It’s not just the virus that is closing down printers

The co-morbidities of print businesses are taking a toll

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Fespa 21 vaccine requirement
Fespa 2021 required proof of vaccination before entrance to the show Photo Nessan Cleary

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.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Indian Printer and Publisher’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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