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Where Have All The New Presses Gone?






 

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By:  Nick Howard  |  Date: December 2014  |  Contact the Author
 

"Those were the days, my friend, we thought they’d never end . . . " The song popularized by Mary Hopkin in 1968 waxed over youth, lost opportunities, passions and a life now well past its prime. Cycles of every form have a beginning as well as an end. Technology breeds new revenues and fills scrapyards with redundancy. For the printing machinery industry, there is a lot of reminiscing about good times back in the day. The great period of litho printing press sales, what almost became an annuity business for press makers, is long over and will not return. Oh how painful it is to say that.

It seems like only a few years ago we were so excited to embrace a device that, either by violet or thermal laser, entirely eliminated a labourious step of the production cycle and make offset plates perfectly, without fit issues, and at incredibly fast speeds as lasers advanced by the month. Digital technology was our friend. Prior to CTP, the Macintosh computer also eliminated a huge chunk of the typesetting industry by letting us do it all ourselves. Fantastic new devices were going to rid us of waxers, light tables, film, cameras, plate-makers and a great deal of expensive labour. Everybody knew that strippers and other prepress employees commanded large paychecks. Wasn’t this future fabulous?

As I look back at some of the projects we were involved with at Howard Graphic Equipment, I find that no one really had any idea of where mobile computing, particularly the smartphone and tablet, would take communications.

We once had a customer who had a rather simple contract to print a 10-point cover and then stitch it onto popular magazines. It was for a now-defunct airline, to be used on the aircraft. The airline wanted to ensure these magazines were returned and so had produced the magazine with its logo emblazoned on the false cover. In time, the costs proved too high and the airline asked instead for a sticker to be tipped onto the cover. Finally, the magazines as a cost were dropped altogether.

Another customer produced a weekly sports betting card. These were perfected one over one and printed in the millions. Again costs and technology overtook print and now all the betting is online, no day-changing betting cards, just a receipt with the details.

Halcyon Days - Where have all the new presses gone?

In the early 1980s, we did quite a lot of business with an accounting publisher. Every time there was a change in Canada’s revenue act new sections had to be printed. Even then hot metal Linotypes were used to make copy. It was proofed and then film and plates were made to run on a web. The bindery was enormous to handle the accounting publisher’s work. It had separate lines for side stitching, hole punching and perfect binding. The annual tax-code book was almost two inches thick and expensive. Accountants, who were members, bought special binders for all of the inserts of changes that would occur each year. The Internet almost overnight eliminated all of this mechanical work and hundreds of jobs.

Many printers found themselves in the same situation with legal books and court decisions. Changes in the law created a great deal of print and case-bound work. Think of the law offices up until recently, where huge libraries stored the requisite purchases for dozens of sets of law books. If not annually mandatory, dozens of new thick books spoke to a law office’s prestige Automotive manuals and parts books were a staple of a few of our customers, too. In the turn of just a few years, almost all are now out of print entirely.

In the early 1990s, my company Howard Graphic Equipment purchased a Miller perfector from a printing company in the east of England. This firm had a long history. They were ensconced in what had been a carriage house, even had an 1800s workable water closet. The biggest piece of business for this printer was railway timetables. Almost all of it is now redundant. A smartphone can look-up the schedule and buy a ticket to ride without any paper being expended.

Wondering where all of the presses have gone is an intriguing question. In a commendable open manner, KBA in its latest annual financial statements for 2013 approached this difficult subject. KBA commented that group sales had slumped 35 percent since 2006. Since KBA is heavily involved in both sheetfed, web and special presses (currency and metal decorating), it has an almost split revenue business at €571.9 million for sheetfed and €527.8 million for web and special presses. KBA also acknowledges that since 2006 its Web sales have fallen 70 percent and sheetfed almost 50 percent. The statements also comment that the Web business will continue seeing retraction in the coming years. Should we assume KBA, although heavily diversified, is an example of what all major press makers are going through? The answer is yes.

Competitors to KBA may argue that the business of newspaper printing (long a staple of KBA) exacerbates the drop in sales. They may also suggest that perhaps KBA had a smaller commercial and publication customer base, or that what KBA produced was not as suitable? But KBA is a major supplier in both fields. On the sheetfed side, KBA owns a major position in packaging and Very Large Format sheetfed printing. New in-roads in technology have been poured into the Rapida 106 and 145 platforms. One surmises with its packaging strength KBA’s only real rivals are Heidelberg when it comes to imaginative, multi-purpose machinery for the carton industry. Komori and Manroland also compete in this segment with Manroland running a close third to KBA and Heidelberg in press variants.

Halcyon Days - Where have all the new presses gone?

We as a machinery segment are a reflection of you the printer just as you are a reflection of your clients. Therefore. we must assume printers cannot make the math work when calculating return costs for a large piece of machinery. Presses that cost a million dollars plus are no longer the prime piece of manufacturing gear in a printing business. They may never be again. There are exceptions of course. Trade printers who do it cheaper, not better, may consider new machines. Packaging printers will because the business is stable. Smaller commercial printers, however, will not. They may buy used, but its doubtful that a majority of shops can draw enough profitable work to pay for today’s engineered marvels.

Data was once the exclusive domain of the printer and publisher. The only way any kind of data could be distributed was through a printing press. Google et al changed all that.

"David Carr 2013" by Ian Linkletter - Own work. Licensed under CC BY 3.0 via Wikimedia Commons. David Carr, writer for The New York Times, does a masterful job explaining how the trend from a physical method (newspapers) to online is humbling. During a recent speech in Vancouver, Carr eluded to this fact when explaining the state of his employing newspaper. It was as much funny as it was sad for those of us in the business. He explained newspapers are offices where everyday information comes in and is collected. Then a bell goes off and everyone stops collecting news and starts to write down what came in that day. They send the copy to a giant press where it’s printed, rolled up and eventually thrown onto your front lawn.

Carr accepts the inadequacies of news distribution via print while at the same time considering that large dailies like The New York Times seem to be weathering the storm and seeing growth via online pay-walls. Carr hastens to add that it’s the medium-size papers suffering the worst, while small local papers, for the most part, continue to do well in the communities they serve. News is data and so is almost every piece of information we need, which used to be mailed to us. First Gutenberg and now the colloquial Google has changed our world again.


David Carr speaks at the PuSh International Performing Arts Festival at Capilano University, in North Vancouver, BC.


Photo credit: "David Carr 2013" by Ian Linkletter

Despite the odd period of increased new machinery order intake that prevailed in late 2013, the industry at large will not go shopping for new litho machines again. While I have a vested interest, few press makers would argue the second-hand press business becomes more important to lessen a printer’s investment risk. It is not coincidence that used machines now are a much bigger piece of the machinery trading pie than ever before in the history of printing or that most press makers now have full-scale used press operations. The 50 percent machinery sales shrinkage in seven years, as reported by KBA, is reality for every litho press maker. Postal rates and other fixed costs are impediments that cannot be overridden with faster machinery costing millions of dollars. Where have all the presses gone? Nowhere it seems.


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