Books: sick as a parrot or a golden goal?
Wednesday, May 30, 2007
Book printing is, to steal a phrase, a game of two halves. Last week's big news proved that point: while CPI revealed plans to close colour book specialist Bath Press, its chief executive Mike Taylor simultaneously invested to secure the future of Suffolk-based monochrome bookprinter Clowes.
CPI was keen to point out that the plant had lost more than £20m in the last five years. An operating margin in its last posted accounts, for the year to 31 March 2006, of -21.1%, is hugely unhealthy even for a poorly-performing print company. In fact, in the last PrintWeek Top 500, Bath Press was ranked 496th for its operating profit.
Colour book production made up around two-thirds of the firm’s revenues; but perhaps of all sectors in print this is the worst affected by overseas competition. Children’s books particularly, which have long lead-times and complex assembly requirements, are ideal fodder for placing in low-wage economies.
Chinese printer Hung Hing’s recent launch, at the London Book Fair, of its project to build a factory that will eventually employ 20,000 staff throws the difficulties for UK printers into perspective. Hung Hing is not alone – a visit to a printing fair in Hong Kong last month revealed the scary fact that in China, printers with a headcount of several hundred are considered small.
Mike Taylor, CPI UK chief executive, last week described the colour book printing market as a “disaster”, and said that even printers in Eastern Europe were having difficulty in keeping pace with the ever-lower cost of printing in the Far East. Other colour book printers have suffered. Butler & Tanner completed a refinancing deal this February that should put it on a firmer footing; but it posted an operating margin of -7.0% in its last filed accounts for 2005.
Faith in mono
On the other hand, Taylor’s decision to invest cash from his personal fortune in buying Clowes suggests faith that monochrome book printing is in a healthy state and worth investing in.
Although Clowes itself has had a tough time of late, other firms’ figures back this up, with margins that many would envy. PrintWeek’s latest Top 500 lists operating margin for Antony Rowe at 8.3%, Cox & Wyman at 11.0% and TJ International at 11.3%. Moreover, St Ives’ Clays facility, which has shot to fame in recent years for producing the Harry Potter books, is often seen as the jewel in the group’s crown.
Taylor says: “Monochrome book printing could be seen as having a better future than general commercial printing. In trade books – novels and so on – it’s the speed of turnaround where publishers need to replenish stocks sometimes in three or four days.
“Until they find a way to put China somewhere around the English Channel, monochrome books have a future in the UK.”
But in the tough game of book printing, there does appear to be a third period – let’s call it extra time. Digital printing is beginning to make small but noticeable inroads into the books arena.
Cromwell Press last week revealed that it has set up a digital printing arm, Cpod, based on Océ kit, but it is not the first to do so. Antony Rowe in Eastbourne, which is part of CPI, has a digital department running Xerox kit, while Butler & Tanner’s digital department has been running for several years.
Bob Hunt, the former Antony Rowe director who now heads up Cpod, says the move to digital is driven by cost savings for publishers.
“It’s pure economics,” he says. “Digital is making inroads in the costing model. As well as short runs, it’s now getting into longer runs too.”
Publishers, he explains, are changing their buying habits as a response to the availability of digital printing. Some are asking for first runs, which are typically longer, to be digitally produced so that there is no difference between a first run and follow-up editions.
Others are ordering books in quantities of 50 or 100 at a time, running ‘micro-inventories’ rather than storing piles of books that may not be sold for years to come.
Hunt argues that colour book printing still has a future in the UK. “The quality is so good now there’s no difference with offset. People who once would have laughed at digital now take it seriously.”
TJ International chief executive Angus Clark adds that digital revenues from short-run, rather than on-demand, printing account for around 20% of his firm’s turnover. “There’s no storage costs for the publishers so their risk is reduced,” he says.
Personalisation is also on the radar. Londoners will recently have seen bus advertising for Bobs Books, a service that produces hardback, high-quality books of photographs for weddings, from a factory in Switzerland.
If personalised digital books could secure a place in the public consciousness, that would surely be the sector’s equivalent of a last-minute golden goal.