WOA 50th ANNIVERSARY -- Web's Balancing Act
"The emergence is going to be a process, not an event," Frick continues. "I see the recovery following more of a shallow dish, rather than a 'V' or hockey stick shape. We still have historic instability and unpredictability within the traditional printing markets.
"For Lehigh, I'm very bullish about 2002. It is going to be a bumpy ride, but we've had an excellent first quarter and we expect to surpass plan in Q2," he adds. "We will get back to a position of viability and health for the industry. I see material evidence indicating that will happen in the second half of this year and, as an industry, we should see real robustness in 2003. However, I don't think it will be a rising tide that carries all boats."
Printers offering a reasonably distinctive and compelling value proposition will have the opportunity to survive, and perhaps thrive, over the next three to five years and beyond, Frick explains.
"However, undifferentiated, general commercial printers will experience ongoing margin compression and growth difficulties."
Ken Field, president and CEO of Continental Web in Itasca, IL, expects the near term to bring an active period of mergers and consolidations.
"This just has to happen," he says. "In an effort to drive costs from our process, the press manufacturers have designed the most productive and versatile equipment ever. Running speeds have increased and makereadies have been reduced to minutes, not hours.
"These advances have brought quantum leaps in throughput," Field continues. "One new Heidelberg Sunday press can equal three older presses in productivity. The older machines have not been taken out of service, though, thereby creating an abundance of capacity versus demand."
The competitive picture is further complicated by the fact that new technology is making it impossible for older systems to be financially competitive, the Continental Web exec says. Market pressures will force well-run, established printers that still have older presses to consolidate with other operations to remain viable and profitable, Field asserts.