Do UK card printers have more to offer than overseas rivals?
Monday, December 9, 2013
Going abroad for Christmas has become commonplace, and not just for holidays. Much of the printing of charity cards for the festive season takes place in the UK, but more and more customers are being lured further afield by the promise, not of sun, but of cheap labour and, in some cases, more competitive printing costs.
The Charities Advisory Trust (CAT) does not source print abroad, but some organisations, especially supermarkets and other multiples that sell charity cards, do. China is the number-one destination. CAT, which runs Card Aid for around 200 charities including Alzheimer’s Research UK, the British Lung Foundation and the Actors’ Benevolent Fund, is adamant: it will not print its cards overseas (see Opinion, opposite). Other organisations, including Marks & Spencer, John Lewis, Tesco, Oxfam, the British Red Cross and the National Trust, were unavailable for comment, although Oxfam and the British Red Cross do highlight that their cards are printed in the UK.
CAT uses London-based printing businesses 1st Byte, for digital jobs, and PJ Print, for a typical medium-sized litho run of 10,000 cards. PJ Print commercial manager Mark Oram, whose company rolls out the cards on its six-colour Heidelberg Speedmaster 74, says: “It’s unfortunately becoming more common to look overseas for card printing work, but it’s by no means a given.”
Brits can be just as competitive, he maintains. “By making yourself more cost effective you pass on savings to customers. We sped up machines for creasing and folding. Meanwhile the desire to be eco-friendly is a great selling point; we use FSC-accredited papers and vegetable-based inks and such a solid guarantee of sustainability may not be so easy to achieve in some parts of the world.”
Sherwood Press produces cards for charities and retailers selling charity cards in the UK. But the Nottingham company has also followed the market over to China where it has a factory producing box sets. Chief executive Jeremy Bacon insists most of the UK’s charity Christmas cards are still produced here. His company, for example, produces 300m in the UK annually and 70m in China.
However, a lot of hand-made rigid box sets and hand-decorated cards are made in China because of the labour cost differential, he says. That differential, however, is closing dramatically because of China’s rapidly rising minimum wage. An unskilled worker can earn around £180 a month, but skilled printers command high salaries and enjoy a much higher standard of living, he says.
And then there’s electricity. In China this is very expensive – one of Sherwood Press’ biggest costs – and a huge hit for firms doing inline UV varnishing. Power cuts are also common, forcing schedule changes. Add to this the rising costs of raw materials across Asia – long gone are the days when mills dumped stock in China at half the cost they sold to the West, according to Bacon.
“Our philosophy is not west is best or vice versa, but to blend the best of east and west,” he says. “Combining low-cost labour, the positive can-do attitude of China and automated machinery with the fast turnaround times offered in the UK gives us the best of both worlds. But it remains a tough market and the 80-20 rule applies: 80% of the volume accounts for 20% of the value.”
Noble Fine Art owner David Noble is resigned to the situation: “It’s sad to see business leaving the UK, but what can you do? I’m not in favour of subsidies or giving UK printers a monopoly on charity cards. It’s almost impossible to isolate this as a case for special pleading when you compare it with other UK manufacturing industries, subject to the full and often crushing force of the market.”
The Great British Card Company also taps into the best of both worlds, making its name perhaps somewhat misleading. The business sources charity Christmas cards for the likes of the British Heart Foundation and NSPCC through to local hospices and multiples here and in China. It uses firms such as AlphaGraphics, Loxleys and Sherwood Press for charities, while retail packs for corner shops through to department stores mostly come from south-east Asia.
Sales director Chris Houfe, who is also president of the Greeting Card Association, says competitive costing of printing, foiling, embossing and collating makes China a good option and if severe price pressure dictates, he will shift more work out there. But, he points out, that it works both ways and if labour and other costs in Asia continue to rise, the situation could be reversed.
One of the hardest hits to take in the UK, he says, is neither kit nor labour costs, but that imposed by “our friends in the Royal Mail”. Meanwhile not every overseas option – however cost-effective – will out-compete the UK, he says questioning the quality of some eastern European printers. And great news in this season of goodwill is the printing of Christmas cards in general is up at his company from 25% of business four years ago to around 35% now.
“I do see work coming back. Our retail charity packs come with cardboard display units and we printed those in the UK rather than the Far East for the first time this year. Investing in kit improves competitiveness, but the real question is not so much the UK versus the East: if China becomes less competitive, businesses may move work to India and Pakistan, as they did in the textiles sector, to take advantage of even cheaper labour. That’s something we all need to consider,” he says.
OPINION: Using overseas printers costs us all more in the long run
Dame Hilary Blume, director, Charities Advisory Trust
I am committed to printing Christmas cards in the UK because I do not believe in exporting jobs if you can do the work over here. Apart from anything else, half the people we help as a charity are those without work, so I’m concerned to preserve as much employment as possible here in the UK.
But there are other reasons for keeping print in the UK: I can’t see the point of sending cargo ships halfway around the world and then campaigning against global warming. Similarly, why campaign against human rights abuses in other countries around the world only to support those same regimes by giving them trade in the form of print work for charity Christmas cards?
Fortunately, we have been very pleased this year with our two printers PJ Print and 1st Byte, both of which are based in London. They both offer good service and we have used them for some time. But, in recent years, I have found it increasingly hard to find card printers in the UK as often, sadly, they go out of business or decide to send more of their work overseas.
Spreading the cost
Many of the high-street retailers and supermarkets that produce charity cards meanwhile seem to print them in south-east Asia, which is not good. It may save those organisations money, but it costs us all as citizens as we have to support many of those people who are put out of jobs here. At the same time, it does little to help the provision of services in this country.
Meanwhile, all the time we are building up more foreign debt and suffering all the environmental consequences such as increased carbon footprints, which benefits few people.
And it should be noted that, those organisations that make a saving by printing abroad, do not pass on those savings to any of the charities by giving a larger share of the sale price of the Christmas cards.
READER REACTION: Can UK charity card p rinters compete with overseas rivals?
Lawrence Dalton, managing director, 1st Byte
“For short runs of charity Christmas cards I think the market is fairly protected and I can’t see too many people looking to eastern Europe or the Far East. But for larger runs of 10,000 or so, there’s perhaps more risk. We run anything from 50 to 2,000 cards off our Indigo 7600 and have done charity Christmas cards for the Prime Minister and Archbishop of Canterbury. It’s not our main business, but it is a good filler. It is also good to blog about and gives you a little USP.”
Kathy Woodward, chief executive, BPIF
“UK charities are very conscious of their corporate responsibility including the businesses they use as suppliers, so to hold their own in this area, printers must have a sound ethical audit track in materials, environmental impact and working conditions for the entire supply chain. Any adverse publicity could have an impact on their image and fund-raising ability so printers must be aware of this. The charity Christmas card market raises over £50m each year and is a key brand development vehicle for charities large and small.”
Mike Johnson, owner, Piccolo Press
“I think UK printers can compete, although more printing of Christmas cards, not just charity ones, is going abroad because of the cost. I know a small printer that last year took pre-orders from 54 companies; this year it’s just two and that’s down to the cost of postal rates among other things. People aren’t communicating like they used to, yet cards are the most powerful way of saying something about the art of communication and I can see a return to more personal communication being printed in the UK.”