many vendors have been left out after these mergers. Some customers are feeling too heavily committed to the conglomerates. And price pressures continue with leveraged buyouts.
HEGWOOD: Based on our observation that short-run, on-demand printing is increasingly becoming the trend among book manufacturers, the market for large web houses is shrinking, leading to excess capacity and consolidation. This consolidation has actually provided additional opportunities for [us] because we specialize in short-run, on-demand printing.
BB: What kind of effect has global sourcing had on North American markets over the past year?
CLARKE: The numbers tell us that the U.S. print market [as a whole] is losing about $100 million per year to global competition. That's pretty dramatic. Our strategy has been to deploy new assets and to focus on our Latin American assets as an alternative for U.S. publishers.
We've been able to grow that business more than 300 percent in the last three years, as [publishers] look for...certain attributes that make it more effective to produce offshore and can sustain the additional time.
GREGOIRE: We are seeing in the coffee table and kids' books markets that most of those markets have disappeared to China, because those books are not as time-sensitive as the other markets. If you look at school textbooks, some [publishers] have tried [going offshore]. We know that some of the larger school textbook publishers are under a lot of pressure to produce their books in China, when they have enough time. But, oddly enough, some have come back. They've attempted the experience, didn't like it and are coming back.
We also have publishers who are willing to pay a little more to remain in North America. That threshold seems to be 15 percent to 20 percent; beyond that, they will decide to go to China. The market is very volatile right now. People are testing the overseas suppliers.