THE GROWTH

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THE GROWTH CHALLENGES IN THE GRAPHIC ARTS
INDUSTRY IN ASIA From MALAYSIA PRINTERS
ASSOCIATION A warm welcome to all FAGAT members
present here today. FAGAT is a very important
platform for all the Graphic Industry people in
Asia to discuss issues, which confront this
industry. We are here to prod our minds to seek
solutions and share in this knowledge. I am
deeply honored to be in front of this
distinguished audience to present some viewpoints
for us to think and ponder about. The one great
question every printer is asking today is the
health of the industry. Will it survive the
onslaught of the many problems, which plagues
us? My presentation today is to enlighten us on
the challenges our industry will face in the
years to come and the changes me must undertake.
The printing industry worldwide including our
member states is experiencing a phenomenal
transformation in the way we go about carrying
out our business. For the last 4 decades our
industry survived many technological changes to
which we adapted to very well. We replaced our
typesetters with PCs and Macs. Along came
imagesetters and we threw away our Graphic Arts
Cameras. The high-tech color scanner gave way to
simple tabletop scanners. Does this mean we have
to replace or throw away our 5 color and 7 color
offset presses, no certainly not, not in the
foreseeable future? This is evident everywhere.
The press manufacturers are still producing more
and more machines. The consumption of paper and
boards is still increasing year-by-year
worldwide. One wonders where are all these paper
being used?
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The Printing Industry has tied itself with the
huge presses, ink and paper for too long. We have
traditionally put information only on paper. But
the increasing cross-pollination of the various
Communication Media since the beginning of this
millennium is impacting on our business. These
new technologies will pose some challenges in the
way we carry out our day-to-day business. To meet
these challenges the graphics arts industry has
to rethink new strategies to have a share of the
media pie. I would like to highlight some of the
challenges facing us today? Shorter runs because
your customers want to market their products to a
much more precise target audience. How is it
going to impact on our huge investment on
presses? Lead times between orders taking to
supply is very short. To do this we are caught
between the devil and the deep blue sea. Do we
invest on more equipment, which is not going to
efficiently utilized. Customers do not want have
huge inventories by practicing JIT. This is bad
news because our multicolor offset presses thrive
on volume to meet the low price per sheet. A
growing demand for individualization by
consumers. Everyone wants a tailor made product.
Which conventional print technology is unable to
meet economically?
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Competition from other media. Do we compete with
it or do we harness it? Over capacity in the
print business as reported by many countries.
Small and medium size business are suffering.
Globalization to a certain extent has put price
pressures in certain mature economies. How do we
compete with the BRIC (Brazil, Russia, India,
China) economies on pricing? As printers we need
to understand these challenges. We need to take
the bull by the horn and have faith in
reinventing ourselves in securing our future
growth. We have to find solutions to address the
various issues and present the information to the
consumers in the best way possible. Today we are
seeing the emergence of new consumer behavior.
For instance the 80s generation penchant for
using communication technology in ways we cannot
even imagine. Young people today like to feel
connected constantly. They are not satisfied by
just looking at a static display of a printed
material like a newspaper or a magazine. They
want it to interact in some form and at an
instant. But new technology does not mean the
death of the old one. They said radio will
replace the newspaper it did not, TV will replace
radio, it is still loud and kicking and finally
Internet will kill all the above. Not really so.
The challenge we have to face today is not
workflow or production issues but how to produce
and distribute print effectively and efficiently.
For this we have to use all available forms in
communicating content. Our business model should
not only be able to use print, but also the
Internet or pod casting and off course mobile
telephony.
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In the increasing globalization of businesses,
networking becomes a key factor for survival. As
printers we need to connect with other
communication providers to enhance our market
position. For example as printers we cannot just
print and supply it to the customer. We need to
ask ourselves how we can add value to this
transaction. For instance can I distribute it for
my customer? Can I carry out a market feedback
survey for his promotional material, which you
printed? This adds value to the customer and for
you. As printers we have to extend our service
beyond putting ink on paper we need to become
mailing agents and database managers. The people
who keep our industry moving are the advertising,
publishing and marketing companies. They seem
more and more inclined to think that the print
media is an offline media and as I mentioned
earlier, a static display of information on
paper. As printers we need to change this
increasing mindset among our customers and
emphasize the effectiveness of print. Most of all
we need a paradigm shift in our mindset and
demonstrate that the print media can synergies
with other media. Marketers of information in
whatever medium of communication including the
print media need to have accurate feedback about
any marketing campaigns they undertake. In fact
their customers demand it of them. Advertising
campaigns not only need print to disseminate the
information but must be able to also assess the
effectiveness of such campaigns. Printers need to
look at new business models, which will help in
gathering of this information and also improve
their bottom line. VDP offers some solution but
personalized print alone is not enough it has to
be boxed in with the instant feedback from the
users this information.
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The market for VDP products is ever increasing.
They include banks, financial institutions,
insurance companies, automotive industry,
medical, education, casinos, travel, consumer
goods, service industries, technology, travel,
energy and Telcos, just to name a few. Printers
who have not or refuse to enter this arena of VDP
are doomed to fail in the near future. A recent
study in Japan showed some very interesting
facts. The last 10 years the Japanese economy is
showing a modest growth. The population for the
first time is showing negative growth, coupled
with this, there is a huge disparity between the
aged who are not so tech savvy and the young who
are new age kids. Although the economy is
rebounding the demographics should portray a slow
growth in the printing industry. But strangely
the per capita of paper consumption is growing.
Ink sales have reported increasing volume. These
are signs that show the printing industry is
alive and kicking. But the fact remains many
printing houses are under threat of closing down.
One reason given is that there is a lot off
printed products being dumped on Japanese shores,
but bear in mind the Japanese penchant for
quality. They will not compromise bad print for
cutthroat prices, so cheap imports are not the
reason for this growth. The forecast for the
printing industry in Japan is a whopping 65.5
billion euro by 2010. Who is meeting these
demands? It clearly shows that new technology is
at play here. One possibility is the use of
cross-media by some large companies in getting
information across to the consumer and print
medium will constitute one part of this
cross-media product. Now let me bore you with
some figures conducted in a global survey
conducted in 2006 which as printers we need to
take cognizance off.
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37 of the publishers said they would use the
emails and e-newsletters to advertise their
products. 50 of the graphic designers said
customers are doing their own DTP publishing
which posed a business challenge 60 of the
publishers said printing costs are very high. 42
said color jobs for use on digital printers are
increasing. 30 said jobs for color using offset
printing is decreasing. 56 said database
development as a sales opportunity. From the
above survey it is envisaged that the sector that
will be most affected by these changes in our
industry is the Commercial Printing sector.
Adopting VDP solutions will most benefit them.
VDP and digital printing is relatively a new
business proposition for printers. It is still in
its infancy, thus the potential for growth is
great. The trick to be successful in this
business is arming yourself with some new
experiences in marketing data. Printers must sell
themselves as total solution providers. They
should provide their clients the whole range of
cross-media services. One should not only print
but also be able to publish the job
electronically and create CD-ROMs etc.
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Conclusion Weather we like it or not Digital
Printing technology is fast changing the face of
the traditional commercial printing sector. From
initial customer inquiry, to prepress, printing,
collating and binding, digital solutions are
posing new challenges for us to meet. Web based
technology offering e-print services have changed
the way the print industries interfaces and
markets itself to the customer. Printed products
can now be ordered proof checked, printed and
distributed anywhere and any place around the
globe without the customer leaving his office.
The new online players have brought radical
changes to the way books are being printed. Gone
are the days where large warehouses are filled
full of books waiting to be distributed, which
may take weeks, months or even years to empty.
Today orders can be made for just one book to be
printed and delivered to your home within days.
Big corporations are also adopting new
strategies in their print buying. The key word is
Create Once and Publish Anywhere. In the 1980s
it was DTP 1990s saw web Publishing today
corporations are talking about Network
Publishing. Corporations expect publication
applications and processes to create and
re-purpose content anywhere, anytime to meet
specific information needs. For instance we can
create a brochure which can be printed, published
on a the web, e-mailed to anyone, adopted to
local language requirements etc.
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Every few years something radical happens which
changes completely the way we do things. These
are known as Killer Applications or killer Aps
for short. Digital Printing with VDP could be
considered as one of these Killer Aps, which is
bringing radical changes to the traditional
printing industry. It forces us to put on our
thinking caps and come up with new ideas and find
solutions. END