January 2008 Issue
2008 Hot Markets — Charting Your Course
CONTRARY TO “economic consensus” forecasts1 that are merely opinion averages, the United States will outpace 2007 with annual growth exceeding 6.5 percent nominal (3.4 percent real) Gross Domestic Product (GDP) through the next two years. Foreign investment, immigration and productivity gains will more than offset exaggerated “crises” like sub-prime mortgages and rises in oil prices.2 Former GE Chairman Jack Welch advises the obvious: “Move up the food chain and stop complaining about the present. If residential ownership weakens, move to residential rentals.” The same applies to printing sales. Migrate to where the markets are hot and to the places and sectors underserved by our
AbitibiBowater Initiatives to Help Save $375 Million
MONTREAL—AbitibiBowater plans to permanently close four paper mills and suspend operations at others. These actions will reportedly result in the loss of about 2,600 jobs as the company vies to save $375 million by 2009. The move by the newly formed company—created by the merger of Abitibi-Consolidated and Bowater Inc.—will lower its newsprint and commercial printing paper production capacity by about one million metric tons annually. Three of the mills to be permanently closed are located in Canada: Shawinigan, Quebec; Dalhoisie, New Brunswick; and Thunder Bay, Ontario. The fourth manufacturing facility is located in Lufkin, TX. Production is also being halted indefinitely at mills
ACROSS the Nation
Celebrating the New, But Treasuring the Old LOUISVILLE, KY—With the installation of its newest press, an eight-color Heidelberg Speedmaster XL 105, and the historical display of its oldest, a 100-year-old Heidelberg letterpress, V.G. Reed and Sons has spanned a century of printing technologies. As a print and fulfillment solutions provider, the 140-employee company serves a wide range of customers including Fortune 500 companies, financial services firms, manufacturers, healthcare HMOs and niche publishers. ARIZONA BULLHEAD CITY—Two Quad-Stack web printing units from Web Press Corp. have been purchased by Brehm Communications, one for its News West Publishing location here and the other
BINDERY matters
Muller Martini Teams with Marines In Annual Toys for Tots Drive LONG ISLAND, NY—For the fourth straight year, Muller Martini of Hauppauge joined forces with the U.S. Marine Corps Reserve to help make the holidays special for disadvantaged local children. There is nothing more heartwarming than the smile on a child’s face after receiving a new toy for the holidays, and Muller Martini employees collected hundreds of them. The company also makes a financial contribution to the program. “It is truly an honor to be able to do what we can both as a company and as individuals to help make the holidays
Bradford & Bigelow — Company on a Mission
LIKE TIGER Woods reading the greens on the 18th hole of the U.S. Open, John Galligan is a man who exhibits unflappable focus. Galligan, the president of Newburyport, MA-based Bradford & Bigelow (B&B), knows what it takes to be successful as a book printer, and that entails keeping it simple. This $25 million printer, nestled about 30 miles north of Boston, specializes in one- and two-color 81⁄2x11˝ book production for the highly competitive elementary, high school (el-hi) and college textbook market. No four-color casebound, coffee table, 6x9˝ or 7x9˝ products. If ever a company embodied the definition of “niche,” it would be
Chronicling the Past, Predicting the Future
HEIDELBERG, GERMANY—Similar to expectations for the overall economy, sales for Heidelberg in the United States are expected to slow, but still grow, this year. That was the forecast provided by Marcel Kiessling, president and CEO of Heidelberg Americas, during the parent company’s 10th annual year-end press conference held here recently. With sales growth of 15.2 percent in fiscal year 2006, followed by 13.4 percent in fiscal 2007, he predicts Heidelberg’s U.S. sales growth to be approximately 5 percent in the current year. These gains can be partly attributed to Heidelberg’s success in the 40˝ sheetfed press market with its Speedmaster XL 105
Cost-Saving Measures — Save a Buck, Save a Job
UNLESS YOU are willing to pay three easy installments of $99.95 to receive “Shortcuts to Easy Street,” a six-hour seminar with 100 hot tips on how to trim 30 percent from your cost structure, no one is likely to deliver money-saving ideas to your front door. Apparently, the printer down the street is hoping to outperform your company, and would consider any advice to be providing comfort to the enemy. In fact, about a dozen companies contacted by this magazine responded to a request for money-saving ideas by saying, “We’ll take a pass this time around.” That’s a fairly strong indication of the economic
Court Rulings Spur FMLA Update
The U.S. Department of Labor (DOL) announced it will issue a proposed and then final regulation by the end of 2008 addressing key court decisions regarding the Family and Medical Leave Act (FMLA). The pivotal decision was a 2002 Supreme Court ruling that invalidated a provision in the current regulation that said employers were to restart the FMLA clock of 12 weeks if formal family or medical leave designation was not given by the employer. At the time, this decision was viewed as a narrow victory for employers. The announcement by DOL follows its February 2007 request for information from interested parties
DIGITAL digest
Océ Speaks Volumes, Adds Ink-Jet Line BOCA RATON, FL—Gone, its seems, are the days when equipment vendors waited for a major trade show to launch new products. Océ staged its own event just before the holidays to debut two additions to its line of continuous-feed, high-volume printing systems, including an ink-jet system. The company already has more than a 50 percent market share in that printer segment, noted Joseph Skrzypczak, president and CEO of Océ North America. “We expect that to grow…as we expand our market and geographic coverage and drive brand awareness.” The new Océ JetStream platform is based on piezo-electric ink-jet (drop-on-demand)
Digital Printing Observations — The Technology Race Is On
THE PRINTING industry is bulging with new and improved process technology, but implementation of what is available proceeds at a faltering snail’s pace. With Drupa 2008—the global printing big box superstore—opening its showroom in late May, the technology bulge is about to turn into a confusing avalanche of competing technologies and products. Suppliers have started to hold their pre-Drupa show briefings for analysts and the trade press. Clearly, the technology race is on. While the announcements of new print software to the introduction of heavy pressroom iron and automated, fault tolerant postpress equipment accelerates, what leads the differentiating innovation pack with the promise of
Environmental Sustainability — The Greening of Print
PRINTING USED to be synonymous with pollution. But, not anymore. One thing that’s constant in this world is change. And 2007 was a milestone year for earth-friendly initiatives in the commercial printing industry. Last year, lots of printers of all sizes started turning green, while many others turned greener still. Printing companies are becoming stewards of the environment… in the paper they buy, the ink they use and the less VOCs they emit. New and improved vegetable-based inks and recycled paper grades are more available. Paper manufacturers and print providers are earning Forest Stewardship Council (FSC) and Sustainable Forestry Initiative (SFI) chain-of-custody certifications. Printers
Financial Woes Rock Quebecor’s World —Michelson
IT WASN’T a very joyous holiday season for Quebecor World, North America’s second largest printing conglomerate. CEO Wes Lucas departed—fresh on the heels of his company’s plan to sell its 18 European facilities to The Netherlands-based RSDB Group for $341 million ultimately being voted down by RSDB’s shareholders in December and Quebecor World pulling the plug in late November on a refinancing plan to issue more shares due to weak market conditions. The saga continues: At press time, Quebecor World reached a new accord with its lenders mandating that it obtain $125 million in new financing by January 15 and consumate a
GREEN Scene
Eco-Friendly Printers Honored For Their ‘Green’ Printing Initiatives BRANCHBURG, NJ—Agfa Graphics recently selected H&S Graphics of Lodi, NJ, and Accell Graphics of London, Ontario, as the inaugural honorees for its Environmental Recognition Awards program. The award recognizes Agfa customers that use “green” printing technologies, promote environmental awareness to their customers using those technologies, and whose environmental efforts go beyond using Agfa’s ThermoFuse plate products. Additional steps taken by H&S and Accell include recycling 99 percent of production materials, printing on FSC- certified stocks, using green energy and cutting VOCs from their inks. INDUSTRY NEWS Corey B. Brinkema has been appointed
Insider Trading Conspirator Cops Plea
NEW YORK—A former Quad/Graphics employee pleaded guilty last month for his part in an insider trading scheme that pulled in more than $6.7 million. Juan Renteria pleaded guilty to conspiracy and insider trading charges at a U.S. District Court hearing here, according to a Reuters report. Renteria and Nickolaus Shuster were accused of stealing advance copies of BusinessWeek and passing stock names mentioned in the “Inside Wall Street” column to ex-Goldman Sachs employees Eugene Plotkin and David Pajcin. Renteria, the last of six defendants, was paid $500 or more for each copy of the magazine, according to reports. He faces a maximum of 25
Leadership, Financing Troubles Quebecor World
MONTREAL—Only days after confirming that the sale of its European assets had failed, Quebecor World announced Wes Lucas stepped aside as president and CEO of the troubled company. Lucas is being replaced by Jacques Mallete, who previously served as executive vice president and CFO. Quebecor World would only say that Lucas was leaving the company to pursue other opportunities in the United States. Last year definitely ended on a sour note for Quebecor World. Shareholders of Netherlands-based RSDB NV voted down the proposed C$341 million purchase of Quebecor World’s European printing business, leaving North America’s second-largest printer in precarious financial straits. The company received
Making Big Impressions
Holger Garbrecht, the new president and CEO of KBA North America, took a few minutes to answer some questions regarding his company, the marketplace, new technology and the upcoming Drupa exhibition. As a relative newcomer to the American printing market, what are your observations of the U.S. printing industry in comparison to that of Western Europe? Holger Garbrecht: The U.S. market is more diverse. An example is that many printers are looking more toward large-format printing or long presses with UV and high automation. On the other hand, we are working with many customers that are looking for entry-level presses that will allow them
Monarch Litho Is Back Atop GPO List
CHAMBERSBURG, PA—Monarch Litho reclaimed its spot as the top-earning Government Printing Office (GPO) vendor in 2007 with about $30.5 million in government contracted sales, according to the annual Top 50 GPO Vendors list compiled by e-LYNXX. Montebello, CA-based Monarch had posted top sales for three consecutive years before getting nudged out by NPC of Claysburg, PA, in 2006. NPC fell to third in 2007 at $20.8 million, having been edged out by Chicago-based RR Donnelley for second with $21.4 million in GPO work. Rounding out the top five were Gateway Press, Louisville, KY ($18.6 million), and SourceLink of Elk Grove Village,
Muller Martini And Goss in Court Cases
HAUPPAUGE, NY—Muller Martini has filed two patent lawsuits against Goss International and Goss International Americas, claiming its saddlestitcher technology has been infringed. The suit, filed in U.S. District Court in Minneapolis, references an installation of the Goss SP-2500 saddlestitcher at a Banta (RR Donnelley) facility in Minnesota. Muller Martini is seeking damages and injunctive relief. Muller Martini and its sister company, Muller Martini Mailroom Systems, also filed suit against the Goss companies in the U.S. District Court of Delaware for infringement of a control system patent. That case involves Goss’ MagnaPak inserter and its SP saddlestitchers. In a statement from CEO Bob Brown, Goss
Phillips Printing — Passionate by Accident
ABSOLUTELY NOT! That was Jody Phillips’ response when his parents asked him to help at their newly opened print shop. Phillips, a college student at the time, was not going to be drawn into the family business. He had big plans for his future, and they did not involve being a printer. However, being the good son, he eventually (but begrudgingly) agreed to help them. . .but only for the summer. But, one summer is all it took. Phillips fell in love with the craft, the technology and the opportunity. And, the rest is history. That was 1984. Today, Phillips owns the small Ocala,
Postal Reform Effects Minimized for Graphic Arts
Few industries engage in the kind of symbiotic relation-ship shared by the graphic arts industry and the U.S. Postal Service (USPS). Consider that, at some point, the majority of printed products are mailed. At the same time, the postal system relies on the printing industry to supply much of its mail volume. The fate of each player depends in large part on the well-being of the other. In this context, the signing of the Postal Accountability and Enhancement Act (PAEA) in December 2006 was beneficial for the graphic arts industry. It was a move that spelled reform for the postal system that industry
PRINTER news
Open House Offers Cash Grab CHATSWORTH, CA—Impress Communications recently hosted an open house at its new facility here, which included a drawing to participate in a $50K Cash Grab Money Booth. Winners of the drawing had a chance to “test their skills” and grab as many airborne bills as they could in 15 seconds. Snatching cash was the perfect way to cap off the open house, which featured a variety of presentations, including: Web 2.0—The Current Era of the Web, Lighting for Digital Photography, Going Green/FSC Certification and Beyond, Single Message Marketing Strategies, and Specialty Printing Techniques. The staff at Impress offered Komori
Printing Rebirths — Finding True Love Again
INDUSTRY consolidators exist for a number of reasons, the main being an opportunity to make money by acquiring complementary (geographically or synergistically speaking) printing companies from owners who are looking for an exit to either retirement or another business opportunity. OK, so that less-than-shocking news doesn’t exactly leave you gagging on your afternoon coffee. But what does raise the eyebrows a bit is the notion that some printers would actually sell their printing business and (gulp) start another. No, not to run a custard stand, but actually embark on a second printing career. At first blush, this sounds like a questionable move, like divorcing
Protecting Those Who Promote You —Cagle
BITS AND PIECES A BIG shout goes out to the Milwaukee Journal Sentinel for splashing a nice, big feature on Wisconsin printers on the front page of its Sunday business section on December 2. In a story titled “Just call us Print U.S.A.,” writer Joel Dresang interviewed me and a number of printers who were included in the PI article that ran in our October issue, and gave nice play to the state’s unofficial/official dubbing by our magazine as the printing capital of the United States. Deba Horn-Prochno of Ripon Printers gave me a heads up on the nice center package by the paper.
Self-Promo Pumps Profits —Sherburne
SPEAKING WITH print service providers, I always find it interesting to learn how they justify investments, particularly in digital printing technology. In many ways, it can be a chicken-and-egg scenario. While most realize that eventually they must get into digital printing in some way, shape or form, do you wait until you have volume locked up, or do you purchase the equipment with the plan to generate the new business? Sometimes, printers will have outsourced volumes that justify procurement of a new digital device. But other times they simply see a new market need that must be addressed in order to stay competitive. Seldom
SUPPLIER news
Penn Graphics’ Owners Donate Pennsylvania Farmland for Preservation HAMBURG, PA—By adding more than 100 acres to the total, the enrollment of Benjamin and Patricia Scheffler’s farm into Berks County’s Agricultural Conservation Easement program enabled it to surpass the 50,000 acres preserved milestone. The property is also home to Penn Graphics Equipment, which is owned by the Scheffler family. (Ben is retired from the firm.) State and local government officials, county farmers, agricultural business owners, local media and dozens of invited guests were on hand at a recent event marking the Schefflers’ commitment. Currently, Pennsylvania leads the nation in farmland preservation with more
