Thursday, July 14, 2005


Printer Consolidation

Printers are "consolidating" all of the time, and in some ways that slip under the radar screen of the press. Sometimes, owners just close and open as new businesses with someone else, without selling or buying another business. Others go bankrupt and start new. Yet others buy the "sales book" of a printer that is closing, and it's never noted as a consolidation. Only a few deals are big enough to make the news.

I bring this up because I saw a Denver Post article today about A.B. Hirschfeld Press Inc. of Denver. A few items interested me. "The proposed transaction calls for the merger of A.B. Hirschfeld, National Printing and Packaging Co., digital printer C&M Press LLC and printing software firm OSI6 LLC, all based in Denver," the article states. Ummm... wait a second... a traditional company merging with a digital firm and a printing software firm. This is not the consolidation of printing companies one typically thinks of. None of these companies are similar, and they bring different skills to the party (that doesn't mean they can easily integrate them, but they are on the right track in my mind).

The article degenerates, however, with the usual "There's massive over-capacity in the printing industry," quoting the owner. Yeah, like a single merger will affect industry capacity. So on one hand, this is a creative approach, but we're given the usual uncreative drivel at the end. The comment ignores that print's role has changed because of Internet competition, and yesterday's announcement by Fujitsu means that competition will be coming from other quarters as well. Overcapacity is meaningless. Marketable capacity is the only thing that matters, and has little to do with equipment, and that's hard to understand concept for some executives, even those who were profitable for years when people were complaining about capacity as well. (It's also funny to see the remark that digital printing is more profitable than traditional printing, which would make no sense, as digital printing has added to industry capacity, and should have the effect of depressing market prices even more).

Amidst the complaints about overcapacity, the company is planning to invest in China, according to the Rocky Mountain News version. That is a great move, and more printing companies should do it, but it's a reminder of yet another aspect of the capacity discussion. How do we measure it? Nowadays we have to measure it worldwide, that is, if measuring capacity even matters.


Yet another consolidation hit the news (or excuse me, Google News Alerts), this time in Midland, Michigan at Etheridge, a Consolidated Graphics (CGX) company. This one, however, was blamed on "faster presses." But finally, it's a story that talks about print demand, and how it's changed. This report should be understood as good news, about a company that's reorganizing and modernizing, and offering new services rather than becoming another Internet or (gasp) "overcapacity" victim.

I wonder what the final effect ends up being for the print broker when all these companies buy each other out ?
Full Color Printing
Eling M Orton
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