State of the industry: Andy Vels Jensen tells it straight at the NPA National Print

Each year, Andy Vels Jensen, (or as he now likes to be known, Rock Bottom), managing director of Heidelberg Australia New Zealand, uses the printing awards to offer his insights into the state-of-the-nation. 2009 National Print Awards was no exception. Pithy and to the point, with trademark humour here is what he said.

Good evening. My name is Andy Jensen and I work for a non-profit organisation.

The 2008 world of print was not at all enjoyable. In fact it was downright unpleasant and one I could have done without. But then again maybe not, as it resulted in some positive changes within Heidelberg; one change being that I have asked my team to in future address me by my wrestling name: Rock Bottom.

I keep hearing that there’s no money in print: until last year, you could have fooled me. It seems someone forgot to tell VistaPrint in the USA:

•    Quarter to December revenue of $139 million (up 32 per cent)
•    Gross margin of 65 per cent and net income of $ 18.5 million (up 66 per cent)
•    CAPEX of $ 27.3 million (almost 20 per cent of revenue) and
•    $111 million cash in the bank.

And yes, they are in print, but they offer a value proposition beyond print and they understand operational excellence. So, even in times of a recession companies involved in print are achieving success.

This tells me that it’s not print which will become obsolete,  rather it’s some of the printers and owners, should they fail to create new business models around print. You can’t avoid the recession but depression is definitely optional.

Recessions are unpleasant and they always bring big changes. We believe that over the next 15 months the number of printers in ANZ will be reduced by at least 15 per cent from where we are today.
The number of suppliers will equally reduce. But, don’t be concerned, it’s not you; it’s always someone else …

However, one could be forgiven for thinking that these days the only bank willing to do business with our industry on reasonable terms is the blood bank and the sperm bank.

The make-up of our market has changed dramatically over the years and it’s not slowing down any time soon. Printers from ANZ will invest in Asia Pacific and overseas groups will move into our market.

A few new print groups will emerge, while others will grow even bigger and some may disappear. If you intend putting up the For Sale sign, keep in mind the old advice:

“Beware on which toes you step, as the toes may be carried by legs, which are supporting an ass that you may have to kiss tomorrow.”

The good news is that the printers still standing a year from now will have managed the difficult task of evolving from the recession and market changes, more profitable, stronger and better positioned than before.

Getting big isn’t necessarily the only great gig in town. There are plenty of opportunities for small-to medium-sized companies to prosper, even in times of a recession; in fact fantastic opportunities. Especially if you are flexible, maintain personal customer relationships, provide service and pursue new innovative ways in which to provide communication alternatives and print to customers. In other words, strive towards operational excellence.

And a great industry it is. A recent survey by Print21 Online reports it’s a clean industry. Few printers do drugs. No need, the printers say; they get almost the same affect by just working in the industry.

Speaking of addictions, a common challenge in our industry has been for printers to increase their prices. We are told that print-selling prices have gone down 33 consecutive quarters. That’s eight years! A worrying sign given that the cost to produce has only increased.

One problem we have is that there are still printers out there who believe that by continuously lowering their prices they must, eventually, find enough ignorant buyers so as to create some real sales volume. What’s the point? It’s like kamikaze pilots wearing helmets!

These ignorant buyers can only afford paying very little if they don’t have to pay on time or pay at all. So, it can come as no surprise to anyone that a few print brokers recently went bust, owing printers and suppliers millions of dollars.

Not only did these print brokers eat the lunch of printers, they actually managed to charge them for the lunch too. Maybe printers in future should find a print broker they don’t like, pay them money upfront and never print the job … At least they save the paper and can promote themselves as being a waterless, inkless, and paperless green environmentally friendly printer.
The message being, you can’t sell yourself out of your trouble and if the deal looks too good to be true, it probably is.

And yes, I hear you snickering at the back and I admit it, Heidelberg also managed to stuff up this year.

Increasing price has never been easy but it has to be top priority for any company wanting to survive. It goes without saying that any demand for a price increase will fall on deaf ears if your customer believes you have excessive costs and you have done nothing to respond to the economic crisis and shifting customer needs.

Why should buyers pay for your inefficiencies or inability to improve?You need to understand the dynamics of your own business and in light of the changed market conditions; you need to make the hard calls. As a minimum you need to understand what it costs you to produce.

Your customer has chosen print to communicate with an audience and it is your responsibility, as a printer, as a business person and as an industry member, to prove to your buyer that the decision to use print was the correct choice.

At PacPrint the suppliers to this industry have tried to put on display not only hardware and software that can help you achieve operational excellence, but also tools that will help you drive efficiency improvements on your factory floor and in your people.

Ultimately, it’s the people who excite the interest of customers in companies. It’s the people who extract the productivity from technology. And those who succeed in tough times are the companies who employ innovative people that identify with the company and who are capable of reacting swiftly to market changes and customer requirements.

Of course, you don’t have to come to PacPrint for this advice, the easiest thing is to call up consultants and bring them into your business. But as you know, consultants are known to borrow your watch to tell you the time.

Our aim at PacPrint has been to take your watch and ask you to describe it, after which we try to present you with your options, leaving you to tell us the time. Unlike the consultants, we are a soft bunch and just like you, we offer our services at amazingly low prices and may even not charge you!
So why not take advantage of this at PacPrint?

Move too slowly and you will miss the opportunity to be different and the chance to make a move on your competition. Indecision is definitely not the key to flexibility and although it may seem new to you, don’t worry, it only seems kinky the first time!

Not only is print the most reliable and honest medium to convey images, messages and ideas, print creates awareness, print sells and is the most environmental friendly way of communication known to man-kind.

Our industry has been king hit and the industry is shedding jobs at a very high rate and Canberra doesn’t know, don’t listen or don’t care. Last year Canberra’s response to the crisis was to cut their ad spend in half, saving taxpayers $ 100 million!

This makes no sense when, at the same time, 17 of the top 25 advertisers increased their ad spend.

It seems the only headline we as an industry make is when a printer hires Chinese immigrants and underpays them or when a Heidelberg press is featured in a Hollywood movie (Milk). Is it because Canberra and others can’t hear us?

And if they can hear us, is it because they are getting different and sometimes conflicting messages from the many organisations we have today in our fragmented industry?

Maybe we need to moan more, some may say less; however, the key has to be that we moan in concert so as to be truly heard. Drastic times calls for drastic measures so as to be heard.

Short of inviting a Cronulla star player to attend a Women in Print function, my call for 2009 would be one industry organisation, representing the total industry and backed by all 100,000-plus industry members.

The Print Media Association of Australia sounds like a fitting name … just to make sure we don’t upset anyone!