What stands out about the Indigo 20000 in terms of capabilities for digital packaging?
RO: I think what stands out about the Indigo technology, in general, is the one-shot process on the packaging presses, and the same on the label presses. That means all of the colours are built up on rotation on a blanket and transferred in one pass. With most print processes you have multiple passes for the colours and the material may actually be contorting or changing because of temperature or whatever. We transfer all of those colours in one pass.
Why is Pack Ready important for HP’s packaging interests?
RO: We found a way to combine HP ElectroInk and laminate it to a piece of material, without an adhesive, and achieve a really high bond. And by the way, achieve it instantaneously. We call it zero cure time.
What typically happens in flexible packaging whether you are laminating a water-based or solvent-free or solvent-based sheet, you have a wait time that can be anywhere from a day, a day and a half, all the way up to five days.
How does the 20000 address spot colours and how important is ElectroInk White?
RO: With the Indigo 20000, we had two stations of white ink feeding into one ink tank because there is so much white ink being utilized… As far as ElectroInk and spot colours, it is really no different than any other Indigo digital press model. Most customers will often run orange and or violet on say 20 or 15 percent of their jobs. The great majority runs are on a four-colour process and when there is a need for a specific spot colour we have the ability to mix that and so we can achieve 97 percent of the Pantone book…
The system also has a spectrophotometer – as do all of the Series 4 presses, 12000, 20000 and Indigo 30000 – and we leverage that to make sure we maintain consistency. Most of the time when we have flexo printers come in [to HP’s Atlanta facility] they are blown away by the capabilities… There are just things we can do with photographic images, highlights, drop shadows and things of that nature that are very hard for them to do in flexography.
Can the 20000 leverage HP’s Enhanced Productivity Mode, with CMY printing?
RO: I worked with the narrow-web series at the very first beta site of Enhanced Productivity Mode, going back to an older generation of presses, and 20000 is no different. From my point of view, it is probably a capability that our customers could leverage even more… When you compare three and four colours, it is a 33 percent productivity increase. It is significant and all Series 4 presses have it.
What impact has the Indigo 30000 press already made on the folding-carton sector?
RO: I did the beta-launch agreements on the 30000, so I am familiar with it… We seem to do really well in a couple of areas: health and beauty, and pharmaceutical, so a lot of cartons where you can get at least a 4-up on a B2 press sheet.
And we have also seen a lot of adoption in the speciality-card business, loyalty cards, financial cards. We have a number of customers who have added second units, but in the beginning our customers had to learn a lot. In many cases, these were brand-new customers who were getting their first digital press.
What growth does HP see in the packaging sector when it comes to digital printing?
RO: We typically look at print volumes and I can tell you they are growing rapidly… When you look at the statements that Alon Bar-Shany [VP and GM of HP Indigo] has made, our vision is that label and packaging will become about half of our business and we are on this quest to become a multiple-billion-dollar business unit.
Our investment is deep… and you will see us continue to expand. For instance, I never thought we would be at a point where we could do retortable packaging, which we have been able to achieve now on the Indigo 20000 with specialty coating. It is very demanding flexible packaging.
Our customers see this investment from HP. Our expectations around packaging are high and that goes for all of the packaging markets – corrugated, flexible packaging, folding carton.
Manroland Sheetfed, a subsidiary of privately owned UK engineering group Langley Holdings plc., has been a leader in the paperboard sector of printing for decades. With the growing focus on carton work, because of its stability relative to some eroding commercial markets, Springett spoke with PrintAction about the direction of this sector and its domination by sheetfed offset technologies.
How can commercial printers enter carton?
SS: I would suggest using caution is prudent, especially since the landscape is evolving through consolidation in the packaging segment. I can only speak to how I have seen this transition occur in the past and, at best, the migration to package printing from commercial is a gradual event. A commercial printer must consider their existing niche served and what aptitude and skill-sets they already have that can be put to good work in making a leap, or dipping their proverbial toes in the packaging arena.
Major and medium players in packaging are highly skilled and tooled. If a commercial printer is attempting to compete in the volume business, they need to retool their factory, areas like sheeting, structural engineering, die cutting, gluing, and die making is typically more foreign to commercial applications, at least by scale.
Are commercial printers focused on packaging growth?
SS: I believe a stronger concept in the years prior; the trend was always about complimenting, be it packaging or any number of additional services. We see commercial printers furthering their niches, not often in packaging. I have been amazed at how talented many of the independent commercial operations have been in entrenching themselves with their customers. The evolution of many commercial printers into marketing firms has been a more successful trend in my opinion.
The technology advances in IT, the ideology of print being a compliment versus the single primary export of a commercial printer, is intriguing. Many have evolved into a more savvy business model with multiple revenue streams. Couple this with the marriage of sheetfed offset and digital. Whereas digital has crept into what was considered traditional offset, the newest sheetfed offset technology is creeping into what was always regarded as short-run digital.
What is the complexion of today’s short-run carton market?
SS: The ideology of volume versus short run is almost dismissive in regards to larger packaging firms. Many of them, whether global, national or an independent viscerally defend the market space regardless of run specifics. The larger firms equip themselves to handle the shorter runs but often struggle with big business problems where some of the smaller independents shine in this arena. This is the space a smaller independent packaging house or a commercial printer can capitalize on.
What type of automation do you need to focus on short-run carton?
SS: It is less about the individual process of the equipment and more about the overall operation of a system. In today’s terms, it’s about transparent productivity. The ability to measure the performance of the asset, being a sheetfed offset press and determine how to optimize the performance... the ability to provide the information is less important compared to being able to disseminate it and help the printer improve productivity and fully utilize the asset.
What market activities are driving folding-carton work?
SS: Predominately food products for the folding-carton market, with increased demand for convenience-oriented products for the volume side of the business. Increased demand for bespoke-oriented products such as cosmetics and specialty products has caused the B1 format to see an increase in sales.
Are packaging press sales growing or is it more a decline in commercial press sales?
SS: When new offset high-performance equipment becomes operational, optioned and equipped to the highest automation level, I believe we will see a little more offset in the digital sphere. At the same token, new offset and new digital can do the work of two or three of its predecessors. By sheer economics, press sales will decline regardless; I favour the opinion that our market is far more variable in nature.
How far off is inkjet from making an impact on short-run carton?
SS: Speed is the Achilles’ heel of inkjet. In order for inkjet to gain a more mainstream focus, it will need to increase the sheets per hour and continue to economize the ink costs.
Mitchell Leiman joined Cimpress more than a year ago to lead the company’s global development. PrintAction spoke with Leiman, Vice President of Strategy and Corporate Development, to better understand Cimpress’ new operating structure and its powerful printing platform.
Why did Cimpress decentralize and how did this affect last year’s operating loss?
ML: The decentralization and reorganization was a really a no-brainer for us. We saw the benefits of these changes to allow us to be even more entrepreneurial, innovative, customer-focused, agile. Even though in the short term it impacted financial results we felt it was so much better for the company and our customers in the long run.
Another big factor that drove the reported loss, a bigger factor than restructuring, was our investments. We had historically high levels of investment in the business and that’s been a multi-year trend, because of the huge opportunities we see in the markets where we play... That was a big part of what led to the reported loss in our fiscal year 17.
Why was the acquisition of National Pen an important investment?
ML: National Pen [acquired for approximately US$218 million in December 2016] relates to our desire to accelerate efforts in promotional products. For many years, we have started selling more and more promotional products and it is a great opportunity for the mass customization concept to really take hold in how we approach the business, both from selling and manufacturing... But most of our investments are organic, essentially investing in the current operations.
Where has Cimpress made most of its organic investments recently?
ML: We continue to of ourselves as a technology company, whether it is on the frontend of our business, the selling, the Website, the experience of the customer in designing on the Website, whether it is in Vistaprint or some of our other brands… a lot of technology is facilitating the manufacturing of our goods. Windsor is really the crown jewel of our manufacturing and there is a tremendous amount of technology investment related to production and more recently software that drives our business... to specific machinery and automation. Technology is a big part of our investment.
We continue to invest in new business models and [infrastructure] in countries like Brazil, India, China and Japan, so this is another area of organic investment. We have investments in what we call Vistaprint Corporate, working with larger customers and helping them to set up dedicated Websites that have their own branding and templates preconfigured. And maybe the last area is in new products. The breadth of products that we are trying to play in is ever expanding. Our strength is the mass customization capabilities both in selling and helping customers design, as well as making transactions.
How is technology investment enhancing Cimpress’ customer experience?
ML: One example is, if you upload a picture, we are getting better and better at instantaneously telling you that maybe the picture isn’t of good enough quality. Or better yet, we will automatically just fix it for you and you may not even know it as a consumer... we want to have technology to make the customer experience that much better, as well as improve the efficiency of how we are able to do things.
Why is Cimpress still a unique company in the printing world after 20-plus years?
ML: The way we think about competition is not necessarily [with regard to] another big player like Cimpress. It is the thousands of smaller companies that are very focused on a particular customer segment or geography... There are a lot of great companies and certainly many have tried to integrate – and a lot with great successes – some of the things we do well. A concept like ganging, for example, was very innovative when we were first doing it and now it is more common practice. [Print] is a very competitive space and they push us hard.
What keeps us successful and unique is the decentralization that has allowed us to stay small as we get big. The benefit is that we are somewhat able to emulate those smaller companies in a way where we try to keep our businesses manageable and focused… On the other hand, we are able to leverage our scale and do business in a way that is really hard to replicate for all sorts of reasons.
One example is our mass customization platform and that really allows our businesses to have distinct identities to work very seamlessly together... There are ways when it is very advantageous for us to still operate as a single entity. Even if we are trying to fight off being too big of a fish now, we are a school of fish that swims together.
Scott Gray joined Mitchell Press in mid-2017 to help the historic web offset facility move toward digital printing, as the company installed a new Kodak NexPress ZX3300. Led by its third generation of family ownership, Mitchell Press, based in Burnaby, British Columbia, operates out of a 64,000-square-foot facility as the largest commercial heatset web printer in Western Canada and the Pacific Northwest, outputting an average of more than two billion printed pages per year for a range of clients.
PrintAction spoke with Gray, Vice President of Sales and Marketing, about the transformation of what has been a quiet Canadian printing power.
Why does Mitchell have a unique market position?
SG: I have only been here about a month now but I’ve always known Mitchell to be one of Canada’s leading high-quality heatset operations. The have a 16-page configuration, two full-size webs, 4/4, 5/5, and the 4/4 has a coater as well. They have been going after high-end publication work for the last, I will call it, 88 years.
They started out as a financial printer. Nine years ago was a big moment for them when they sold their old factory, which was actually an old cookie factory, kind of a disjointed building. They created a new purpose-built facility and then put in a brand new Komori 1000 at the time and that was basically setting them off on a brand new foot. The building is really large, with lots of room to move into.
At that time, there wasn’t a lot of competition in the Vancouver market. There was Teldon, which five years ago Mitchell ended up buying and they absorbed the cream of the crop of the staff and brought some of the presses over. And then just kept pushing in that direction.
They outlasted all of their competition, but the web market is reducing a little bit. Run lengths are getting a little bit smaller and these guys are really looking forward to what is the future of the company and they are not afraid to spend a little bit of money to do that.
Where is Mitchell investing for the future?
SG: They want to go in a completely new digital direction with the size of the company and they have other expansion plans down the road that we will reveal a little bit later. But immediately they have now built probably one of the coolest digital rooms that I have ever seen.
The prepress workflow is getting so buttoned down with these guys. They are doing a turnaround of 25,000 on web magazines in 24 to 48 hours. The are so slick from that point of view and so we want to take that mentality and put it into the digital world. So they have installed a Kodak NexPress ZX3300, a beautiful machine with amazing capabilities – oversized sheet, it does metallic gold, opaque whites, dimensional, and I think next quarter we are getting into the heavyweight substrate expansion kit so we will go up to 530 gsm. For digital it has a lot of horsepower.
How difficult will it be for a web offset shop to go digital?
SG: We are getting competitive at 3,000 runs on the web with how fast these guys are making ready and turning around jobs so it is not much of stretch of the imagination to [produce] a couple thousand digital. Now maybe the gap is a thousand copies between digital and web.
We can do advanced copies for our clients to go around and pitch advertising. They can check out new artwork. They can do variable data image covers and that is just strictly on the publication side, not to mention the extra at least 30 percent of possible business opportunity that rests with existing clients that we are not even touching.
What is your initial push at Mitchell?
SG: Right now it is digital… One of the reasons they brought me on is that I have a lot of experience with digital – digital storefronts. I am leading the sales team. I am not here to retrain anyone because they are all very seasoned. They know what they are doing, but I want to show them new opportunities and I can kind of lead by example with the digital stuff because I have of a lot of experience with it.
I have already brought in a few very cool, very high-level design projects that really push the limitations of the machines and it has knocked it out. So everybody has kind of caught a buzz on it and now they are looking to their existing client base.
How important are online storefronts for print?
SG: I think it is huge. I honestly think that is the future of print. We will be pushing that very quickly. We are going live with our Monarch update in a month and we are already putting together our storefront team and I believe that is going to be the next part of it. We will be doing both offset and digital through it.
I personally think it is the future of print. If the industry in five years is not doing 30, 40 percent of our work through storefronts then I will give my head a shake.
What are you most excited about by joining Mitchell?
SG: To me it is the ability to help rewrite an almost 90-year-old story. They have been very quiet and I can reintroduce them to design community. They have been really focused on the publication community and we have so much to offer for what people need, but they do not know who we are here.
I just really want to shine a light on Mitchell and give them the attention that they deserve. I am really excited about the growth potential and the fact that they have embraced this change.
Glatz Klischee investigated Esko’s LED exposure as early as 2010. Since then the trade shop has gained experience with several generations of inline UV exposure and worked with prototypes of the XPS Crystal 5080. “In our opinion, UV main and back exposure in one unit represents a milestone in flexographic plate making. It improves plate exposure quality and ensures extremely consistent flexographic plates,” said Manfred Schrattenthaler, Managing Director of Glatz Klischee.
Glatz Klischee has been working with the new XPS Crystal 5080 from Esko for about six months now. “Thanks to this technology, we now are able to supply our clients with standard screens [54 and 60-line], up to the absolute premium range with 250 lpi. We can deliver the best possible plate quality with the highest level of consistency and repeatability that we have not experienced to date,” said Schrattenthaler.
Established in 1931, Glatz started out in the stamping and engraving field. Sign making and plate making were added later. The third-generation family business has five locations. Since 1999, Glatz Klischee has been an independent company in the Glatz Group. At the Bregenz site, there are 40 employees. Glatz specializes in flexible packaging and corrugated cardboard in Austria, South Germany and Switzerland.
The concept is to have the press initiate a series of print jobs that are properly queued up by Heidelberg’s Prinect software, depending on ink layout down and imposition, and then run consistently without operator intervention. Ultimately, the technology platform can also leverage colour management tools to reach pre-specified Delta e levels and a tagging system in the press delivery. PrintAction spoke with Heidelberg’s Ray Fagan about Push to Stop and automation in the printing industry.
What is the state of automation in the printing industry?
RF: I would say in general print shops are behind other industries in automating their processes. There is a trend toward getting away from the craft of printing more toward the manufacturing of printing. And that is a bitter pill to swallow for a lot of printers, more so for the commercial companies than in packaging. Packaging companies have been in a manufacturing mindset for a longer period of time, because of the nature of what they print.
Are printers ready for Push to Stop?
RF: We are learning very quickly that most companies are not in a position to take advantage of Push to Stop automation. The press ends up waiting. There is a fellow who has joined Heidelberg by the name of Anthony Thirlby and he is head of Prinect now, driving some of these processes... He estimates 55 percent of the time a job is in a printing company is before it even gets to the CTP. It’s in estimating, job costing and prepress – 55 percent of the time before it is even plated and on the press. So if an average job time takes three days to get out the door, one and a half of those days is spent just getting the job ready to be plated.
How does Push to Stop look beyond just the printing component?
RF: Push to Stop is part of what we call the Smart Print Shop, which is more holistic in the approach, where Push to Stop is the print processing element of it. To have a Smart Print Shop, you need to think about how do I align my jobs so that I can truly manufacture at an acceptable operating equipment efficiency or an OEE number for a new press? How do I justify putting this piece of equipment on the floor?
What is Heidelberg’s answer for creating an OEE number for a capital investment?
RF: You should only think in terms of throughput and you should only measure, in our opinion, cost per thousand sheets. What is the cost of running a thousand sheets for my company?
Why has Heidelberg focused on cost-per-thousand-sheet manufacturing?
RF: We are launching a big data platform this year in a couple of satellite plants as a beta test. We are going to be collecting every single piece of information from the press and any other automation that is in front of, or behind, the press that can provide data. Then you can start to do a few things like intensify your colour management, streamline your stock purchasing by big data analysis. You can determine a lot to drive your cost per thousand sheets down. But it is not only based on capacity. If you can make every thousand sheets more profitable, a three-shift printer can become a two-shift printer and be more profitable even if they do not see an increase in print volumes coming.
What is big data telling you about print?
RF: There are so many decisions now where you can try to remove the emotional element and just focus on what is happening. It is interesting to see the look on a customer’s face when you tell them their overall operating efficiency [OEE] is 18 percent or 23 percent. They have these big pockets of unexplained time.
How common is it for printers to have an OEE number well below 40 percent?
RF: Most are below 40 percent for sure. And in fairness, a lot of people are getting hung up on overall operating efficiency. You can be the most efficient printer in the world but if you are a really short-run printer your [OEE] is not going to reflect how efficient you are just based on your total volume.
Why is Push to Stop a new operating philosophy for printing?
RF: I do not think anybody has ever gone from makeready to good sheet before without having a physical interference. To be able to process multiple jobs in sequence without interruption of a person has never been done before and now we have the capability to do it at a press level.
What is new I would have to say is the ability to queue up multiple jobs from the prepress department into the queue of the press, all ready to go.
Have you ever wondered what it looks like at the top of Mount Everest or at the bottom of the Grand Canyon? Well, Chris Harding and his colleagues can’t take you there, but thanks to their innovative work and the advancements of 3D printing, you can hold the natural wonders of the world in your hands.
Harding, an Associate Professor of geological and atmospheric sciences, is part of a research team at Iowa State University and together they have created TouchTerrain.
Essentially, TouchTerrain is a Web application that allows users to print 3D models of any place on Earth. So, instead of relying on a flat map or screen, instead of relying on 2D depictions of real terrain (like those lines which get closer together indicating a higher altitude), you can actually study 3D representations of mountains, canyons, the ocean floor and the Canadian Shield, among any geological feature, with a hands-on model.
In the TouchTerrain program, you just select a rectangular section on a map and enter in your 3D printer’s parameters (Harding and his team have used a Makerbot Replicator 2x and Flashforge Creator Pro). Then the server downloads the elevation and terrain data through Google Earth Engine and downloadable STL files of that area are created.
The project started in late 2014, Harding says, when his colleague in the department of geological and atmospheric sciences, Franek Hasiuk, got some experience working with the Makerbot Replicator 2x 3D printer in his lab and mentioned the idea casually.
“I think he said ‘wouldn’t it be cool if everybody could 3D print the landscape they live in and hold it in their hands?’” Harding says.
Harding and Hasiuk launched TouchTerrain with the help of Levi Barber, the IT wiz instrumental in the coding of the project and Alex Renner, a Ph.D. student in mechanical engineering. Harding says Renner was a “big help” in teaching him how to create 3D models reliably and efficiently on low-cost printers.
Since the program went public in mid-March, Harding says TouchTerrain had over 2000 3D terrain model downloads in the first two weeks. The team has also received a lot of positive feedback and interest from high school teachers, university professors, museum curators and geoscientists.
“They see value in using 3D-printed terrain models in an educational setting,” Harding says.
In addition to producing 3D models of the wonders of our world, Harding has also experimented with those of other worlds, such as the Moon and Mars. He recently received a request from a teacher at a school in California which caters to visually impaired students.
“Besides giving them the ability to touch the shape of the Grand Canyon,” Harding says. “I also hand created a 3D model for the hugely impressive Valles Marineris, which he printed and gave to his students to explore.”
The TouchTerrain team is currently in the process of expanding. The project is growing faster than they can keep up with and Harding says they have already begun to experience issues with scalability when many users are trying to access the system. They are hoping other programmers will provide feedback to improve the codebase and are searching for the funding required to bring a Web programmer in on the project.
“In addition to better scalability, we have a whole list of improvements we would like to see based on user requests,” Harding says.
TouchTerrain is an open source project hosted at GitHub which provides code for the Apache server run at Iowa State and a standalone version. You can access the TouchTerrain code at https://github.com/ChHarding/TouchTerrain_for_CAGEO or check out the server version in action at http://touchterrain.geol.iastate.edu/. Harding and his partners provide the service to educators and the general public free of charge.
“We hope that printing out these models and using them in a teaching context means that ideally more people become aware of 3D printing and how useful and affordable it can be,” Harding says.
The transformation of DCM is a story of powerful investors who have influenced Canada’s printing industry for a couple of decades, mergers and acquisitions, reorganizing a national footprint and investing in a unique service platform run by highly skilled employees. Leaning on the printing legacy of one of Canada’s largest and longest-surviving document producers, DCM is now positioning itself as a managed communications provider with leadership expertise in marketing services.
The company’s position pits it up against North America’s largest printers and technology suppliers who have a growing interest in the cash cow of corporate print consulting. This is driving DCM to build a breadth of printing services to, as the company’s rebranded homepage explains, become The Execution Engine for Business Communications.
Rounding out print
“The business has been in transition for many years, giving credit to prior management. They acquired, stitched together and moved the business forward in a lot of different ways,” says Michael Sifton, who has served as the Chief Executive Officer of DCM since April 2015. “That being said, what we did was amp up the rate of change in the last two to three years.”
DCM’s current evolution leverages a sticky printing infrastructure relied upon by some Canada’s largest financial institutions, from where most of its revenue is still generated, accounting for approximately $130 million in its most recent fiscal year. To increase the breadth of its printing capabilities, DCM has made key acquisitions like February’s share purchase of Thistle Printing and substantially all of the assets of Eclipse Colour & Imaging. The acquisitions came after Sifton spent two years rightsizing the company, which reduced DCM’s production footprint from nine facilities to just five, which the company today labels as Centres of Excellence – in Brampton (headquarters) and Mississauga, Ontario; Calgary, Alberta; Drummondville, Quebec; and Niles, Illinois.
“We are absolutely more focused than we were before and we are more optimized. One of our big initiatives is to become more united because we were disparate parts and not really working together with a mission,” says Sifton. “We are much closer to that today.”
DCM’s core capabilities include direct marketing, print services, labels and asset tracking, event tickets and gift cards, logistics and fulfillment, content and workflow management, data management and analytics, and regulatory communications. In addition to leveraging an executive team with vast M&A experience, DCM is heavily focused on firming up processes and systems to get the most out of what is now one of Canada’s largest and most diverse printing operations.
In January 2016, DCM revealed it had invested $6.7 million to acquire multiple new Xerox presses, including several top-tier iGen 5 machines. In late-2016, DCM completed an additional $2.1 million investment in its printing platform with an emphasis on label production, with upgrades and technology enhancements to systems in Brampton. As it made these platform investments, DCM also realized the consolidation of its facilities, including moving its Regina manufacturing and warehousing operations into its flagship Calgary facility, which had already absorbed the company’s Edmonton plant.
The Calgary location, which also holds significant sheetfed offset capabilities, most recently began to absorb the wide-format capabilities of DCM’s Mississauga plant following on the purchase of Eclipse located in Burlington, Ontario. Eclipse specializes in large-format and point-of-purchase printing with approximately 100 employees operating in an 80,000-square-foot facility. This $9.2 million acquisition turns DCM into one of the country’s most significant large- and grand-format printers. Eclipse generated approximately $21.3 million in revenues (unaudited) for the fiscal year ended November 30, 2016.
“They also have a growing packaging business, especially in specialty packaging, so we are quite happy about that,” says Greg Cochrane, who became DCM’s President in November 2016. “We see three growth areas: large format, packaging and labeling.”
The $6.1 million purchase of Thistle in Toronto provides DCM with commercial printing capabilities in a location that better aligns with its critical customer base in the financial heart of Canada. “Thistle is a steady, classic commercial printer. What that allows us to do here in Eastern Canada is to have, under one roof, our complete litho and sheetfed operation,” says Cochrane. “Currently, we are outsourcing a lot of that to second-party vendors, maybe some of our competitors, but this allows us to do more inside. We repatriate the business.” With approximately 65 employees operating in a 42,000-square-foot facility, Thistle generated $16.4 million in revenues (audited) for the fiscal year ended October 31, 2016.
As it closed the acquisitions of Thistle and Eclipse, DCM also arranged an increase under its senior revolving credit facility with a chartered bank by $10 million to up to $35 million. The move provides DCM with a total borrowing base of up to $72 million from $50 million, suggesting its investment-savvy executive team will continue to make acquisitions. “There are opportunities on the [printing] side of the spectrum that we need to tuck in and we think that they are trading at favourable multiples today,” says Sifton.
Leveraging growth experience
In DCM purchased Thistle from private equity firm VRG Capital Corp., perhaps best known for its financial backing of PLM Group, which was eventually purchased for $130 million by Transcontinental in 2007. Cochrane in 2011 became a Managing Partner of VRG Capital, which also holds an interest in DCM. The company publicly disclosed the Thistle purchase after receiving opinions on what was determined to be fair market value.
Cochrane actually began working with DCM in June 2016 as a Director of the company (stepping down from his board position in November to fulfill his mandate as President), along with VRG Managing Partner J.R. Kingsley Ward, who currently serves as DCM’s Chairman of the Board. It was also around this time, as the new DCM entity came into existence, that Sifton made his own sizable investment in the company, approximately 10 percent, along with Cochrane at a lesser amount.
“I bought in during the springtime last year in a fairly major way. Greg just recently took more shares as part of a transaction and is interested in making larger commitments to this company,” says Sifton. “So we are committed. We believe in its future and it is a company that is going to continue to go through transitions. There are going to be some bumps and grinds along the way but we think the prize is worth it.”
With the arrival Cochrane, Sifton shifted his CEO mandate with DCM to focus on financial and strategic initiatives. Cochrane meanwhile is putting his knowledge toward sales and business development. “I am a real execution type,” he says. “There is no such thing as better strategy just better execution.” At age 65, Cochrane provides a diverse background with decades of experience in marketing services, communications, event management and private equity investment.
After beginning his marketing career in product management with General Electric and then S.C. Johnson, Cochrane in 1981, along with his business partner, built out one of the largest Canadian event and conference companies, Mariposa Communications, which was sold in 1997 to Mosaic Group. In 2001, Cochrane became a lead investor in Pareto Corporation, a start-up marketing services business which became publicly listed in 2004, and where he remained a director until its sale to U.S.-based private equity firm Riverside Company in 2011 for $125 million.
Pareto would eventually shut its doors in late-2013, filing under Canada’s Companies’ Creditors Arrangement Act, which new owner Riverside described as a result of a sluggish economy and increased competition in the shopper marketing space. Also described as sales activation, the term shopper marketing is based on methods to connect brands, retailers and shoppers before, during and after a sale, which can include a plethora of print for direct marketing, experiential marketing, events, sampling programs, retail merchandising, in-store messaging and other incentives.
With operational responsibility for the direction of DCM, Cochrane views the company as holding two primary business arenas. “The first part is what I call the rinse-repeat. It is forms. It is long-term contracts it is RFPs with major [financial institutions] and insurance businesses,” he says, acknowledging a decline in the printing of transactional forms, although DCM is also entrenched with the same clients’ use of electronic options. “As that [print] is declining you better be best in class in terms of costing, on time, and we aren’t paying for any extras. So that part of the business we are really good at it. There are only a couple companies that can do it here in Canada.”
Cochrane refers to the other part of DCM business as customized on-demand, which relies on printing processes like digital, large-format, labels, packaging and direct mail – even sheeted with DCM’s new lithographic assets. “Those are the types of things that are growing… And the recent acquisitions we have made really bolster those areas for us,” he says. The customized on-demand part of DCM is where Cochrane’s marketing background comes into to play based on evolving client purchasing patterns.
“People who are around the room are not only in procurement but also marketing,” says Cochrane. “The [sales] conversation 10 years ago is totally different than it is today.” He explains the marketing executives of large clients are now involved in the complete process, often asking DCM to work directly with agencies on campaign details. “Yes, this is complex, but we are in the business of simplifying the complexity of your communications needs.”
Cochrane uses the term “to stand the client up” to describe DCM’s value-add approach, as he recalls one recent example: “With all of their requests it took 150,000 lines of code to get them up and running, so we could deliver materials on time.” In fact it was this same marketing executive who remarked on the true nature of DCM’s services. “The customer said, ‘Actually what you guys are is a managed services provider.’” With Cochrane’s experience and millions of dollars invested in new printing infrastructure, DCM is a formidable managed communications provider supported by marketing services potential and decades of process knowledge.
“I knew nothing about DATA when I was first approached about the opportunity a couple of years ago,” says Sifton. “The one thing that keeps coming back to me is just how great the folks are in this company and they are worth us putting a shoulder behind it to make it work.”
The Litho Chic acquisition compliments a year of capital-equipment investment by Deschamps. In May 2016, the printing company bought a new Xerox iGen5 press, as well as binding and finishing equipment for its Montreal plant. In December 2016, Deschamps Impression expanded its Québec City facility by almost 5,000 square feet. In January 2017, the company is installing a brand new 5-colour Heidelberg CX-102 press in its’ Quebec City facility.
Founded in 1987, Imprimerie Litho Chic specializes in commercial work with both offset and digital printing systems. Jean Bilodeau and Michel Leclerc of Litho Chic will continue to play key roles within the Deschamps Impression organization. On top of high-end commercial printing, Deschamps Impression focuses on providing clients with prepress services, security and digital printing, as well as pharmaceutical and cosmetic folding-carton and box printing, in addition to bindery and finishing services. PrintAction spoke with President Jean Deschamps about the company’s most recent acquisition.
What is the status of the acquisition?
JD: We are planning to complete the merger of the two companies by mid-March. We acquired them in December and we are going to move staff and part of the equipment in February. They are going to be consolidated in our main plant in Quebec City.
Was this a share purchase, rather than an asset purchase?
JD: Yes it was – We were looking to increase our sales volume and with this acquisition we have gained almost $5 million in additional sales which is very interesting.
Does Litho Chic provide a different sales base for you?
JD: I would say it is complimentary because a good portion of their customer base is close to Montreal rather than Quebec City where we are based but with our manufacturing site in Montreal we are able to integrate the additional volume across our platform. This is one of the major interests we had at that time because if they had exactly the same customer as us, we would not have bought the company of course.
What else attracted you to Litho Chic?
JD: The customer base, as I mentioned, as well as the craftsmen who were working in the facility. We are transferring more people who are very talented, people who have a lot of experience in the printing industry as there are not a lot of new people who are coming into our industry.
What Litho Chic assets are you taking in?
JD: We will be transferring mainly finishing equipment. The presses and prepress/platemaking equipment are going to be sold because we just bought a brand new Heidelberg CX Speedmaster [being installed at the time of the interview]. That press is going to increase our productivity by about 40 percent more than the old CDs that we had. We are going to be able to take all of Litho Chic’s $5 million in sales on this equipment.
Why were you attracted to Heidelberg’s CX press?
JD: It is a 40-inch CX with great new technology. It runs 16,500 sheets per hour easily with the Autoplate, auto-register and all of the new features we wanted for its’ efficiencies. Make readies take about 10 minutes compared to the 2005 press that we moved out, so we increased our productivity significantly with this press and we are going to be able to take in all of the additional sales that are coming from Litho Chic. We are going to add other shifts on the other presses, so with that we should easily cover the entire new customer base that we are getting.
Why did you recently put in a Xerox iGen 5?
JD: We bought the press in May 2016 and it was installed in our digital facility which is part of our manufacturing site in Montreal. The press fills a short run gap and has incredible flexibility with its 14 X 26 format as well as a print finish almost identical to offset technology.
Will the CX be used more for packaging?
JD: We are moving forward also in the packaging industry. We are doing a lot of packaging, a lot of gluing, inside of our facility in Quebec City and that was part of the purpose of buying that press. Now we have three five-colour CDs that are fully equipped. The oldest press that we now run is a 2010 and our equipment, all Heidelberg, runs right up to our new 2017.
When did you start focusing on pharmaceutical and cosmetic folding-carton printing?
JD: It is relatively new – I would say maybe four or five years now and we are increasing our market share steadily through our qualified and knowledgeable sales force. We hope to make an acquisition in this market segment within the next two years.
Why does Deschamps Impression have a significant position in security printing?
JD: We are positioned as one of the oldest family-owned security printing companies in Canada, with 90 years this year. We do birth certificates, lottery games, gift certificates, as well as manufacture cheques. We are one of only two printers with a federal security classification. Security printing is the foundation of our company as we only began commercial printing in the 1980s. We do a lot of security documents that are produced for different countries as well as in Canada.
When did you take over the company’s leadership?
JD: I am the third generation and we have owned the company for 35 years now. I took over in 1995 as the President. But we took over the company, by acquiring our uncles’ shares, with my two brothers and my father and I, in 1980 which was when the third generation bought the company.
How significant was this acquisition compared to other moves?
JD: This is the seventh or eighth acquisition that we have made since the third generation bought the company. When we bought the company in 1980 we were doing about $2 million in sales. Now we are budgeting for $34 million sales next year. Every acquisition we have made was strategic, either to gain expertise in a given market or to grow our sales.
Why is Deschamps Impression a unique printing company in the region?
JD: We are the only one doing packaging, security printing and we also do a lot of commercial printing, of course. We have a unique digital printing facility in Montreal. We completely finish about 95 percent of what we print. We manufacture in our facility in Montreal and Quebec City, so we are completely unique. We are one of the largest independent printers in the province of Quebec. We are also the only printer with a complete mirror plant which allows us to guarantee continuous service in case of a force majeure.
Why are you so confident in the future based on all of the investment made over the past year?
JD: We are very confident in the future and we will make other acquisitions as I said before. This has been part of our growth strategy and we are going to make additional acquisitions in the future.
We are already in the process of talking with other printers who are more in the packaging market, as well as commercial printing, in the Montreal region. We are a 90-year-old company and we are looking forward to going over 100 years.
On the top floor of ICON Digital Productions’ 90,000- square-foot manufacturing facility, tucked into a dimmed backroom, three technicians sit in front of a dozen screens grouped together on the wall like the Network Operations Centre of a cable news network. They are monitoring some of the highest profile static print and dynamic digital signs controlled by ICON’s newly minted Media division, including all the visuals hanging in Toronto’s Dundas Square and way-finding screens directing passengers at Pearson Airport.
Responsible for thousands of digital signs across Canada for Blue Chip clients like Shoppers Drug Mart, ICON Media illustrates the reach behind one of the country’s most unique visual communications companies. Designed to deploy national signage networks by procuring all of the necessary hardware, developing business plans and ultimately managing ever-changing content for clients, ICON Media is well-positioned to take advantage of an evolving wireless world. It provides the company with an irresistible vehicle for C-suite strategy discussions with clients. The bedrock of the parent company, however, is formed by ICON Visual with one of Canada’s most powerful technological infrastructures for large-format imaging.
ICON Visual dominates the company’s Markham, Ontario, facility, which any grizzled graphics pro would recognize by its curved-glass façade as the former home of Apple Canada. This division generates more than half of the parent company’s annual revenue, which in its most recent fiscal year amounted to just under $40 million, by pumping out static display graphics with print qualities demanded by the likes of Fortune 500 cosmetic and fragrance clients, Hudson’s Bay Company and Maple Leaf Sports and Entertainment.
ICON Print is the third pillar of the company’s All Things Visual strategy, developed through a divisional rebrand in December 2016. After years of outsourcing the production of offset-print jobs for its Blue Chip clients, ICON in January acquired Toronto Trade Printing, bringing decades of 40-inch-offset expertise in-house. The move creates a multifaceted communications manufacturing company powered by ICON Media, ICON Visual and ICON Print.
Last year alone, ICON oversaw the printing of more than 20-million direct-mail pieces in addition to a range of offset-produced marketing collateral. The company’s executive team has spent the past several months looking at both commercial and trade printing operations to purchase in the Greater Toronto Area. “We look at print not so much as old technology. We look at it as just another communications medium. In fact, our numbers tell us there is a lot of growth in print still,” says Juan Lau, President of ICON Digital, who co-founded the company in 1995 with Peter Evans and Peter Yeung. “The last three or four years we kept looking at our financial statements and, ironically, the fastest growing service sector was commercial printing – and we were not even trying.”
Without a direct need to acquire book of business from a commercial shop, which is the primary M&A driver in today’s printing market, ICON’s executive team was focused on finding the best lithographic-manufacturing fit for its existing AAA client base. Lau explains his priority was to purchase a well-established printer to immediately provide the offset knowledge ICON lacks after two decades of building a roll-fed digital printing operation.
Approximately 80 percent of what ICON Visual now prints is produced with Durst roll-fed machines. Lau describes this as a key differentiator for ICON because its production has been built around a square-metre pricing model, driven as much by finishing and fabrication as by print production. “From a pricing model we are able to get more yield [using] rolls – just a pricing thing. We can get that buttoned down pretty quick. Printers getting into our space still go off the rate-card mentality,” says Lau, describing what he sees as traditional offset pricing based on number of sheets produced.
“We know a lot of commercial printers are trying to get into our space now,” says Lau. “To get into our line of work, they are going to blow their minds out on the finishing end… anyone can print, but it is the finishing that really makes or breaks a project.” Most commercial printers getting into large-format imaging also turn to flatbed machines, continuing to focus on cost-per-sheet pricing models.
Lau explains he never set out to build ICON as a traditional printing operation when the partners founded the company. In 1995, the Internet had not yet penetrated the minds of most people, fax machines and phones were the dominate business tools of the day, and modems were limited to speeds of under 20k. Still, Lau wanted the company name to hold the word digital, as well as production, because he initially wanted to start a video-production company. The key word ICON came to him one day when a radio host referred to Madonna or Michael Jackson, he cannot recall which, as the Icon of Pop.
Prior to opening ICON, Lau was running a photo-enlargement company producing monochrome engineering drawings and architectural blueprints, generating slim margins, pennies per sheet. Lau describes his large-format eureka moment arriving in the early 1990s after seeing new colour imaging technologies at a tradeshow: “The idea of taking a file and outputting larger-than-life graphics on just about any surface, whether it is vinyl or textiles, or what have you, nobody was really doing it.”
ICON’s first large-format machine was a Xerox electrostatic printer and, Lau explains, he and Evans decided to put a stake in the ground as a new type of printing operation. “We printed on sheets alright, but we printed it to transfer media and that allowed us to, with lamination, transfer it directly onto any substrate.”
The technology was slow, outputting two or three posters per hour, and not a realistic investment choice for offset-based commercial printers. Lau explains he was driven to own the market that ICON would serve, akin to McDonalds being synonymous with burgers, Coke with soda, and Rolex with watches. Advertising agencies were immediately drawn to the new output possibilities ICON could provide with one-off large-format printing, even if they would often turn to offset or screen technologies for longer runs. “We started to establish a name in the business to do mockups, ideas, innovative stuff,” says Lau, noting ICON initially produced a lot of tradeshow graphics ideal for one-offs.
“What we were bringing on was really, by today’s standards, considered disruptive technology,” Lau says. “We didn’t know it at the time, but I think we were disruptors.” He explains it took about a decade after ICON’s founding for large-format imaging technologies, shifting from heavy solvents to UV, to evolve into a viable printing process for new entrants. “We went through a metamorphosis ourselves around 2005,” Lau says. “A key turning point in our company because it allowed me to do what I do best and that is go downstairs and take care of the operations, because our sales had never declined since 2005.”
Lau was trained as a programmer and holds great affinity for taking a process-minded approach to business. He felt ICON’s challenge was not about topline sales and he began to search for more efficiencies in the facility. “Once I got my hands on the operations side, the process and all of that – [we previously had the] same level of sales, $10 million, for a while – our bottom line increased tremendously.”
ICON brought on a new customized ERP system, internally branded as Cyrious, and a much-needed scheduling system for what had become a very busy large-format shop. ICON also brought in a new Chief Financial Officer, Alex Christopoulos, who Lau credits with greatly improving cash flow and the company’s overall financial health.
Lau describes the years from 2005 to 2008 as a “pivotal time” for ICON as he and Evans also decided to stop producing trade work for other printers and instead sell direct into the commercial market. “Part of the improvement on our bottom line was we made a conscious decision to shift and go after end-user markets,” explains Lau. “If we look back right now, we could have a few chuckles over that. It was one of the best decisions we could have made.”
Around the same time, ICON’s future would be influenced by the arrival of significant developments in large-format digital imaging technologies with a new wave of UV-based inkjet systems. ICON threw out all of its older-generation, heavy-solvent inefficiencies and made significant investments in UV technology, which Lau also credits with improving the company’s bottom line. ICON’s attention to the bottom line through the latter half of the decade would soon prove critical as The Great Recession of 2008 fast approached, all but strangling print sales for months.
A year before the printing industry plunged into the throes of frozen marketing budgets, Lau points to the significance of another technological marvel on ICON’s future. “2007 was a pivotal year from a technology standpoint, because when the iPhone came out [it] launched wireless technology in my opinion,” he says. “With all of the apps, [Apple] launched a whole slew of development in wireless technology.”
The economic ecosystem that quickly developed around wireless technologies would serve as a catalyst for the growth in screen-based digital signage. Lau explains wireless technologies broke down barriers that had been fortified for years by the need to run so much cable and obtrusive hardware. Less than two years after the arrival of Apple’s iPhone, ICON purchased a two-person AV company called Gridcast in 2009, when digital signage was still very much in its infancy. ICON had previously worked with Gridcast on a project for the Bank of Montreal, which wanted to integrate a digital projection within a large banner with a cutout. “It went really well and that was another eureka moment with Gridcast,” recalls Lau, describing ICON’s first project to integrate both print and digital mediums.
“Gridcast was very AV-oriented – hang-and-bang hardware. We saw very quickly in the first year that the model wasn’t really going to be a sustainable model,” says Lau. “Not only did we develop it by feeding it through ICON’s customer base, we actually changed [it] into a consulting model.”
The Gridcast division, rebranded in December 2016 as ICON Media, has been a significant driver for the company. “Our business in Media is an annuity. We will charge you a three-year management deal,” says Christopoulos, as an example of how the company can work with a client to finance a network of in-store screens, while ICON is truly interested in ongoing content management services.
Christopoulos explains the company, to a much lesser extent, hopes to take the same approach with some of ICON Visual’s work, where they might provide a client with a free banner stand with a commitment to print work to cover it – ideally, changing out the print regularly – over the next several months. With The Bay, ICON Visual is also starting to print on magnetic sheets that can be applied to painted walls, speaking to the division’s growing attention on developing repeatable visual systems with clients. The continuing innovation in both ICON Visual and Media have developed a strong reputation south of the border, where the company now produces around seven percent of its work.
“[It isn’t] so much because we are a better printer. They have local guys down there. It was actually our Media division because they are a lot more proactive when it comes to new innovations,” says Lau. “Because they want to do new things with digital, they are very open-minded to talk about the other print things we offer. So that is how we have been using digital media, more as a way to penetrate organizations from the top down, as opposed to starting with procurement and working our way up.” ICON Media has been using Virtual Reality for almost two years to show clients, like Sport Chek’s CMO for example, what their stores will look like with large-format print.
As ICON Print is developed, the company plans to leverage strong C-Suite relationships to drive work onto litho presses. In fact, Lau envisions an emerging media procurement approach that will benefit the rebranded position of ICON’s three divisions: “I am hoping as more Millennials get into positions of power and decision-making, they are going to say, ‘Why do we need a separate print budget. This is a media budget. We need to line up all of our marketing together.’ I think those budgets are going to change. We are kind of placing a little bit of a bet that way.”
Under ICON’s new multifaceted media vision, Lau explains it is important to hold a true offset-printing presence beyond outsourcing. “We have only touched the surface of the excitement the Media division is going bring,” says Lau. “It is huge. The ICON rebranding of All Things Visual is going to take us to the next level.”
In July 2013, Ricoh made an initial strategic investment in Avanti as the MIS developer was preparing to launch its new generation Avanti Slingshot solution, which was released in the fall of that year at Graph Expo. One of the most-advanced MIS products in today’s print market, Avanti’s new Slingshot platform was built around a completely new coding infrastructure and the MIS sector’s highest level of JDF certification for automation.
With the full acquisition by a world-imaging giant in Ricoh, Avanti now holds the potential to become a true global power by leveraging Avanti Slingshot as an MIS newly built for today’s multifaceted business of print. PrintAction spoke with Bolan just days after the Ricoh purchase for his take on what the future holds for one of Canada’s most dynamic software developers for printing.
What attracted Ricoh to acquire Avanti?
PB: I think Avanti Slingshot is a big attraction. We have the best MIS system in North America, if not the world. From Ricoh’s standpoint, it acquired has MarcomCentral, which they bought just fully about two years ago... So they have the Web-to-print piece and now they have the MIS piece. They already have the production workflow piece, which is their TotalFlow product, so they have a complete workflow for a printer. I think it is a brilliant strategy on their part.
Why is Slingshot an outstanding product?
PB: The biggest thing is that the market has changed. Most MIS systems, including our legacy product Avanti Classic, were written 20-plus years ago. Back then offset was the primary focus. There was no or very little digital. The market has changed to where most of our customers are working in multiple lines of business. They offer digital, offset, large-format print, mail, fulfillment, data-management and even Web services for their customers.
Most older systems do not handle those multiple lines of business. Meanwhile, Slingshot was written from the ground up to do just that. Number two is that Avanti Slingshot can be run on premise or in the cloud. And number three, Slingshot was written to be an open platform.
How critical is Avanti Slingshot’s high level of JDF certification?
PB: It opens a lot of doors. It is a key requirement for printers replacing an older MIS. They want connectivity. They want those islands of automation connected together and so absolutely it is definitely paying off.
What allows Avanti to keep pushing MIS?
PB: We have the experts on staff. You need an experienced team of product managers and implementation specialists, who are entrenched in MIS every day, to guide the product development process. We also have a strategic partners program of 10 or more customers who we bounce ideas off of.
How much has your team grown since Slingshot launched?
PB: Since Avanti Slingshot launched in 2013, we have more than doubled and maybe even a little closer to tripled – Definitely more than doubled.
How much business has Slingshot generated for Avanti?
PB: It drives a lot of the revenue for Avanti and, last year [ended August 31], we had a record year… We still have a really solid support base on Avanti Classic and continue to offer support and provide enhancements for Classic. We are up to around 100 Avanti Slingshot installs now.
How will Avanti operate following Ricoh’s acquisition?
PB: It’s really business as usual. There are no staff changes planned, so the great thing for customers is that they will still deal with the same people that they have grown to count on. I am staying. Stephen is staying, everyone is staying. I am sure that one of the reasons Ricoh acquired us is because of the subject-matter expertise of our team. Our team literally has hundreds of years of collective knowledge in MIS and it is impossible to replace.
How will this Avanti’s global position?
PB: This is one of the reasons we started discussions originally with Ricoh. They made it clear, from the initial investment three years ago, that they wanted our product to be a global product and that is exciting for us.
He has spent more than 40 years in the printing and publishing industries and is seen as one of the printing world’s leading technological pundits, producing hundreds of articles for publications from North America and Europe to the Middle East, Asia and Australia. Romano is the author of over 44 books, with a vast majority focusing on the arrival of digital printing. He continues to teach courses at RIT and other universities and works with students on unique research projects.
The title of Romano’s DIA keynote, Digital Printing, From Good Enough to Nanography, describes one of the most pressing issues of technology investment on the minds of printers across North America. The following excerpts from Romano’s speech describe the potential disruption of inkjet printing on the offset world.
Wrongly focused on page impressions
Frank Romano: The way they measure the output from these machines is page impressions. If you reduce everything to just a page, you have denigrated it – you have insulted it – because a page has no value. When the page is in a brochure it has value. When a page is in a book it has value… They are not pages, they are parts of a product and that product has value. And if we keep making that a page, we reduce the value in the product and that is an issue.
Too many digital sheet sizes today
FR: Let’s get rid of all of these stupid sizes. We cannot deal with every different sheet size you can imagine. I’m sorry, the paper companies are not going to support you – they can’t anymore. They do not have the resources. They do not even have the warehouse space.
Digital must move beyond CMYK
FR: The problem is that the majority of these [inkjet and digital] machines are CMYK and yet we all know that we have to handle brand colours – Pantone colours… That is one of the reasons why Indigo sells so well. HP has done a very good job because of the fact that you can match almost every Pantone colour, every brand colour. That is why they are so dominant in the label market.
It is just a matter of time, but the problem is without the brand colours they are not going to get into the packaging market… And, by the way, telling me you can do 80 percent of the Pantone colours with CMYK [is] not an argument.
A future in water-based UV inking
FR: I think the next big movement has to be water-based UV. UV is really a key system because it can print on almost anything. It is impervious to the weather. That is going to be a key technology.
Printing beyond paper
FR: The next generation is going to print on new kinds of substrates. It is going to go way beyond paper... The home decor market, make the pattern of your sofa match your wall paper, if you so desire. Make your windows look like Tiffany glass. You can do that now very easily with wide-format inkjet.
Offset and inkjet partnerships like Komori and Landa
FR: What Komori is doing not only with Landa but with Konica and others… Mr. Komori is very shrewd and has created partnerships with other companies to build the mechanism as they build the digital printer… what Heidelberg is doing right now with Fuji. You are going to see a lot more of that as the offset companies try to figure out how to keep some of their business.
By the way, when you buy a Landa machine, the base is shipped from Japan and the printing part is shipped from Israel and then they put it together in your plant. It is going to be very interesting to see how that works out.
Importance of page-wide print heads
FR: The other big change has been single-pass inkjet, instead of having the head move back and forth. Now that was pioneered by HP with a wide-format roll-fed machine... 40 inches wide by 500 feet a minute, CMYK, can’t beat it and it is selling very well worldwide.
Oce is doing the same thing with their roll-fed machines and others. Impika has been down that road and then Xerox acquired it and has improved the product line significantly.
Cost of new digital machines
FR: The thing that bothers me more than anything else is that we are a capital-intensive business and these machines are not cheap anymore.
[Technology suppliers] figure we all have money and yet that is one of my issues – we don’t. If you could get the machine at a reasonable price, we could then build a business and buy more machines, and buy more consumables… But right now I think they have priced them a little bit too high.
MGI Digital Technology invests approximately 20 percent of its annual sales back into research and development.This astonishing number speaks to the company’s origins just outside of Paris, France, and why it has raised the bar amid what are now some of the industry’s mostpowerful technology suppliers driving the growth of digital printing.
PrintAction spoke with Kevin Abergel, Vice President of Sales and Marketing at MGI USA, about the company’s mantra of innovation.
How was MGI founded?
Basically it was 1982 when my uncle was fresh out of the military where he had worked on anti-aircraft missile technology and he had learned a lot when it was still really early days for computers. When you look back further, actually, my grandfather was an offset pressman his whole life and on weekends in the summer his three sons all went into that environment to make some extra money. The three brothers who created MGI went into my grandfather’s shop and really learned the business from a traditional standpoint, which is why we have always had an affinity for commercial printers, because basically it is our bloodline – it is where we come from.
Has invention always been in your family?
My great grandfather, on my mother’s side, actually has the first patent for the first pneumatic feeder – 1925 or 1927 – for an offset press and it is up in our offices. We have a very strong and rich history in printing that runs through the Abergel veins. The first products MGI came out with were not necessarily in the print industry. They were some of the first computer programs for accounting, also for hospitals, big old floppy disks. That is really where we got started and then in 1991 we developed our first press – with a three-man team that developed a roll of basically Bristol paper that was being printed on digitally with a cutter just making business cards. It was called the Mastercard.
And then the next generation of Mastercard all of a sudden it went from one colour to two colours to four colours, while also going from a business-card format width to 8 ½ x 11, then 12 x 18, and then we were doing plastics. We have really gone through 13 or 14 generations of engines in our history on the digital press side. That is really how we built up the business from nothing to a business today with a market-cap above 200 million Euros. And now we have partners like Konica Minolta, which really raised the profile higher.
What is the Konica and MGI relationship?
The Konica Minolta and MGI relationship goes back 20 years actually… The base MGI business model has been to use initial Konica technology, whether it is inkjet heads or toner-based print engines, and sup-up those engines. Two years ago we really started to get a closer relationship when Konica Minolta invested 10 percent into MGI – we are a publically listed company – and as a result of that we developed a smaller version of the varnish and iFOIL, called the JETvarnish 3DS, exclusively for their sales network.
Because of the success that we had in that first year of bringing this product to market, Konica was now wanting to distribute the entire MGI portfolio and it was at that point in time that they went from 10 percent to 41 percent, which is a controlling interest in MGI where we have actually launched a new distribution agreement. Konica Minolta is now globally going to market and sell our entire lines of products. From a sales standpoint, it gives us much more visibility and from a service standpoint a much wider infrastructure.
How much has MGI grown in 10 years?
From 2008 to 2016, we grew something like 500 percent during some of the most difficult times in the printing industry. I think when times get tough people need to invest in something that brings a level of differentiation or innovation, so that they can actually compete on applications, not on price. That has really been our mantra this whole time. I do not care about how many pages you are printing per month. How much are you making on each one of those pages? If you are only making four or five percent that is not a good business model, but now if you can go to 60, 70 percent it is a different story.
Why is MGI’s new Artificial Intelligence SmartScanner, AIS, significant?
If I made a die or a screen, for example, I would never really be able to register any of what I am doing to a digital print for the simple reason that digital print moves page to page. The image registration maybe is going to be a little to the left or right, a couple of pixels up, a little skewed – every page is going to come out basically in a different position on the sheet.
So the most important thing is being able to move up, down, left, right and custom fit every single page by comparing it to the original PDF of the print file and seeing where the moves are. The key point here is that AIS is going to be creating – using artificial intelligence – a topographical map of your print. By comparing that live with the actual PDF of the print file, it is going to be able to stretch out all those points where maybe there is high ink density that shrunk the paper or maybe you laminated it so you have a severe slip, stretch or a fan. In screen printing maybe it would take me 20 minutes to stretch my screens out manually to get my fit right and I have to spend a lot of sheets to get my fit correct to be able to make up for all of those deformations once it is out of the press.
The scanner does away with all of that. Number one, your first sheet out is going to be perfect. Number two, you do not need that professional eye to understand where your stretch is in your sheet. It is all being done automatically as touch-less as possible. When you mix that in with the variable data barcode reading system… Not only will it varnish and foil the right image, but it is actually going to custom fit and custom register each one of those sheets as they are moving through. It has never been done before.
How much data is being processed to leverage the AIS topographical maps?
That was one of our biggest problems. If you look at the actual computer system that is just running the scanner alone it is basically doing five teraflops of information per second. It is a lot of information being crunched to be able to pull up the right file, trace the TIFF from the PDF, then be able to compare that file live to the actual print and be able to do all of the modifications automatically. For me it is the coolest technology we have ever done and we have done some pretty cool things.
What MGI technologies excite you most?
I also think that the fact that we have a B1 JETvarnish and a roll-to-roll JETvarnish or the fact that we are actually putting foil down with toner are all really fascinating products. I am most proud of the [AIS] scanner, because I know how much work went into it, almost four years of nonstop development and to see it actually work, knowing that it has been the unicorn. That was the codename for it, The Unicorn, because everybody was talking about it internally and hoping we would one day see it work.
What MGI technology is having the most market penetration?
Right now, the Meteor is having a large amount of success because, at the end of the day, it is still a digital press that can do all of the commodity stuff. But then you turn on the iFOIL and you start running envelopes or plastics or PVCs, or long formats, and put the foil down and it suddenly boosts your added value.
On the JETvarnish side, I would say that 95 percent of the people who are buying this equipment are getting into varnish and foil for the first time in their history. So from a market penetration standpoint, we are having more placements with the Meteor, but the JETvarnish is significantly up compared to previous years because I think the market is finally starting to accept digital embellishment. Out of all the JETvarnish products, we are having an incredible amount of success with our B1 JETvarnish and iFOIL… it really allows us to go after a whole new customer segment which is the packaging converter.
Is packaging ready for MGI’s digitization?
Packaging wasn’t one of our priorities. For the past 35 years, we have focused on commercial printers, but the packaging guys are the ones who came to us and pulled us into that market. The more we did research, the more it made sense for us to develop a 29-inch JETvarnish to be able to do those XL sheets and today that is our number-one selling unit and that is for the packaging convertors. A lot of commercial printers are trying to find ways into digital packaging as well, because, according to Infotrends, there will be 41 percent growth over the next two years in digital folding cartons. I do not know if you could show me one other statistic in our industry that is as incredible as that 41 percent.
How is MGI technology suited for labels?
I read a stat from LPC that said by 2020 three out of four new label presses will be digital. Most importantly, [with MGI technology] it not going to cost you a lot of money to varnish and foil jobs. It is going to be a low-cost job which you can still charge a premium for. The brands are the ones who are pushing it that way, which is a big part of what we do to educate the brands on the advantages of digital and being able to do this kind of work.
A unique business trip to the Soviet Union, including a look inside the printing operation of the Red Army, at the height of the Cold War leaves a lasting impression.
The world of print has been enriched by many folks from all walks of life who took many different roads to arrive at an industry with seemingly no beginning or end. On a busy mid-week day 36 years ago, a city inspector walked into Frank Herrington’s print shop. “Can you tell me where your designated smoking area is?” asked the inspector. “Wherever I’m standing,” uttered Frank.
This story was often repeated and always with a chuckle. It was a different time. Frank, a lifelong smoker, seemed to have two butts going at the same time. It was never uncommon to see an ashtray with a forgotten cigarette burned to the end with a length of ash. I first met Frank around 1977. He was then a partner in a trade shop but already had a lifetime’s worth of print experience. Born in Hastings, Ontario, to a family with a lot of siblings, Frank had a rough early childhood and found himself and his younger brother, Murray, in an orphanage.
Unlike today, there were few family roots in the printing industry and it was a chance opportunity that Frank found a job at Toronto’s Parr’s Print & Litho in the mid-1960s. Starting with a broom, Frank did all sorts of odd jobs until one day a pressman called in sick and he had the chance to run a varnish job on a Consolidated Jewel. The Jewel was a hefty 30-inch single colour offset press made by ColorMetal in Zurich, Switzerland, but rebranded (as was common in those days), from its Swiss name Juwel to an Americanization Jewel.
Frank was hooked. Especially with offset as he had no interest in letterpress. Like many of his generation, trade schools carried printing courses and taught various disciplines such as typesetting, page assembly, platen press operation, and so on. But for Frank, learning the California job case and composing with type was dumb and tedious when offset offered a better future in printing.
The ATF Chief 20 was a popular smaller press at the time and soon Frank was running one of these 14 x 20-inch single colours, too. He would run split plates for the record jacket business. This was difficult work, making ready two plates on one cylinder. Next he had the chance to run a Harris LUP two colour. This was a 49-inch press and the big leagues. Over his entire life, Frank preached about the simple intelligent concepts of the Harris press.
Frank also had a short stint working in St. Paul, Minnesota, with Ternes Pin Register. Norm Ternes was instrumental in developing a simple method of installing register pins in plate clamps and also made plate register punches. On his return to Toronto, along with two partners, Frank began manufacturing plate punches and installing systems on all sorts of presses. It’s important to know that even in the early 1970s few offset presses had any kind of pin register.
I once saw him completely re-strip a four-colour cover and print the job on a very old Solna 124 single colour. It was quite amazing to see him manipulate the film, cut the masking sheets, burn the plates and then make numerous adjustments to the press just to get the job out and prove to our customer the press would print.
On another occasion, we had a customer in our shop and Frank was print testing with some plates that the customer had brought. The Harris LXG-FR had Micro flow dampening. What a chore it was to set the dampener, because it was driven by two sets of V-belts. I leaned down to look at the plate docket the customer had brought. Frank, without missing a beat, leaned over and said if I ever pulled out that screen plate he’d kick me into the middle of next week! Frank knew that trying to run a full screen in such conditions would be a disaster.
On yet another occasion, we had sold a printer a Heidelberg KOR single-colour offset press. A few months later that customer had dropped a dampener form into the press and smashed it. Resulting inspections by the Heidelberg agent indicated the press was scrap, so we were able to take it back for parts. After months of this press languishing in our shop, Frank strolled in one day and asked, “Whats up with the press?”
I told him the story and how the press’ owner had said the plate cylinder was bent and it was toast. “But did you check it yourself?” Frank asked. I had not. So we did it together. Much to my surprise the plate cylinder was not bent and we quickly went through it and sold it on to another shop. This lesson was one of the most important Frank would pass on to me.
Our long association proved to be much more than fixing presses and learning common sense. Frank would always challenge you. This trait seems almost extinct today. Over the last 40 years we had many a good mechanic work for us. Some were quite brilliant, others less so. Frank was unique in his ability to speak to owners with confidence while at the same time be a mentor to even the lowest skilled employee. From all walks of life there are folks even today that can share the same sentiments about Frank and how he was the best friend any of them could possibly have.
Frank’s genius was in his confidence. He never let a piece of equipment intimidate him. No matter the complexity or difficulty. Especially with an offset press, Frank’s common sense fundamentals allowed him to almost always disregard the operation manual and use inherent basics to set grippers, adjust bearer pressures or make a feeder run difficult stocks.
Honey, disconnect the phone
Over the next 25 years I would make seven or eight trips to Russia but a visit in 1980, in the midst of the Cold War, was special. For Frank, this was his first visit anywhere out of North America. We traveled aboard an aging Aeroflot Ilyushin Il-62 where the in-flight refreshments consisted of handing out mickeys and chocolates wrapped in tin foil. So here we were in Moscow during two weeks of September 1980. Our goal, to study various printing related equipment manufactured by the Soviet Union and see if we could purchase any of it.
Frank and I had become close friends. He taught me a great deal and I needed him to help me access the viability of the anticipated equipment we would see. We arrived at the scary monolithic Hotel Ukraina near Red Square. A very large haunting and dark place we nicknamed Dracula’s Castle. The Ukraina was a huge place built in a typical Soviet Style in 1953. This was also a foreigner’s Hotel and Russians themselves could not enter without a pass. The room had a black-and-white TV and a radio that was hard wired and couldn’t be turned off. Only the volume worked – there was only one station, too. I recall it was made of Bakelite and had the shape of the Moscow University’s main tower. The radio would chime an eerie tune to signify the top of the hour.
Off we went the next day to the Red Army printing plant. There we were to see the supreme example of the Soviet industrial complex in the POL-54 offset press. This press, a single colour about 74 centimetres (29 inches) was running with two operators (one sitting on a stool at the delivery). To make matters worse the press wasn’t even running offset but rather letterset (dry offset). Frank had a quick look, smiled and whispered, “If that’s all they have we’re in for a rough two weeks.”
Representatives from Techmaschexport (Soviet exporting agency) asked our opinions and I nudged Frank to go take a better look. He’s under the feedboard checking the grippers while all of a sudden the operator hits the run button. This caught Frank’s finger in the press and, as blood dripped from his hand, off he went with a nurse to the infirmary. Shortly after, with a plaster cast the size of an ice-cream cone, in strolled Frank. We never saw the Pol-54 again and apparently no one else did either.
Our days off proved amusing and we had a lot of them. Each place we visited, Frank shook his head. In order to buy something at a store you needed to find what you wanted, get a chit, go to teller to pay, then back with receipt to the first guy. The 1980 Olympics had been held only a few months earlier, so we wandered over to the main outdoor stadium where, to our glee, we found a store that sold potato chips. Nearby was what we would call a fast-food restaurant. We nicknamed it the Bun & Run. They were serving some kind of dish with a flatbread and a white creamy sauce poured over it. Looks good we thought. Pulling out a few Rubles, Frank bought a couple only to find out the sauce was some kind of butter milk. Tasted awful, smelled even worse. The food in the Ukraine was remarkably better than Russia.
We walked each day to Red Square and watched the locals in the GUM department store. We visited a science and technology museum and spent time at the INTOURIST Hotel bar because as foreigners we could get in. But mostly we found ourselves in the main dining area of the Ukraina each night, getting a laugh when we spotted new arrivals trying to figure out that the only drinks were Georgian sweet “Champaign” and Vodka.
We took a flight to the Ukrainian city of Odessa on the Black Sea. There we toured a prepress factory known for platemakers and cameras. It held really nothing of relevance, but we consumed a lot of Vodka during a lunch put on for us. That evening Mr. Ptashkin, our host, insisted we take in a show at the famous Odessa opera. Moments after taking our seats, Frank quickly nodded off. Afterword we walked down to the water on the famous Potemkin Stairs. These sacred steps were constructed in the 1800s and unique because from the top looking down you don’t see any stairs only landings. But on this night somehow, Frank and Ptashkin got into a bet of who could get to the top first. Frank did.
So it’s now after midnight and time to head to the hotel. “Let’s go for a nightcap,” says Frank. There are no night bars in Odessa uttered Ptashkin in a stern voice. “Follow me,” said Frank. Around the back of the hotel, down some steps, knock on a door and – voila – a night bar and with Western liquor to boot. That was Frank, who was somehow a step or two ahead of everyone. Well, we left Frank at the bar and that’s the last I saw of him that night. I was worried in the morning when he didn’t show, having made my way down to the foyer to await our hosts. I was just about to explain Frank’s absence to Ptashkin when he strolled in looking haggard. Best we leave the rest of that story alone.
Soviet presses and the KGB
Once back in Moscow another outing was arranged to visit a major factory in the city of Rybinsk. This city was near a giant reservoir and about 300 kilometers north of Moscow. To get there we had to take the train and also get special permits. The trip involved leaving Moscow in the evening to arrive in the morning. Neither of us actually knew where we were going and looking back it seems nuts to take such a long time to go 300 kilometers. We shared a bunk-bed cabin with the female interpreter and Mr. Ptashkin, separated from the proletariat who had less than stellar accommodations. It seemed every time we awoke coincided with the train stopping, changing direction or in one case stifling smoke in the cabin. Someone had closed a vent for a coal-fired massive tea urn at the rear of the car.
The factory was huge. It still exists today. Back then it also had its own iron foundry. This facility made a wide range of printing equipment from web to sheetfed. A little cold set web press called the POG-60 was actually a licence agreement with West Germany’s MAN and was created to be portable. There were three units and a folder. Two colours one side, one on the back and in a tabloid size. We found this little press amusing because although the Soviet Union had several dailies we never saw anyone reading them – only reading official posted copies of a broadsheet on designated notice boards.
Very large offset and letterpress newspaper webs – all for Coldset newspaper production – were being assembled in the factory. One item of interest was a sheetfed feeder by the name of TIPO, which turned out to be a Planeta design and the Soviets were now building all the feeders that were to be used on these East German presses. Oddly enough, the Soviets failed to use this feeder for their own presses. We were able to view the VOLGA offset press. In a 40-inch size, the VOLGA featured chain transfer from each unit – another dud! We walked past at a brisk pace. But we did have another troubling experience the next day.
There was a special apartment in a workers housing complex. This was reserved for foreign guests. We had a few hours to kill and both of us had brought gum and candies to pass out as gifts. Looking out of the window I noticed some children playing in the late afternoon, so we grabbed our goodies and cameras and went downstairs to hand out the treats. All the kids were excited and we enjoyed making their afternoon.
The next day the Rybinsk general director invited us to a special workers camp on the banks of the lake. Surrounded by woods, this camp consisted of a large house, sauna and outdoor showers. They laid on a feast along with the customary quantities of vodka and toasts. Followed by an obligatory visit to the sauna. A car arrived for us around dusk and we headed back through the woods toward the main road. However, as we cleared the thick trees two black Moskvitch cars blocked our path. Frank and I were ordered to stay in our car while Ptashkin got out to talk to a bunch of guys wearing three quarter length leather trench coats. Moments later a stern looking Ptashkin came back and told us we had been observed taking photographs in a prohibited place the previous day and the “police” insisted that I hand over my camera and film. At first I refused but Frank clearly knew more than I and told me to shut up and give the KGB the damn film. I reluctantly agreed. The KGB developed my film and kept the ones they felt would cause harm to national security.
Funny enough, 14 years later I again found myself at the same factory. By this time the Soviet Union had collapsed and things had changed a great deal. In the huge machine hall, once occupying all types of machine tools, the printing presses were gone and in their place workers were punching out pots and pans. Central planning and subsidies exposed a crumbling infrastructure.
The U.S.S.R trip gave us a lot to laugh about for years after, but the trip ultimately proved to be disappointing. What was very apparent to us was a stubbornness of the Soviets not embracing developments from the outside world. As we later discovered all high-quality printing was not printed in Moscow but in places such as Finland, Austria and Hungary. But that’s possibly because print was not a defense industry and languished because of its apparent unimportance. Odd still considering the Soviet Union, at that time, was the world’s largest producer of books.
I continued to learn many lessons from Frank – both in and out of the printing world. I really miss my good friend in so many ways and I’m not alone. Frank touched a lot of people’s lives and left an indelible mark on all who knew him. We don’t have many in our print industry like Frank anymore. Guys that were strippers, pressman, mechanics and electricians all rolled into one.
I once asked Frank why he had so little respect for authority. In his early days, he had been in the Air Force, trained to use secretive radar equipment. After all the training and being sworn to secrecy, he was walking downtown a few years after leaving the military and saw one of those secret radar units for sale in the window of a surplus store.
Asia Pulp & Paper Group in 2013 introduced its Forest Conservation Policy as a large-scale environmental initiative based on zero deforestation. The policy would require a range of investments by Asia Pulp & Paper (APP) with a goal to put an immediate end to sourcing pulpwood materials from suppliers involved with natural forest clearance.
The company, with its primary roots in both China and Indonesia, subsequently engaged leading environmental organizations like Rainforest Alliance, Deltares (a research institute) and Greenpeace to evaluate this unprecedented Forest Conservation Policy (FCP). APP opened up its operations to allow these organizations to track its FCP implementation progress.
Over the next two years, APP continued to work on its environmental stance with initiatives like the world’s first-ever retirement of commercial plantations on tropical peatland – some 7,000 acres – and a program to restore and conserve one million hectares of forest across Indonesia, primarily within the Bukit Tigapuluh ecosystem, home to the endangered Sumatran Tiger. These massive initiatives were in response to mounting environmental criticisms leveled against APP over its practices.
As a result of facing the criticism head on, APP has invested millions of dollars into establishing a stronger environmental position and, at the same time, reorganized its operations into one of the most modern structures across the paper world.
While most other paper makers are running legacy equipment, often shutting down equipment based on unmanageable fluctuations in supply and demand, APP over the past 10 years has brought on line three new paper machines designed with technical flexibility to respond to new market demands.
The company, driven by its own unique eucalyptus plantations, is now seen as the world’s most vertically integrated paper producers. This position has allowed APP’s Canadian operation, focused solely on moving paper as opposed to diversifying into equipment distribution, to reengage to domestic printing industry and become one of Canada’s most powerful paper suppliers.
New Canadian model
APP’s new direction in Canadian printing primarily began in 2010 when David Chin became President of APP Canada. One of his primary goals was to become a preferred paper supplier to Canada’s Tier One printing operations. This would require new levels of market penetration for the company, which had traditionally focused on the retail market as a paper merchant. Chin instead began to build from APP’s long presence in the Canadian market to establish direct relationships with printers, as opposed to working through distributors.
“We are not newcomers in the market. We have been here since 1998 so we are a very stable entity and we also have ample stock. If I am not mistaken we are the largest importer for commercial printing paper in Canada and we also have the most inventory of commercial paper in Canada,” says Chin. “We have made some giant leaps with Tier One customers, the top 10 printers in Canada, mainly because of our service and paper quality.”
Chin explains APP Canada purposely hires local people, as opposed to transferring people from overseas operations, to help build its presence in the domestic market. “We are truly a Canadian company. We are growing the Canadian economy and not just growing in Asia.”
Much of APP Canada’s growth in the commercial printing market over the past six years can be tied to the operation’s ability to leverage the complete production integration of its parent company, which has spent the past decade building one of the world’s most modern end-to-end paper operations.
“Our advantage is really integration all of our pulping facilities are a short drive away from our production facilities, if not on site,” says Ian Lifshitz, Director of Sustainability and Public Outreach, Americas, Asia Pulp & Paper Group. “So frankly we are able to get a competitive cost advantages.”
Lifshitz notes APP does source some pulp on the open market, typically based on product type, but for the most part APP has emerged as an internally driven global operation that has been outpacing the investments of its competitors.
“When we look at investments in new machines, and I am not talking about a converting machine, rather a paper-making machine, it has been a number of years since we have seen any investment in the North American market,” says Lifshitz. “When we look at what APP has done alone in the last 10 years we have brought on three giant machines – we are talking about $12 billion of investment.”
In China, APP brought on what is now the world’s largest board machine housed in a building resembling a large airplane hanger to accommodate what amounts to a circular machine measuring around one kilometre in length. “We see our potential on a global scale in terms of investment in technology… and I think that is huge for APP in terms of its future within the industry,” says Lifshitz.
New market realities
Lifshitz explains the investment in three modern paper machines allows APP to evolve product offerings as its printing-industry customers are also evolving, which may include providing coated or uncoated sheets, copy paper, stationery or printable packaging materials.
“APP can look at the growth segments and expand our portfolio. That is a key to our success,” he says. “We have an advantage in machine flexibility because we are able to produce jumbo rolls… we are able to adapt our machine technology with different levels of pulp, different levels of coating, whatever the customers demands on a full run.”
Whereas legacy paper production operations are primarily focused on shipping rolls out for further cutting and converting, APP is able to do single roll production and adjust its machines based on customer demand and this affords significant production savings.
Flexible, full paper production integration combined with sourcing its own pulp from plantations allows APP to turn savings into stable global paper pricing. This is a key advantage particularly over the past few years when printers have seen significant fluctuations in their paper pricing.
APP’s installation of new paper machines over the past decade are also supported equally aggressive investments around becoming a more environmentally progressive operation. “APP Canada sources from Indonesia and China and, through plantation development and sustainable efforts, we have really been able to take a leadership position to provide what the marketplace wants,” says Lifshitz. “We see customers looking for sustainable paper making and environmental credentials and we are able to provide that now... Over the past five years, the commitment on sustainability has really changed our value proposition and we now really have become a definer in terms of zero deforestation.”
The plantation model employed by APP, which allows it to avoid clearing forests, relies on a special fast-growing eucalyptus genus, with other farmed species including poplar and acacia. The APP concessions in China alone represent approximately half of the country’s total pulpwood plantations.
“The challenge for us, because we are truly integrated, is that we have to work with our suppliers and our suppliers’ suppliers to ensure they maintain the same commitments that we do in our supply… to ensure that all of our materials that arrive at our mill are harvested sustainability and follow our policies of zero deforestation,” explains Lifshitz.
Based on years of research and develops, APP’s eucalyptus trees can now be harvested and planted in five-year cycles. This model is driven by APP controlled nurseries, including its primary Hainan location that produces more than 100 million plantlets each year that are then transplanted into APP’s managed plantations – a process that is crucial to APP’s goal of zero deforestation.
“We are an integrated company all of the way from pulp manufacturing to retail and that sets us apart from the rest of the competitors,” says Chin. “Because we are fully integrated, we can go all of the way into the pulp price so we can offer more stable available pricing, which gives us more options.”
Chin explains these options afforded by APP’s full production integration directly relates to the growing number of paper varieties it now supplies to the Canadian printing market. This becomes a vital asset as a coast-to-coast operation, with facilities stretching from Quebec to Vancouver, employing around 75 people.
Chin explains this position is also supported by the fact that APP is solely focused on the paper needs of its customers, as many of its competitors have diversified into selling equipment and industrial supplies. “Selling our paper is what we have been very successful at over the last few years,” says Chin, “and I think for the next few years we will stick with that.”
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