Tough competition and tight trading margins batter CPI

A significant sales surge of Komori presses and sundry finishing equipment in the second half of the year proved a bright spot as the machinery division turned in a profit after some years of losses. The company reports that paper distribution was profitable but was significantly impacted by low prices within the industry, difficult market conditions and the competitive landscape. It maintains that increased production – mainly from Asia – coupled with a number of new entrants into the merchanting arena contributed to this competitive environment.

Paper prices fell during the year by 2.8 per cent despite strenuous attempts by merchants to push through price rises. The printing industry rebuffed the price rises by cutting back on volumes and whilst margin increases occurred during the initial periods following the price increase, these were offset by lower volumes and were ultimately lost when pricing returned to previous levels.

The prospects of the machinery division repeating its stellar performance, especially in its advance into the long perfecting market remain unclear, according to the company’s report to the stock exchange. However it claims they are working on a number of prosects that could result in yet another successful year for the division.

The machinery division was also hampered by the increasing difficulty of selling second hand kit offshore into the developing markets. However CPI sees opportunities in the digital finishing market and intends to open a retail style showroom to increase its presence in this market.

Other highlights of the year saw CPI successfully enter the New Zealand market with its ink products while continuing to increase sales revenue with it ink and blankets products.