The ambiguity of how long the Covid-19 plague will continue remains. The lockdowns and safety precautions have meant disaster for many industries such as hospitality, travel, exhibition, entertainment, and retail. Apart from those employed and directly affected by these industries, printers who serve them have suffered significant collateral damage.
Savings and resilience work for a year and can, in most instances be stretched to overcome a pandemic that extends to 21 months. The survivors then see the mirage of a recovery in the new year. They look for signs of business resumption as hopeful and desperate exhibition organizers roll out their postponed plans. Eventually dashed by the Omicron variant in mid-December.
Common wisdom says the best-case scenario is that we will lose the first four months of 2022. More scientific wisdom points to another 18 months of vaccinations and boosters – hopefully, in that time, they will perhaps start trickling down to the many under-served geographies.
As Nessan Cleary writes in his new year round-up ‘A kind of hope’ published elsewhere in this issue – “The last two years have seen a significant drop in new press installations for most vendors. That, in turn, has led many press vendors to restructure and rethink their business models, with many placing greater emphasis on selling data services and remote diagnostic solutions with recurring licensing costs. This trend will continue as printers look to squeeze greater value out of their hardware.”
Printers everywhere are compelled to rethink their business models. As Indian printers approach the third year of the Covid-19 pandemic, at the end of January 2022 we hear stories of the harder decisions to close down presses. In some states, as many as 500 printers have closed shop, while others are cashing in on what their real estate assets can bring in, and moving to cheaper locations. There are incidents of printers selling almost brand new and immaculately maintained equipment at fire-sale prices. Good equipment is available at 40 and 50% discounts.
The demand for commercial print that was declining even in 2017 has plummeted in the past two years. The too slowly recovering Indian economy cannot sustain more than 200,000 printers running behind too little work. Customers who have already cut their print budgets are having a field day, even as raw material prices skyrocket. Book printing exporters are paying eight times earlier freight rates – without any certainty of when their cargo will reach its destination.
Printers in smaller cities and towns have become unviable as local demand has dried up. In bigger cities, veteran printers find it impossible to absorb the stress of running a print business where they see no future – and their next generation sees better opportunities. We hear of two dozen printers in a South Indian city calling it quits. Closing their premises, they have moved all the equipment to a collectively rented warehouse – from which they hope to sell their presses and other equipment.
Other more fortunate printers say that the pandemic has brought an evolutionary catharsis, in which only the fittest can survive. A culling of the unfit businesses in a hypercompetitive market. Those who borrowed and invested too much without the ability to implement and execute their plans.
They feel that closing up print businesses is not a bad thing but perhaps a shakeout that had to come in an industry where the entry cost is too low. And where modern efficiencies require skilled management and resources that are scarce. They see the weaknesses of poorly run print businesses as just so many festering co-morbidities – as likely to kill the patient as the virus of the pandemic itself.
Naresh Khanna editor@ippgroup.in
This is the editorial from the February print issue of Indian Printer and Publisher to be posted on 27 January 2022.
