Poor economy squeezing bottom line

Reduced readership and ad revenue has led to the demise of a number of U.S. newspapers. Reduced business has led to a decrease in the amount of printed marketing materials. Reduced buying and inventory space has led to smaller print runs for books and magazines.

The printing industry has had to adjust to economic changes. Area print service shops continue to adapt business strategies to the current climate and shifting client needs.

With ongoing interest in reducing costs to stay afloat, companies have adjusted their printing practices. Everything associated with those costs is taken into consideration — in the printing realm that includes everything from type of paper to number of copies.

Standard newsprint paper costs have been going down at a steady rate, according to the Pix Newsprint Benchmark Indexes. For example, the metric ton rate of $718.01 on March 3 dropped to $664.76 on May 5.

“I just did a quote for a magazine that had a savings of over 15 percent from last year,´ said Ken Martin, owner of Martin Print Services, a print management and print broker company. “It’s primarily due to paper costs going down, but also because printers know they have to keep prices competitive.”

Lower-grade paper _ Nos. 4 and 5 as well as newsprint _ are in the category of those papers that are dropping in price. Higher-end and recycled paper are still high because of the manufacturing process, Martin explained.

“People want to be green, but they can’t bite the bullet to spend the extra money,” he added. “With prices coming down, however, interest is increasing.

“Ten to 15 percent is a lot of times the difference in price, depending on the size of a job,” he said, referring to the drop in lower-grade paper costs.

In response to print industry shifts, Eight Days A Week Imaging and Copy Center in Boulder is developing more of a business center concept, according to Sam Sussman, who owns the company with Cheryl, his wife.

The plan is to have Web and graphics area professionals available to customers on a walk-in basis.

“The printing industry is expected to expand because of new business startups,” he said, explaining the increase as a result of out-of-work employees starting their own companies. Sussman is also considering creating a cooperative that offers access to his company’s equipment as well as providing a place for people who know autoCAD and design to work with clients.

Eight Days A Week used digital output, which Sussman refers to as more environmentally friendly than the ink process of printing. Digital printing also makes smaller print runs cost-effective compared with ink-process printing that larger print runs to offset printer set-up costs.

An environmental advantage to digital printing is that it avoids film and chemicals used in the traditional offset printing process.

Since recycled paper is rougher and coarser, it doesn’t always run as well digitally as virgin paper, Sussman said, stressing that the statement doesn’t refer to all recycled paper.

“People assume recycled is always better for the environment,” he added. “It’s not always better when you take into account the cost to get the paper to the marketplace, manufacture it and the final cost of production.

“You’ve got to be sensible. For example, oversized paper can’t use recycled effectively. If it’s better, we do it. Appropriate use is key.”

Specialty paper costs have gone up by 10 percent to 20 percent, he explained, referring to oversized paper for trade shows and special events.

“Printing is in the business service industry so we see trends earlier,” he added “We entered the recession sooner than most and won’t leave as soon.

“I think we’ve already hit bottom because there seems to be more activity lately,” he said, referring to March as a turning point.

According to Lloyd Streit, chief executive and president of Signature Offset in Broomfield, “printers are embracing green but mainly embracing it in their ads.”

To more clearly define Signature Offset’s approach to green printing, the company created a separate Web site, www.definingsustainableprinting.com. The site details recycling from the point of its newsprint paper to its aluminum printing plates and soybean oil-based inks.

Signature Offset uses a cold web-printing process _ focusing on newspaper-, tabloid- and magazine-sized projects and specializing in newsprint and uncoated paper publications. The process is designed for use on printing presses that employ a long web of paper rather than individual sheets of paper.

All of the 30-pound newsprint paper the company uses is made from recycled post consumer waste. In some cases, it uses 100 percent recycled content.

“We don’t use digital process because the cost for impressions is still too expensive to be able to use on newsprint and be competitive,” Streit said.

Signature Offset’s profits have been affected by changes in the printing habits of newspapers that include reduced page count, reduced circulation and shrinking web width.

Streit says that the width of papers has gradually decreased from 14-inches across to about 11 inches _ predominantly changing over the last five years.

“It hurts our profit because we still use the same resources to do jobs.”

Combining that with the decrease in newspapers nationwide has led Signature Offset to adjust its business plan like other print-related companies have.

The company moved to lean manufacturing, which focuses on less staffing, less waste and leaner operation, three years ago.

“That means we’re working twice as much for less,” Streit said.

Other methods include looking for more government bids and working closer with vendors for better prices.

Streit has developed a presentation to deliver at an upcoming web offset meeting called “What if this is it?”

“Everyone has this idea of holding their breath until things get better but it’s people who can thrive in this market who will make it.

“How can we really recover from something as big as the demise of the auto industry?”

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