Industry hit by rising paper prices, Canon conference hears

Industry hit by rising paper prices, Canon conference hears

UK printers have warned of rising paper prices, but say they are experiencing a welcome return of business from domestic publishers thanks to "rapid" advances in digital printing technology and current exchange rates.

Speaking at the Future Book Forum hosted by Canon at its Oce R&D centre in Poing, Munich, last week, Andy Vosper, deputy chief executive of UK printer TJ International, told The Bookseller material costs were on the rise. “So far the impact on exchange rates has been the biggest effect [of the Brexit vote]," he said. "The sterling against the dollar and euro has changed. We don’t know where it’s going to find its parity; we have yet to action Brexit so we don’t know yet. Our principle source of paper is in Europe, so yes [costs have gone up].”

Marianne Bushell, global procurement manager at Relx Group, Elsevier’s parent company, said the ripple effect of Brexit had seen one paper supplier put prices up twice in two months and that, in distribution, contractual terms are being introduced to guard against inflation. “Global distributors are now insisting on having clauses in the contract that protect them against fluctuation in exchange rates,” she said. “Some may previously have wanted protection in third world countries. Now, with sterling exchange rates, they want protection up to a certain percentage.”

Andy Vosper

Terence Dalton, chairman of Laversham Press, an independent, family-run printing company in Suffolk, said the depreciation of the pound was a challenge in an otherwise “buoyant” market. If production costs go up, he said these costs would have to be passed on to the customer who, more likely than not keeping to already “tight margins”, could take their business elsewhere.

“Costs of materials are going to go up, paper is going to go up,” agreed Rupert Smith, director at Halstan UK, adding: “We will have to pass it on to our customers but will struggle to do so.”

However, despite uncertainties in print and distribution generated by the plunging pound, some delegates said it is helping them to remain competitive in the global marketplace. According to UK printers attending the conference, there is already a trend in which printers are seeing business return home from abroad as a result of advances in “print on demand” (PoD) technology that is making printing in the UK more viable.

Peter Fisk

Oliver Makings, owner and managing director at Caligraving Ltd, said: “ In terms of lead times publishers are getting more and more efficient in many ways, they want [the books] tomorrow, and obviously the big problem shipping from China is its lead time. For a quick turnaround, and if there’s not much in it in terms of price, particularly with the Euro the way it is at the moment, and against China’s currency, that’s quite important. It’s proximity to market at the end of the day.

“We print for some big international American publishers, [because] we’ve got a relationship with Vicks [a printers and distributors] in upstate New York. The exchange rate when we set our relationship up [has changed drastically]. It’s obviously very, very good to print in the UK versus printing in America and then shipping it. It’s nice to see it back home.”

Many conference delegates, drawn from 23 countries worldwide, said “keeping pace with technology” was both the printing industry's greatest challenge and biggest growth opportunity. Vosper said, “The technology is changing very rapidly; even as you’re installing equipment better ideas come along.”

As Rupert Smith, director at Halstan UK, explained, traditional litho presses print books faster and are known to achieve higher quality "less grainy" results in comparison to digital (PoD or short run) presses. However, advances in digital technology are making headway every year in bridging this gap; and the negatives of litho include higher set-up costs (with the time of skilled workers needed to set up the plates), more waste, and the inability to vary data. Digital presses raise the average cost per book - because its rate of output is currently slower - but fewer staff are needed from a printers perspective, and, for publishers, there are lower warehousing costs and more opportunities for personalisation.

Vosper’s prediction for the future was “more books, fewer transactions” and Smith's "more consolidation". "[Digital presses] have come on massively in the last year year or two," said Smith. "And you don't have to have someone  doing the ink."

"In 10 years time will people still being buying litho presses? Maybe, maybe not. People are debating now 'do I buy another litho press or something that's digital'," said Smith.

Makings said a challenge for printers was knowing where and how to invest in digital production methods, with binary price points making it difficult for medium sized business. “I think you’re going to get a big dichotomy between people who can afford [presses like the inkjet, costing half a million pounds] and smaller companies that actually can do this kind of thing [use more basic £85,000 cut-sheet machines]. I think it’s going to be the medium sized printers that are going to struggle, who have got big overheads at big factories but they can’t afford that [the inkjet] and this is a bit entry level for them. It’s quite difficult.”

He added: “We’ve had the big meteoric crash. You don’t use the telephone directory anymore or have huge catalogues [...] I think we’ve had the fall out [from publishers making the move to digital], it’s just a matter of how the industry responds to that.”

The two-day Future Book Forum, designed to “shake up the game of publishing”, demo new kit and facilitate new partnerships, provided a platform for 280 publishers and book printers to come together to discuss the future of the publishing industry.