Print volumes trend down in 2016 – Rasmussen

Increased consolidation and the growth of the wide format and digital sectors were hallmarks of the industry in 2016, says Richard Rasmussen of Ascent Partners, in his  annual review of the defining trends throughout the year.

According to his seminal Market Watch report, the total number of printing outlets decreased by about six to eight percent over the course of the year, in line with recent data on the decline in paper consumption. He highlights the proposed PMP buyout of IPMG as the biggest merger of the year, though it has yet to be approved by the ACCC.

"What remains to be seen is what happens with the three other major heat-set players - Franklin Web, AIW and Bluestar (who have recently announced the purchase of a new Rotoman 16pp web) - and the non-core businesses of IPMG and PMP," he said.

Rasmussen advises those considering mergers or exits to plan well in advance. "Many see acquisition as a key growth strategy, whist others look to mergers. On the other side, for those looking to exit, planning is key to maximise your return. Better to plan to exit than have it forced upon you.

"This industry consolidation looks set to continue, so, in the festive break period, I strongly encourage all to think carefully about which side they want to be on, the consolidator or the consolidated, and then to plan accordingly," he said.

2016 was a drupa year, and many companies across Australia invested in new kit over the last twelve months. Rasmussen also points to the trends in the growth of wide format and digital, digital related bindery and large long offset machinery. "It's a measure of industry confidence – printers don’t purchase and install major equipment if they don’t think their business will grow and prosper because of it."

He added a caveat, though, pointing out that the review represented only a small portion of the total sales and installations for the year. "There may be 100 or so businesses listed in this review, which conversely means there are far, far more printers that didn’t choose that course," he said.

Below are the listings from Rasmussen's review.

Mergers and Acquisitions

Publicly Listed Companies

1. PMP and IPMG proposed merger. As two of the largest heat-set web players in the market, this was far and away the largest merger of the year. Although the merger still needs PMP shareholder approval, which one would think is a fait accompli, it then needs approval by the ACCC. They disallowed it back in the early 2000s, but this time there seems more certainty. What remains to be seen is what happens with the three other major heat-set players, Franklin Web, AIW and Bluestar (who have recently announced the purchase of a new Rotoman 16pp web) and the non-core businesses of IPMG and PMP.

2. Colorpak sells to US based Graphic Packaging – This was a major announcement for the local packaging industry as Colorpak, having taken over Carter Holt Harvey in 2011, was one of the largest in the market. Recently we saw the last of the Commins family, founders of the Colorpak business, leave the business.

3. Amcor, a packing firm of a different kind, clearly had acquisitions as a key business strategy in 2016. They purchased Alusu (South America) - $A435 mill, Deluxe Packages (USA) – $A45 mill, Plastic Moulders (Canada) – $A44 mill, Sonoco (USA) – US$220 mill, and finally Hebei Qite Packaging (China)- $A34 mill (making it their 11th flexible packaging plant in China).

4. BlueStar were again active in concluding acquisitions of Frost Merchandising, LCS Connect Fineline Printing (VIC), and The Mailing House (VIC). Interesting here is the diversification into merchandise, direct communications services, mailing as well as traditional print.

5. oOh!Media – purchased Cactus Imaging from OPUS Print Group for $6 million, paid $11 million for an 85% share in Junkee Media, and purchased 100% of ECN’s shares for $A68 mill.

6. APN Outdoor purchased Metro Space and IoM for around $36 mill.

7. APN News and Media set to acquire the remaining 50% of Adshel for $268 mill.

8. News Corp bought APN’s Australian Regional Media (ARM) for $36.6 mill.

9. NZME and Fairfax NZ's proposed merger was blocked by NZ Commerce Commission citing that the merger would mean that one media outlet would control almost 90% of NZ’s print media market.

10. RedBubble successfully lists.

11. News Corp closes seven Leader newspapers

12. QMS purchases 51% of ABsee for $6.6 mill in the Outdoor Advertising market.

State by State Local News

Major reported M&A activity. This summary reflects only a small portion of all M&As that took place in the year.

Victoria

1. On Demand. In the space of around one year, new owner Michael Wu put this business, once touted as Australia’s Largest Digital printer, went into administration. The business was later purchased by Wu’s ex partner’s business Dockland Press / Mercedes Waratah. The closure of Longbeach Printing, acquired in January 16 by Wu, followed.

2. Sales / Acquisitions– IMS sold to DDM, Burgess Printing and Packaging sold to Shur International

3. Closures – The Print Centre, Hi Mark, Pax Printers (later bought by Affinity Press),  Geelong News and Aussie Tabs.

New South Wales

1. Merger - McPhersons Binding and Graphic Book Binding.

2. Sales / Acquisitions– Burtons sold to Immij, Balmain signs sold to Pivot Creative.

3. Closures– Sydney Print Hub, Rotary Offset Press, Halgraphics, Sydney Allen (later bought by Focus), Elite Packaging Solutions, Perfectly Bound, Cooks Printing, Swift Display, Kingsgrove Press, Yellow Print Pty Ltd, Printprocol, Roller Poster (later bought by Foxcil), Bellmac Cartons (part sold to Johnston Packaging).

Queensland

1. Sales / Acquisitions – The Printing Office sold to Print Approach.

2. Closures – Alto Books, Tully Times, Instathreads. Cross Printery and GT Printing Services Aust. Pty Ltd.

3. New Premises – Oji to build $68 mill. packaging plant.

South Australia

1. Sales / Acquisitions – Custom Cartons sold to Detmold.

2. Mergers – Printak with Cruickshank.

3. Closures – Five Star Print, Unibooks, Cadillac Printing (later sold to Access Print).

Western Australia

1. Sales / Acquisitions – Percival Printers sold to Westcare, Pilpel sold to Advance Printing.

2. Closures – WPM Group, Sun City Publishing, Perth Print with 100 jobs lost, the result of the ACCC approving Seven West Media’s bid to takeover News Corp’s Sunday Times.

Sales and Installation of Major Plant and Equipment

Web Presses

Man Roland – Bluestar (NSW) – 16pp Rotoman Heatset web.

Offset

Heidelberg – Bluestar – XL 106-10-P+LX –LEUV, and Summit Press (QLD) – SM 52-5.

Komori – HeroPrint – 10 colour HUV (NSW) and 5 colour 40 inch (WA).

Roland – Labelmakers (VIC) – 8 colour 700 Evolution Press, Orora (NZ) – 707 LV Hi Print Press.

Ryobi – CMYK Hub (NSW) – RMGT 9 A1 8 colour press.

KBA – Centrum (NSW) – Rapida 145 cm press.

Nanography

Orders were placed for three 10-colour Komori NS 40 Nanography Presses by Vista Print (AUS), Bluestar (AUS), and Hero Print (AUS).

Digital Press

HP – Griffin Press (SA) installed an Indigo 10000, Pagewide T410 web press with Kobus line (hailed now as the most advance book printing site in the world) and Indigo 7800. Dominion Press (NSW) a 7800, CMYK Hub (NSW) a 10000.

Xerox – Bluestar (AUS) – I Gen 5 x 4, Sema (NSW) – I Gen 5,  Cheque Mates (NSW) – I Gen 150.

Konica Minolta – Arte Graphica (SA) – Biz Hub C 1000.

Oki – Digital Press (NSW) – Pro 9542dn press.

Ricoh – Frontline Print (NSW) – Pro C7110SX, D&D Digital (VIC) – Pro C 9110, Pro 7100X, and Summit Press – 9100.

Epson – Abel Labels (TAS) – Sure Press L-4033AW, Flash Photobition (QLD) – Sure Colour SC 7200 x 2, Dinkums (Vic) – Sure Colour SC 7200 D.

Label Press

Mark Andy - Label Force (WA) – P5 label press, and two other P5 presses in NZ and QLD to unstated printers.

CtP

Kodak – Achieve CtP systems to Coaster Kings (NSW), Lime House Printers (QLD) and Impress Printers (ACT).

Screen – Stellar Print (QLD) – Platerite PT-R4600E, Label House (VIC) – Platerite FX 870 II CtFP.

Wide Format / Flat Bed

Agfa – Clegg Media (QLD) – Jeti Mira MG 2732 flatbed UV, Catalyst (NSW&QLD) – Jeti Tauro six colour flatbed and Anapurna M3200i.

Flora – Signarama Brendale (QLD) – Flatbed printer

Esko – Resolution Imaging (VIC) – Kronsberg XP cutting table

Fuji Film – Civic Media (QLD) – Uvistar 5 m Grand Format Printer

HP – Fireworks Digital (QLD) – Scitex FB 700 UV flatbed, Art and Soul (NSW) – Latex 3100 (via Spandex), POS Visual (VIC) – Scitex FB 550 (via Spandex)

Mimaki – Avon Graphics (AUS) JFX 500-231 and JV 300-160, Colour Synergy (QLD) – JFX – 200 (via Spicers).

3D Printers

Massivit – Omus (VIC) and Composite Images (NSW) – each a 1800 3D Printer

Finishing

Duplo – Summit Press (QLD) – DBM 600i Collate, stitch and trim.

Horizon – Ready Steady Print (VIC) – BQ 280 PUR Perfect binder, Pinnacle Printing (VC) – Stitchliner 5500, Reflex Printing (SA) – Collator, Stitcher, Trimmer, Colemans Printing (NT) - BQ 470 PUR Perfect Binder.

Daeho – IPG Connect – 1160 Guillotine.

Dumor – Minuteman Abbotsford (VIC) – Sheet cut, perforate and creaser.

Ascent Partners captures this information from industry sources and reports it monthly in the free newsletter, Market Watch. See www.ascentpartners.com.au to subscribe.