Crunch time for web printers as catalogue demand fails

Excess capacity in the catalogue sector continues to place pressure on prices and margins, and while PMP claims it has enough work to keep its presses busy Evans has warned on the tight times ahead for heatset web printers. He flagged an inevitable rationalisation of the sector.

“The competition in the catalogue market is intense and there will have to be rationalisation in the next few years,” said Evans, in a report in the Australian Financial Review. “We aren’t having any talks on that front at the moment, but there are a number of printers out there who don’t have enough work.

PMP confirms it has suffered a fall in demand for catalogues during the first half of 2006. While larger customers like Woolworths and Kmart have remained constant and it secured the contract for Coles Myer, the smaller to medium sized retailers have been cutting back on catalogue distribution.

PMP is gearing up to launch its new catalogue distribution system in New South Wales this September, with the other states to follow next year. The company hopes the new system will boost its catalogue work through its automation of the collation process and use of GPS tracking for delivery.

Evans claims the new distribution system will allow PMP to boost its rates of on-time delivery from 80 per cent to 98 per cent.

“We can convince marketers, who have never used catalogues because of concerns about their distribution, to change their minds,” says Evans. “That will mean more print work and more distribution work.”

He maintained the magazine sector of the heatset web market is relatively stable, with most of the work shared between PMP and Michael Hannan’s IPMG.