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.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels 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. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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