The State of the UK Printing Industry

Tim Webb
Executive Director
PICON Ltd

　　UK industry today

　　The UK printing industry today comprises fewer than 10,000 operating businesses. Indeed some would put that figure as low as 5,000, but if one were to include all those businesses that print in some way, and those that have printing departments, the figure comes closer to 10,000.

　　This is a big fall from just ten years ago when UK government figures pointed to 18,000 businesses.  Some have closed because prepress has become part of what the printer or the customer does.  Elsewhere, finishing tasks are being brought in-house, reducing the requirement for bindery businesses.

　　The number of people employed has reduced from almost 200,000 to 80,000 in ten years.

　　The numbers are expected to shrink further as a result of the economic conditions.  Few printers make large profits because there are too many of them doing the same thing.  As a result prices are too low.

　　As many as 85% of printers have fewer than 20 employees,  with many of those having fewer than 10 staff.  Very few print businesses have operations outside the UK and not many have more than one factory.

　　Yet the UK printing industry is the second largest in Europe and very close to that of Germany in size.

　　The UK is the leading market for long perfecting sheetfed presses because British printers are quick to see the potential of a new idea and can be very flexible.
There is a 98% adoption of computer-to-plate working and widespread use of digital printing.

　　Big investments continue to be made:

　　News International has spent £650 million to print newspapers.
　　There are two brand new gravure printing sites.
　　Another large web offset plant was opened last year.

　　Market sectors

　　The main markets for UK printers are:

　　1. Advertising material of all types, including leaflets, brochures, posters, direct mail and advertising which provides the main sources of revenue for magazines and newspapers.

　　2. Information products such as books, forms and financial information in the form of utility and other types of bills.

　　3. Packaging, to include cartons, labels and plastic packaging.

　　Economic slowdown

　　These are tough times for the UK printer for a number of reasons.

　　First is the recession, which means that businesses are finding it very difficult to raise the finance to fund investments.  It means that print orders are reducing and those that remain have shorter run lengths.  Many businesses are closing.  This, however, is normal for a recession when the stronger businesses survive and weaker companies close down.

　　However, other factors are making the situation worse.  Litho printing is being challenged by digital printing.  There has been a dramatic drop in sales of B3 presses and because digital machines are easy to operate, some printing work is being produced by non-professional printers.

　　As well as ease of use, digital printing offers shorter print runs which are produced in less time, greater customisation or personalisation, and the quality of colour that digital can achieve is now a very close match to  most offset litho printing.

　　A further factor is the opportunity offered by electronic communications.  This started with television and radio, but today the internet, email and SMS. All are channels which take money from printers, even if they cannot eliminate print.

　　There is good evidence, for example, to show that print and the internet work side by side: the printed catalogue shows the customer what a dress will look like and the customer then buys it through the website.

　　Finally,  as a factor there is the growing concern about the environment.  Print is under attack by many because paper is still associated with the destruction of rain forests.  This is wrong, but paper is still a large consumer of energy and viewed with suspicion for this reason.  Print is also responsible for large amounts of wasted magazines and books which are never sold (even though this is the fault of publishers) and, more particularly, junk mail.

　　Environmental groups aim to reduce unnecessary print and paper usage.  The result of this is that many anticipate a steep decline in paper consumption per head from more than 200 kilos a head in the UK to perhaps half this amount in the course of the next decade.

　　We know that newspaper circulations are in decline.  We know that commuters on their train journeys will listen to a music player, fiddle with their mobile phones or watch a DVD, rather than read a printed book.  This is especially the case for the younger generation.

　　Responses to recession

　　What happens next?

　　We know from experience of previous recessions that times of economic stress accelerate change.  This is also the case in times of war, when technological developments can produce winning weapons or strategy.

　　The successful companies in this recession will be those that have a winning strategy and use the right technology.

　　In the recession of the 1980s, the winning companies were those that adopted four-colour litho presses.  The casualties were the remaining letterpress printers.
At the end of the 1980s, the winning strategy was to adopt PostScript and standard platform computers, especially Apple Macintoshes.  The prepress houses that remained loyal to cumbersome Scitex or Crosfield systems disappeared.

　　Prepress began to move into the printer.

　　At the end of the 1990s, the recession led to the complete emergence of computer-to-plate.  Before the millennium, CTP existed, but companies could doubt its effectiveness and its cost.  But after the recession, every printer has switched over to using it.

　　What is the winning technology this time?

　　Strategies for success

　　The future will belong to companies that can respond to their customers in a number of ways:

　　1. They help customers reduce the costs of using print.  If print is too expensive compared to websites or email, budgets will switch away from printing.

　　Printers must offer shorter print runs, use digital technology to reduce waste, produce work just-in-time, and cut down on inventory and therefore warehouse costs.  They will use web-to-print technology to reduce the administrative costs of ordering print and to give decision-making power to customers.

　　2. Winning companies will address environmental issues by using recycled paper or paper from certified resources, such as FSC.  They will use inks based on vegetable oils and will eliminate or reduce levels of isopropyl alcohol.  They will separate and recycle all the waste they generate.  They will measure and take action to reduce their carbon footprint.

　　3. They will offer customers more than just a print service.  This might include data manipulation, running a help desk or call centre for a customer, or offering design and distribution services.

　　Opportunities

　　We are not pessimistic about print.  We anticipate that printers who come through this economic period will be those that have included digital printing into their business, alongside offset litho, so they can offer very short runs as well as long runs.

　　The winners will also use web-to-print software tools.  This works in a number of ways. For some companies, web-to-print tools allow them to talk directly to customers who want business cards, small leaflets and posters.  Some companies will use it to strengthen ties to a customer by providing a very focused business service to cut down the costs of purchasing functional print.  Some will use it to reduce the time it takes to get a job from concept to delivery, again saving a customer money.

　　The final winning strategy is that the future belongs to printers who can demonstrate a sound environmental performance.

　　Another aspect of this economic crisis is a swing in all sectors towards local production and away from globalisation.  This is evident with food and clothing and we expect the same to be the case with print.

　　Reasons to be cheerful

　　There is optimism. Print remains the most attractive and effective medium for many applications that have used print for many years.  However, the trends described earlier mean that print can no longer take its leading role for granted.
More information products, for example, will shift to the internet, particularly where updating is important, such as changes in the parts used to make a machine, and therefore the service details.

　　For convenience, print will remain supreme, and for the consumer who wants to choose between different types of car to buy, or where to go on holiday, there is nothing better than print for selling the dream.