Probably Metroland Media, owned by Torstar Corporation, which also owns Canada’s largest daily print newspaper, the Toronto Star, is best known for publishing over 100 community newspapers. Geographically the circulations of these papers span the province of Ontario, from London in the west to Parry Sound in the north to Ottawa in the east, with predictably the densest concentration in the Greater Toronto Area. Most of Metroland’s newspapers are distributed weekly, some twice a week, and two – the Hamilton Spectator and Waterloo Region Record – are dailies. Annually, the company also distributes four billion advertising flyers – partly printed by themselves but mostly printed by others – door to door to households in its newspaper-circulation areas.
This year, in partnership with BrandSpark International, Metroland completed a study of its community news readership, comprising over 13,000 online and telephone surveys of adults in Metroland’s circulation areas. The study shows that 90 percent of respondents use either Metroland’s printed community newspapers or flyers for local news or shopping information.
Recently, I asked Michelle Digulla, Vice President, Marketing, Metroland Media, and Dean Zavarise, Executive VP and General Manager, Torstar Printing Group, who oversees Metroland’s printing activities, for details on how Metroland maintains this high degree of market penetration in Canada’s most populous province. Digulla and Zavarise also discuss the future of Metroland’s community newspaper and flyer businesses, and how these fit with corporate strategy.
Digulla says, that besides their community newspapers and flyers, Metroland Media is one of the largest direct-mail distributors in Ontario, to the tune of four billion pieces a year that reach about 84 percent of Ontario households each week. In addition to the digital assets associated with its community newspapers, Metroland also operates other major online community news sites that Digulla says are one of its fastest growing businesses, currently experiencing double-digit growth.
The company also publishes printed magazines and organizes experiential consumer marketing shows in such categories as bridal, food and wine, travel and most recently a video-gaming show called EGLX, by far its largest expo, that premiered in Toronto in April.
Digulla explains: “Our biggest assets are WagJag.com, a group-purchase Website where Canadian consumers can buy discounted products and services, and Save.ca, the largest digital flyer and coupon company in Canada. We dabble in other interests, but the ones I’ve mentioned are the biggest buckets.”
Digulla says one of the main reasons behind Metroland’s strength in community newspapers is the company’s longstanding connections to the communities it serves: “Hyperlocal content really matters to the members of a community. Two-thirds of our online traffic comes from search and social media, where we find many people sharing our local content because of its uniqueness. They can’t find it anywhere else.
“Our staff who produce the community newspapers live in those communities, so we know the people intimately, what topics interest them, what causes a stir, and whom to call for the inside story. These relationships give us the right balance between the ability to act locally and be part of the community versus the large scale of a big company that enables us to do our job efficiently.”
Zavarise explains: “To maximize efficiencies across our entire platform, Torstar Printing Group operates as a network of printing plants and has downsized or consolidated plants as needed. In the last three years we have closed three plants.” In July 2016, this included Metroland’s Vaughan plant with printing of the Toronto Star outsourced to TC Transcontinental.
Zavarise lists the six plants Torstar Printing Group currently operates across Ontario, all with mainly cold-set web newspaper-printing capabilities: Ranked by number of staff, the largest is the Hamilton Spectator plant (in Hamilton), where they print Metroland’s two dailies on three large double-width Goss presses and perform offline packaging work for the Toronto Star. Besides printing and distributing its own properties, Torstar also prints and/or distributes newspapers published by competitors; for example, just recently it signed a contract to print Postmedia’s London Free Press (published six days a week) in Hamilton starting in October.
Torstar’s second-largest and most modern plant, located on Tempo Avenue in Toronto, is equipped with a KBA Colora press and two lines of community-style single-width presses. Largely the Tempo plant prints bigger community newspapers, and also Metro Toronto, the free daily owned by Metroland’s sister corporation Star Media Group, also a subsidiary of Torstar. Zavarise says the Tempo plant’s production consists of about 85 percent work for their own or affiliated companies and 15 percent general commercial work for third parties.
“At Tempo we are just starting up a new, relatively small heat-set single web installation – our first foray into this type of equipment after many years. Its purpose is to print small to medium runs of flyers and other marketing materials, which we see as an opportunity to grow our already strong relationships with many flyer advertisers by offering them more services,” explains Zavarise.
A third plant, Central Ontario Web in Barrie, with two community newspaper press lines, is used to print Metroland’s assets including its many newspapers circulated in northern communities like Barrie and Muskoka. At a fourth facility, Hamilton Web Printing in Stoney Creek, a single line community press prints newspapers and third-party commercial work. Thuroweb Printing, a small fifth facility in Durham, near Owen Sound, produces newspapers for southwestern Ontario communities such as Fergus, Mount Forest and Elmira.
Zavarise says Torstar’s sixth facility, Performance Printing in Smith Falls, a suburb of Ottawa, is the company’s most commercial-style plant, providing both newspaper printing (including Metro Ottawa) and full-service printing capabilities for the Ottawa area. Its equipment includes two cold-set community press lines (one tower with UV), sheetfed presses, bindery, an inserting facility, and a digital lettershop operation for direct mail.
Commercial third-party printing
Zavarise explains: “Our jobs for Metroland and Torstar are a captive business. Generally they are fairly routine and fall into the same slots each week. But our commercial printing is more opportunistic, and we’re always glad to take on more commercial work.” He adds that the schedule at each of Torstar’s six plants is overseen internally by each location’s operations manager, but when major changes are requested by publishers and third-party commercial customers, a central planning team figures out where they can best schedule the work to ensure efficiencies and that customer requirements can be consistently met.
Since the busiest production days tend to be Tuesdays, Wednesday and Thursdays for community newspapers and Mondays and Fridays for flyers, he says commercial work is often scheduled in between these crunch times to maximize use of resources. “And if necessary, we also maintain relationships with other companies who can do our overflow printing.”
Zavarise continues: “In the last three months, we started Metrolandprinting.com, a do-it-yourself Web storefront offering our advertisers and other clients and the general public the ability to order a large gamut of printed products from us directly online. This portal was the brainchild of Nathan Matheson [Director of Business Development and Administration for Metroland Media and Torstar Printing Group], who thought, that instead of just selling what our plants can do, we should facilitate all forms of printing for our customers. This strategy enables us to build on our existing relationships and make things easier for our clients by offering them one-stop shopping.” The Website’s current online offerings include business cards, stationery, postcards, brochures, door hangers, greeting cards, tear cards, tent cards, magnets, labels and large-format signs.
Flyer fine points
Zavarise explains: “Our distribution business is a very solid, reliable process, audited by the Flyer Distribution Standards Association. It is a sophisticated operation involving not a few guys in a back room, but hundreds of people working in massive facilities of 10,000 to 80,000 square feet with one to four inserting machines. Across our footprint, we operate 14 such large regional distribution centres, most with machine-inserting capabilities.”
He says all their distribution facilities share a common software management system to track the week’s flyer placements and delivery destinations. This system records which zones each flyer needs to reach and downloads the information to the inserting machines at each facility. Each facility waits for the printing plants to deliver the week’s flyers before they can start building packages. Typically they start on Friday for a Thursday delivery and work around the clock and through the weekend, depending on the size of the packages to be assembled for individual homes. For one community newspaper, a typical package can contain 30 or 40 different flyers, says Zavarise. Once packaging is completed, contractors transport the bundles of flyers to carriers’ homes along with the printed newspaper for their community. Usually a Metroland newspaper and one or more packages of flyers are delivered separately to each carrier, who assembles them into a single package and delivers it door to door.
“Occasionally we use Canada Post, but in many markets we still distribute flyers in packages via youth carriers, each delivering to as few as 50 or 60 households,” Zavarise continues. “That’s where the complexity lies. Advertisers can narrowly target where their flyer lands. We can help them determine which zones have the right demographics to match their target market.”
Digulla comments: “No one else in Ontario is large enough to afford or warrant the type of work we do for major clients in targeting flyers to specific locations based on point-of-service customer data collected by the clients. Our team includes a specialist with a Masters degree in Geographical Information Systems who can calculate very narrowly targeted deliveries to as few as, say, 60 homes based on factors such as demographics, income, purchasing behaviour, lifestyle, or psychological profile.”
Zavarise says that advertisers often use this targeting service on simpler terms by choosing to distribute their flyer to one specific portion of a community rather than the community as a whole: “For example, although a big grocery store chain might want their flyer to reach every household, a small laundromat might only want their flyer to go to the 1,000 homes located closest to the laundromat. We have the capability of doing that.
“And if 20 other types of businesses are doing the same thing,” adds Zavarise, “an individual carrier might end up with a unique set of flyers that is quite different from the package delivered by the carrier on the next block.”
In the next three to five years, Digulla expects to see much more interest and business activity from clients based on point-of-service data and geo-demographics. She also anticipates that Metroland will be doing more to expand and leverage its growing digital properties.
Both Digulla and Zavarise say, that although in general the Canadian newspaper business is being severely challenged by the movement of advertising dollars from print to digital media, Metroland’s study indicates consumers’ receptiveness to printed community newspapers and printed flyers delivered door to door remains high. Consequently, they feel optimistic about Metroland’s ability to continue attracting advertisers to sustain these businesses into the future.
Additionally, Zavarise predicts, that although at present, relatively speaking, they do not print a lot of variable data for their flyer advertisers, the demand for this service may grow in the future. For example, right now they print and circulate multiple versions of Niagara This Week in six different zones. Some content is common to all six, but other content is limited to certain zones. Similarly, Digulla says a grocer who has great take-up on particular products in a specific area may customize their flyer for that specific area and request a special drop.
In the future, advertisers may start exploiting these types of possibilities more often. “It all depends on them,” says Zavarise. “We’ll stay open to whatever they need.”
As CTO of Global Graphics for the past decade, his knowledge is infused into the ubiquitous Harlequin RIP. PrintAction spoke with Bailey about the company’s new Fundamentals program to help inkjet press manufacturers overcome technical hurdles.
What is Global Graphics Fundamentals?
MB: For the last several years, a number of inkjet vendors have approached us with questions on whether we can help them build DFEs to go with inkjet presses that they have created or solve problems around the speed or quality on presses they are already shipping. And now Eric Worrall is heading up our [BreakThrough Engineering Service] and we’ve essentially formalized what we had been doing in a more ad-hoc manner. [Fundamentals] is designed to allow a press vendor to bring a new press to market more quickly and to be more confident that it is actually going to deliver the speed and quality and functionality that they want to provide to their users.
What area is of most concern for inkjet?
MB: We have talked quite a lot over the last couple of years, in particular, about halftone ink quality of using greyscale heads on single-pass inkjets. It is an area that a lot of people seem to be struggling with.
Why is there little inkjet screen discussion?
MB: There [is] very good technology in the wide-format space – multi-pass, fairly slow speeds, with many inks and levels of droplet size on the heads... but we do not see people doing significant work on the half-toning in the high-speed, single-pass production space. We do find that there are real problems there. That the drop placement isn’t as accurate as you would really like it to be, partly because of dot shape deformations, because you get elliptical marks where the drop actually hits because the substrate is moving so rapidly.
You tend to have pseudo random coalescing of adjacent dots. It is quite not random enough though. There tends to be a directionality to it, so that at normal reading distance you get a visible texturing. We have been working with three or four press vendors for a couple of years now to improve the output they can produce on their presses – to absolutely minimize the texturing effects and simultaneously ensure we are hitting the maximum total area coverage, ink lay down.
What is the best screening approach?
MB: There are good reasons to do the screening in different places depending on the workflow. In many cases, it makes sense to do the screening inside the RIP, if you can, simply because you are moving less data around post-RIP... When you consider that the fastest inkjet presses at the moment consume something around 20 gigabytes of raster per second then reducing that data transport requirement is a very significant gain.
But, in other cases, there are good reasons why people want to do the screening at the last minute in order to do on-the-fly recalibration, or head-to-head calibration, because of the width of the press, etcetera, and do that in a near close-loop environment… There are people who are using other people’s RIPs and unhappy with the quality they get from the screening or the speed they get at the screening. It is a very useful first step for them to say, ‘I am going to throw away the screener that came with the DFE… I am going to plug in Global Graphics ScreenPro because it is a lot faster and gives the quality I need.’
How are inkjet speeds and DFEs related?
MB: Building a DFE for one of these very, very high speed [inkjet presses] requires as much emphasis on systems engineering as it does on the RIPping, colour management, etcetera… that is hitting 1,000-feet-per-minute speed, which is aqueous. A lot of the people we tend to be working with at the moment are on UV and it is coming out at about 230/250 feet per minute. So far it is a lot slower than aqueous. I do not know if it is going to stay that way.
When will inkjet move deeper into commercial print sectors?
MB: They are pecking away at a number of different sectors to start with… Obviously, the direct-mail market as a sort of adjunct to the transactional space, where inkjet has been used for decades, but now pushing into much more graphically rich work.
They are being used in the book and publication space. It is also being used in some of the newsprint markets, which is kind of relating to book. It hasn’t really gone into magazines yet, because it is only fairly recently that aqueous inkjet presses have got to the point where you can print at a sensible price on coated paper. That has been a fairly big breakthrough in the last year, 18 months.
In 2016, Montreal-based TC Transcontinental, North America’s third largest and Canada’s largest printer, with over 8,000 employees in Canada and the United States and 2015 revenues of $2 billion, is celebrating its 40th year in business.
Additionally, in the past few months, the company has made headlines multiple times for other reasons: In May, Transcontinental sold off all of its newspaper assets in the province of Saskatchewan, amounting to 13 newspapers and associated online properties, and closed its printing plant in Saskatoon. In June, Transcontinental acquired Robbie Manufacturing, the third packing company it has purchased in the United States in just over two years. In July, the company commenced a five-year contract to print Canada’s largest-circulation daily newspaper, the Toronto Star, after its owners, Torstar, announced plans to shut down its printing plant in Vaughan, Ontario.
Transcontinental’s past few months of widespread activity, seemingly disparate events, fit into the company’s strategic plans for growth in both the newspaper and flexible-packaging sectors.
Katherine Chartrand, Director of TC Transcontinental’s External Communications, clarifies that the May sale of TC Media’s Saskatchewan newspaper assets occurred because the assets were small in number and geographically remote from the bulk of TC Media’s other newspaper assets, which are based in Quebec and the Atlantic provinces. “Because of the limited synergies with the rest of our newspaper assets, it was simply not efficient for us to continue publishing a small cluster of newspapers in Saskatchewan,” she says.
The buyer of TC Media’s Saskatchewan newspaper assets, Star News Publishing Inc., already published five community newspapers in Alberta and Saskatchewan and printed over 60 community newspapers in Western Canada. “Because of Star News Publishing’s location in Wainwright, Alberta, and longstanding roots in that region, the sale made sense,” says Chartrand. “They are in a better position than we are to plan and maintain the growth of these assets.”
She adds that the closure of the Saskatoon plant, with an accompanying loss of about 30 full-time jobs, was a direct result of the decision to sell the newspapers: “The buyer prints their own papers at their Alberta facility, and the remaining commercial printing volume in our Saskatoon plant didn’t justify keeping the operation open.”
Chartrand recounts that around the 1980s TC Media first started to expand its publishing activities with the acquisition of Les Affaires (a paid-by-subscription business weekly) and other financial publications (plus consumer magazines which it later sold; 15 of them for example, to Quebecor Inc.’s TVA Group in 2014.) Subsequent acquisitions since the 1980s by TC Media include 20 Telemedia weekly papers in the greater Montreal area in 1995, 32 Cogeco newspapers in Quebec and Ontario in 1996, and the purchase of 74 Quebec weekly papers from Quebecor subsidiary Sun Media in 2014.
At present, Chartrand says TC Transcontinental is the largest publisher of local newspapers in Quebec and Atlantic Canada, with 111 titles in Quebec (including the daily Métro Montreal, all but one title free of charge), 35 titles in Atlantic Canada (including seven paid dailies, 17 paid weeklies, and other free-of-charge weeklies and periodicals), and two in Ontario (Seaway News in Cornwall and Orléans Star in Gloucester, both free weeklies.)
“We are proud to provide high-quality information to the communities we serve and are working hard to develop effective multi-platform solutions for our advertisers in these regions,” says Chartrand. However, she adds, a constant decline in advertising revenues year over year makes it especially challenging for TC Media and other publishers of community newspapers to continue providing high-quality information, while also endeavouring to convert their operations to more sustainable digital business models.
To offset this present economic challenge, along with other Canadian media companies and associations, TC Transcontinental is currently seeking the support of various levels of government. Chartrand reports, that in April, François Olivier, President and Chief Executive Officer of TC Transcontinental, recommended an action plan to the Federal parliamentary Standing Committee on Canadian Heritage, including:
• Temporary financial incentives for up to five years for local media publishers to cover part of their content-production costs;
• Temporary financial incentives for up to five years for local media publishers to support investments in the digital transformation of their business model;
• Increased ad spending by government institutions in local print and digital media; and
• A review of the way recycling fees are calculated so that publishers can pay reasonable amounts based on their recent circulation volumes rather than outdated data.
Chartrand adds, that besides community newspapers, TC Media is the largest publisher of French educational resources in Canada, with an annual count of more than 12,000 educational books in French annually, covering all grade levels. The company also publishes more than 800 French and English titles in the supplemental educational and general interest areas.
TC Transcontinental not only publishes community newspapers as described above, but also continues to position itself as a newspaper printer par excellence. The company began its new five-year printing contract with the Toronto Star on the evening of Saturday, July 2, at its modern Vaughan, Ontario plant, a 30-minute drive northwest of Toronto.
Brian Reid, President of TC Transcontinental Printing and TC Transcontinental Packaging, explains: “Our Vaughan plant is a relatively new facility with state-of-the-art technology and a team that’s very experienced in printing newspapers. When the Star first opened their own plant in 1992, almost 25 years ago, it was also state of the art, but obviously technology has evolved a lot since then. From 2007 to 2010, when TC Transcontinental opened our Vaughan plant, we invested roughly $800 million to upgrade our entire North American print platform. I think our investments in new technology provide the Star with the opportunity to get a high-quality product on new equipment and also reduce their printing costs.”
Reid continues: “Our model is a little different than traditional manufacturing environments. For outsourced newspapers we work with highly skilled, self-directed teams and a lot of automation. The result is a very efficient operation that allows us to make the investments we need, still make a reasonable return, and at the same time provide savings considered to be significant by the news publishers who decide to print with us.”
Reid says equipment highlights at Vaughan include two KBA Commander CT hybrid presses, both 66-inches wide with four towers and an individual capacity of 48 broadsheet pages in one path. “Hybrid means we can run both heat set and cold set and combine them – something very unique in newspaper printing,” he explains. “What this capability allows us to do, which helps in our pricing model, is to run newspapers at night, which are usually cold set – although The Globe and Mail runs some heat set on their outside cover and some of the internal sections – then run flyers during the day. All of our flyers are heat set.”
He says, besides The Globe, TC Transcontinental produces work for Torstar, Postmedia, and other newspaper publishers at their facilities in Vaughan, Calgary, Vancouver, Halifax, plus two plants in Montreal. In 2009, Transcontinental built another plant near Fremont, California, equipped with three hybrid Man Roland web presses with similar capabilities to the KBAs in Canada, to produce the San Francisco Chronicle, a paper they still print. “To print a daily newspaper, you have to be relatively close geographically to where the paper will be delivered, within a few driving hours,” Reid explains.
He continues: “Flyer work is our biggest segment in print and it’s very stable. Our research and the fact that we print billions of flyers each year demonstrate that consumers still like their printed flyers. Our customers still say they are the best way to drive traffic to retail stores.”
In Quebec, TC Transcontinental distributes its newspapers and retail flyers through its own marketing product called Publisac, a weekly bag containing printed flyers, newspapers, and specialty promotions with advertising printed on the outside that is hung on the door of households across Quebec (approximately 3.5 million homes). Elsewhere in Canada, the company manages the distribution of flyers to some 10 million more households through Targeo, its own Pan-Canadian distribution strategy and brokerage service.
“Newspapers are down a little bit because their revenue from advertisers has declined,” says Reid. “Some specific segments are better suited to online advertising, things like automobiles, so there is not nearly as much advertising for cars in printed newspapers these days. Real estate advertising has declined as well.
“As a result, newspapers are re-envisioning their models and choosing to outsource their printing so they can focus on their core business of providing content, rather than printing, which requires constantly upgrading the platform with capital investment. We have developed a model that’s win-win, so we can offer savings to newspaper publishers, yet still make a reasonable return that allows us to maintain a state-of-the-art printing platform.”
In explaining what made Robbie Manufacturing such an attractive prospect, which Transcontinental acquired in June, Reid says culture is always one of the most-critical factors when the company is considering an acquisition: “Since the inception of our business 40 years ago, we operate a certain way based on values that come from our founders, the Marcoux family.
“These values are innovation, team work, performance, and respect in the way we treat customers, suppliers, and each other internally. Because we spent a lot of time getting to know the owner and leadership team at Robbie, we were able to get a very good sense, that although they used some different terminology to describe it, their culture was similar to ours.
Reid continues to explain that Robbie Manufacturing also possessed a strong management team who were very supportive of the transaction and wanted to stay on. “Because we’re relatively new in flexible packaging, we need strong, talented people who are experienced in flexible packaging to add to our team.
“Third was their capability to add to our packaging portfolio with grocery-store pouches for products that include deli items and frozen foods, as well as packaging for multipack consumer goods.” Typically, Reid explains, if you buy a three-pack of, say, household cleaners in aerosol cans or plastic bottles, the products come wrapped together with shrink wrap film over a cardboard base.
But Robbie figured out an alternative packaging system for multiple consumer goods that eliminates the cardboard tray and prints on really, really thin shrink wrap film in a way that compensates for distortions to the printing caused by stretching the film around the product. Using their method, only when the film is in place can you actually read what is printed on it.
“Robbie’s national salesforce is nice, too,” says Reid, adding to the list of reasons behind the acquisition. “It expands our sales coverage across U.S.”
The Robbie Manufacturing plant in Lenexa, Kansas, is also about an hour and 15 minutes drive from Clinton, Missouri, site of the first packaging company Transcontinental purchased, called Capri Packaging. Reid says the production managers at Robbie and Capri already knew one another before Transcontinental acquired both companies. Capri prints rolls of packaging for dairy products, the largest being cheese and next largest yogurt. In May 2014, when Transcontinental acquired Capri from Schreiber Foods Inc., the Green Bay dairy company with over $5 billion in annual sales.
Transcontinental retained a huge 10-year contract with Schreiber which gave them security with the transaction. In September 2015, Transcontinental made its second acquisition of a packaging company by purchasing Ultra Flex Packaging Corp. in Brooklyn, New York, a manufacturer of roll-stock, pouches, and bags for the coffee, tobacco, confectionery, snack foods, and pet foods segments.
Why has Transcontinental moved so decisively into flexible packaging, which represents a clear shift in the company’s revenue generation, over the past couple of years? Reid explains: “First, for many reasons, the flexible packaging segment is experiencing a lot of growth: it’s cheaper, it distributes better, in many ways it’s more environmentally friendly – there are lots of reasons why there is a big shift toward it.”
“Second, the manufacturing process for flexible packaging is very similar to what we already do in our offset printing. The process still involves prepress, printing, and finishing, the big differences being that for flexible packaging we print on plastic instead of paper, and we use flexo plates instead of offset plates,” says Reid. “The finishing methods are also different, most involving converting and laminating, but still we have some familiarity with these processes. They’re not entirely foreign to us.
“The third reason is that flexible packaging hasn’t been consolidated yet. The fact that there are a lot of players allows us to look at acquisitions and ideally try to build a North American platform, both through organic growth and by seeking opportunities for acquisitions in the U.S. and Canada.” Transcontinental has since installed a new press, laminator, and slitter at Capri, and a new press and lamination line at Ultra Flex. We plan to make similar investments in the growth of other companies we acquire,” says Reid. “For sure, there will be more acquisitions.”
This past May, Solisco Printers marked its 25-year anniversary after the company was founded in 1991 by Alain Jacques and Jean Grégoire. The company initially focused on the publishing market, which remains a core business generating around 35 percent of its annual revenues, and more recently has expanded into the retail industry with the goal of serving niche vertical markets with catalogues and a range of related services from digital adaptations to distribution.
In 2011, Solisco initiated a new phase of investment with the installation of a Goss Sunday 3000 web press, which is now the cornerstone technology for the 400-employee company, headquartered in a 200,000-square-foot plant. PrintAction spoke with Jacques about the past 25 years and what the future holds for Solisco.
What is Solisco’s market position today?
AJ: We used to only mainly focus on magazines. Now we want grow the retail and catalogue side of our business, because newsstand sales today have been suffering. It is not a growing market, but there is still a huge market for magazines all across the U.S., so we want to offer the best services for high-end magazine and catalogue clients for the next few years. With competition you have to offer a bunch of services around the product. You have to be aware of the strategies of our clients and be a lot more involved.
What is Solisco’s key tech advantage?
AJ: Three years ago we invested in a Goss Sunday 3000. It was a risk but it has been a good reward for us, because it is a high-productivity piece of equipment... In our printing market, you must be a low-cost producer. In Canada, in general over the past few years, we have not invested in equipment as much as the U.S. has.
How does Solisco attract talent to Scott?
AJ: We do not have a lot of population around but people come from Quebec and we also do a lot of training with our people. We have a school inside Solisco. We have classes and train our people who earn a diploma. We have been one of only a few producers to do this and every session we have about 10 or 15 new diplomas.
What new markets are you focused on?
AJ: To print more jewelry catalogues, for example, we are going to go to all of the jewelry shows and directly show how we are going to be able to service that sector. We try to go vertical on specialty niches, so we do not go after big, big retailers or publishers… more emphasis is put on the manufacturers of products.
How do you approach niche markets?
AJ: We have subject-matter experts so whatever the client needs they are going to have the right person to answer their questions. Our sales reps know about the print itself, but when it comes to mailing and distribution or developing content for example, you need internal expertise.
How important is distribution for publication printers?
AJ: We do a lot of publishing in the U.S. and it is quite different than Canada with all of the co-mailing that exists. We have developed some expertise with geo-localization to get the best return on your investment. You have to offer services to go beyond just the cost of the transportation.
What is your primary objective moving Solisco forward?
AJ: Our tagline at Solisco is Experts with Character – innovation is the key. Innovation in everything: Research and development, on new types of products, adding equipment, whatever it is that is going to help clients sell more. Innovation is my key word for the next few years.
What is Solisco’s investment plan for the near future?
AJ: We are working on a major retooling to have all new equipment and get rid of the older equipment, adding capacity to our facility. This is a major tenant that we have for the next couple of years. I would like to put in another [Sunday] 3000... We are working on the project right now.
You need the right balance between signing contracts with major clients and having productivity gain. That is a risk that I am willing to take right now in the next two to four years. We will also be investing in new bindery equipment, so it is part of a pretty big project… we are talking about $20 million over the next four or five years, minimum… I believe print is going to be there for the next several years.
What excites you most about the future for print?
AJ: Canadian Tire just put out 12-million copies of a catalogue, last month. For me that is a game changer. They are going back to print. We see a lot of clients going back to print because it works. You have credibility in print that gives a client an edge over others that do not use print. I do not have any apprehension about the future with printing. Even if it is going to slow down for the next few years there is so much consolidation that there are a lot of possibilities, but you have to keep your eyes open.
The Mikia purchase is the most-recent example of a range of strategic investments led by Alpha Poly President Patrick Kerrigan, who took over leadership of the 50,000-square-foot operation in 2012, succeeding his father, Paul, who founded Alpha Poly in 1989. Kerrigan has been shifting Alpha Poly’s business approach since leading a lean-manufacturing audit in 2009, followed by a branding change, a new sales approach, and ultimately a multi-million-dollar capital equipment investment.
In 2013, Alpha Poly installed a massive 8-colour MIRAFLEX AM from Windmoeller & Hoelscher to produce higher-end process print jobs. This investment was followed by a decisive push to capture the growth in multi-laminates with a Nordmeccanica Super Simplex SL laminator. With the support of family members holding key leadership roles, including Matthew Kerrigan, Stephanie Kerrigan and Martin Boeykens, Alpha Poly is positioning itself as one of Canada’s leading independent companies in the robust flexography sector.
Kerrigan worked outside of the family business for 15 years after going to school for broadcast journalism at Mohawk College in Hamilton, Ont., which ultimately led to a career in post-production for television and movies. Kerrigan explains this experience allowed him to learn about his own approach in the business world before joining Alpha Poly. “I love to work with people and to mentor,” he says. “It is exciting to watch people grow – helping their families grow.”
When Kerrigan led the lean audit for Alpha Poly in 2009, he faced difficult decisions of managing a manufacturing business, particularly one that has worked to foster a family-like atmosphere across the entire operation. Following the audit, Kerrigan estimates Alpha Poly reduced its labour by 30 percent and increased its output by 80 percent. “The return on investment was paid back in a year,” he says, noting how much discipline it took to institute the changes; for example, having one operator work two packing machines instead of a traditional one-to-one ratio.
Just prior to the lean-manufacturing audit, Alpha Poly had purchased the assets of a struggling London, Ont., operation that had succumbed to selling work below cost, an easy trap to fall into in any printing sector. “You need to know and understand your costs,” says Kerrigan, who was preparing to have the same lean analyst return in February to reset Alpha Poly’s base after the past three years of change management to branding and sales.
“It is great to see things moving ahead,” says Paul Kerrigan, who continues to attend major management meetings. “Patrick is driving the ship. We have a lot of good workers and that is a big part of making your business successful. It is exciting to come in and hear about all of the things going on.”
As he began to transition into leading Alpha Poly, Kerrigan leveraged years of broadcasting experience to evaluate the company’s brand position, which lacked a concrete marketing plan. Alpha Poly’s eight-year-old Website was in need of a revamp to better support the sales structure and any future manufacturing investments.
“When people heard about us, because our name used to be Alpha Polybag, the first thing was ‘Oh, you do the shopping bags for the grocery stores,’” Kerrigan says, noting the company had also been printing roll stock for a long time, as well as reverse printing on polyesters. “We re-launched our name to let people know we are not just a bag manufacturer.
“At that time, I knew the next phase of the company was to get into multi-laminates because you could see back then it was a growing market,” Kerrigan says, recalling reports that indicated multi-laminates would experience eight or nine percent worldwide growth year over year. “Everything is moving from rigids like plastic clamshells and jars to stand-up pouches, so I knew it was a market you wanted to be in.”
Developing new markets
Kerrigan explains a key driver of Alpha Poly’s strategy began to unfold in late-2012 when he crossed paths with David Mailman, who was helping to lead packaging manufacturer Multipak Ltd., which was in the process of shuttering its operation.
The high-end flexo knowledge of Mailman fit perfectly with Kerrigan’s plans to move Alpha Poly into new markets, which would require investing in the new press. “The stars aligned,” Kerrigan says. Mailman arrived in early 2013 to take over Kerrigan’s role as Plant Manager and to help direct the company’s capital investment.
This allowed Kerrigan to focus on melding Alpha Poly’s rebrand with a new sales approach. “I kept feeling that every time we came into our monthly management meetings we were always looking in the rearview mirror – what happened in the month before,” Kerrigan says.
He brought in an outside firm to review the sales strategy and a decision was made to implement the Salesforce.com CRM tool. At the time, Kerrigan explains Alpha Poly was generating healthy but flat annual revenue growth of around six percent. “We started setting targets for everybody and measuring,” he says. “People want to do better, but if you do not have anything to measure you do not know how well you are doing.” A sales roadmap was put in place to steer away from a shotgun approach and instead focus on what constitutes an ideal Alpha Poly customer.
In its most recent fiscal year, Alpha Poly experienced year over year revenue growth of slightly more than 20 percent. “We know where we are going because we can see everything in our pipeline,” Kerrigan says. “We can do accurate budgeting now… plus you have metrics that everybody is looking at.” The reinvigorated sales structure is also supported by a new business-development approach led by Kate Davis and former HP Canada trailblazer Debra Swift.
The February 2016 arrival of Vaughan Campbell, former owner of Mikia, who takes on a prominent technical sales role with Alpha Poly, helps establish one of the strongest senior leadership teams in Canadian flexography, with a technical and strategic ability to reach into completely new flexo markets. One of the most promising aspects of Alpha Poly’s new direction is that it currently only generates around five percent of its business from the United States.
With all of the investments in people and technologies, Kerrigan continues to focus on bottom-line growth. “We have to keep this cog going and we have really invested in this team to help us,” he says. “Our next goal… I would like to see in the next couple of years a 10-colour press in here.”
Just as most people might be shocked by the invention age of inkjet printing (1951), toner printing (1959), and laser printing (1969), the birth of 3D printing traces back to 1983 despite its new stature as the beginning of a third industrial revolution, opined by futurist Jeremy Rifkin three years ago. Today’s potential of 3D printing, also commonly referred to as additive manufacturing, is based on its sudden widespread accessibility, akin to the consumer-level arrival of the Internet in the late-1990s despite its 1969 roots laid down by ARPANET.
The availability of mature 3D printing technology now falls into the hands of revolutionary business leaders who take enormous risks to disrupt legacy markets and to ultimately generate new revenue models. In the west end of Toronto, Steve Cory, President of Objex Unlimited, is one such entrepreneur who has been exploring the possibilities of 3D printing since 2011. He has built a worldwide name for Objex developing innovative scanning booths, unrivalled 3D figurines, creative and industrial prototypes, and by diving headfirst into any potential 3D arena his team of young engineers, artists, programmers and writers can imagine.
Growth of Objex Unlimited
Cory found his way into 3D printing after reading what he describes as one of those big-future articles in The Economist, highlighting a 3D-printed chainmail glove and working clock. He became obsessed with the implications of additive manufacturing and for six months researched the sector, attending a handful of local 3D-printing enthusiast meetings.
In mid-2011, Cory, at age 35, had been running his own consulting business for more than a year. A problem solver at heart and a trained mathematician, he had built a successful career by leveraging Information Technology to manage production, including a 100-person plant making sprockets and roller chain; catering facilities at Pearson Airport; and with the document-destruction company Shred-it.
“I was always a good manager because I had better information than anybody else,” Cory says. “I would go get it myself, because I was really good at understanding ERP systems, pulling the data – optimizing it.” Computer Integrated Manufacturing exploded across the business world in the 2000s and Cory in 2009, with the recent arrival of two young children, decided to use his attractive skill set to branch out on his own. He became bored, however, with the tedious routine of sitting around the kitchen table and developing process solutions in Excel.
Cory in September 2011 made a seminal decision to invest around $100,000 to purchase a used 3D colour printer and to lease a 3D plastic printer, followed three months later by his first scanner. “It took three months to complete my first order, which was $200,” he says, “and it took me another two months to sell a $50 order to a guy who still buys from me all the time.” Cory also began to serve as a distributor of 3D technologies to sustain his more inventive plans for 3D printing. As fate would have it, the second handheld scanner he sold was to an influential Toronto businessman who would soon become a silent partner in Objex Unlimited.
“I wasn’t really looking for a cash infusion at that point,” Cory says. “I was ready to muddle through for the next coupe of years and grow slowly as revenue permitted, because I knew it would take time.” The cash infusion, however, allowed Cory to dream even bigger, broaden Objex Unlimited’s 3D printing assets, and begin to hire and train a unique collective of employees to push the frontiers of commercializing 3D applications.
“My business partner feels a big responsibility to give back and we are both very proud of the jobs that we have created here… 26, 27 jobs and probably 15 of these people would not have jobs like this,” Cory says. “They are extremely intelligent and talented, but maybe they didn’t go to the right school or maybe they are a little too wacky to survive in a normal working environment.” Cory prides himself on the creative atmosphere at Objex, which, to take from his own long-term business mantra, is very likely fostering future leaders of Canada’s 3D printing industry.
Exploring the future
Objex Unlimited today primarily uses Multijet Modelling, Fused Deposition Modelling, Stereolithography and 3D inkjet technologies, in addition to a range of ancillary equipment, to meet almost any non-metallic prototyping or modeling needs. This includes printing with carbon fibre and Kevlar additives.
“Prototyping is the reason 3D printing exists, because there is nothing better to make one-offs [particularly] if it is a small part with high detail,” Cory says. “When I started Objex there were three or four other 3D printing companies in Toronto all very strong in the automotive industry.”
Understanding it would be difficult to push his way into auto-part prototyping, where engineers supply great geometries but are naturally picky, Cory instead took a risk to focus on more creative 3D printing. As a result, Objex Unlimited is likely the most diverse 3D printing operation in Greater Toronto, probably Canada, running 14 machines. It affords Cory an unprecedented perspective – as both manufacturer and distributor – for what the 3D market can bare.
“There is a lot of really good marketing out there that makes it look like you can get a $1,000 printer and make parts for the Space Station,” he says, adding most people entering 3D simply do not understand its many critical manufacturing nuances, such as how difficult geometries are to reproduce, working with negative space and support materials, or why Z-axis builds provide little product strength. Cory explains any 3D printer between $20,000 and $50,000 is really a starting point to figure out how 3D works.
“A good 3D printer is $100,000 and they go up from there – it is capital intensive,” he says, reinforcing the need to take a long-term approach. Objex Unlimited itself – albeit on a unique path of 3D discover – is only now beginning to realize meaningful return on its investments, expecting to generate anywhere from $5 to $6 million in revenue by the end of its current fiscal year.
Cory explains the growth of 3D-print portals, driven by machine utilization, ganging jobs on a printer bed via online templates, presents significant challenges. “I really feel, that in some ways, 3D printed parts are disregarded by people because they have had bad experiences with them – poor quality, bad results, because everybody is chasing that low cost and lowest cost is not the right way to do it.”
He describes building an aluminum extrusion for a window, as an example. It might take three hours to print the part upwards on the Z-axis, but it can be easily snapped. If the window part was instead built lying down, this would require filling its negative space with support materials (later torn away or dissolved) and it might take seven hours to print, but the part actually bends because its lines are built horizontally on the X and Y axes.
Leading the way
Cory and his team are now a few months into an ambitious project to produce thousands of 3D figurines. Selftraits is an Objex-owned storefront studio on Queen St. West in downtown Toronto selling 3D selfies starting at $120 each. Selftraits leverages one of Objex Unlimited’s key R&D programs, a 3D scanning booth that employs 140 synchronized SLR cameras and vast amounts of intellectual property, from electronics and lighting to focusing tools and data transfer. The system was built by two 24-year-old Objex employees, who are now working on a fourth iteration of the machine, which Cory calls The Cobra and will sell for around $250,000.
“Everybody tells me our photo booth is overkill: ‘Why would you use 140 cameras when 60 is fine.’ It is to reduce the digital sculpting time,” Cory explains. The Queen St. store opened on December 10 and scanned about 300 people to make 5-inch-high figurines before Christmas. “I don’t think anybody in the world could have done that – not just scanned but delivered.” Cory hopes Selftraits will be scanning 500 to 700 people per month this summer. “It is both exciting and scary because we are proving a business model that you can have a free-standing store to make [3D] selfies and actually make money.”
Objex is now working on a mobile booth to scan dozens of people per hour at major events, in addition to high-profile art installations, which will place the Toronto company onto an even bigger 3D world stage.
At the age of 17, Vinay Tewathia, after a high-school co-op placement with a local print brokerage, began to build a printing business in the basement of his family’s home. He initially designed and brokered print, developing a business model around the high-impact possibilities of modern production technology.
By 2004, Tewathia founded New Era Print Solutions and focused on adding value to print through special finishing treatments. He acquired New Era’s first major press in 2012 with a Heidelberg DI. This August, as he was in the process of doubling his shop’s space from 3,200 to 6,400 square feet, to accommodate a 29-inch, 5-colour Heidelberg press with coater, PrintAction spoke with Tewathia about his passion for print.
This article originally appeared in PrintAction's September 2015 issue.
Why have you invested in a 29-inch press?
VT: We already have one Heidelberg machine. We have windmills and letterpresses where we do all of the finishing, from foil stamping, embossing, offline UV, and the OPP laminations and more of the specialty stuff. So we are just expanding more on the production side… we are known as higher-end printers within our local community. So the whole point of us acquiring the machine is so we can take on more and more, not outsource as much and be cost effective for the current brokers that we are dealing with.
Why focus on high-end print?
VT: Everybody knows how to get a quick postcard, business card or flyer done, but a lot of people get stumped or have questions when it comes to creating something with a foil stamp or adding a finish or some sort of elegance to the job.
Starting from the age of 17 and coming up in this industry, you are young and see how traditional technologies can be married with new technologies, so you just try to create something different and use new looks and feels.
Why print instead of digital media?
VT: We are in both. Print has been the stronger revenue for me. It is kind of where I started… I did a lot of the design for free [in the beginning] just to get the work flowing, incorporating it into my print price. What I find today is that digital is becoming more and more over-saturated and people want that tangible good in their hands and that is why we went the route of specialty and high-end finishing versus just everyday print production.
How significant was the DI press purchase?
VT: Purchasing the DI was probably the best move we have ever made… it is probably why we are in the position to now acquire the 5-colour Heidelberg. Without the DI, I just had a digital machine and we were outsourcing so I would always have to gang things up on a bigger sheet. It was very tough to offer different stocks and types of jobs, outside of just ganging things up and trying to make a profit.
How will the 29-inch format help New Era?
VT: A lot of the work I outsource now is to 40-inch machines and I find this is a happy medium to bridge the gap between outsourcing jobs and keeping them in-house. I am hoping the Speedmaster will allow us to do pretty much 95 percent of our work in-house... we definitely anticipate becoming a lot more profitable.
How will the facility expansion help?
VT: Right now in our one side we have the DI, three letterpresses, offline UV coater, OPP laminator, a folder and our cutter, with a whole bunch of skids and paper on the floor. We are now putting the press on the other [newly expanded] side with all of the paper, which will give us an easier workflow and customer-pick up area on the current side.
Why do you have such optimism for print?
VT: Everybody has new challenges and new things they want to do and I always feel like we are helping them out. Sure, printing is a tangible good, but I also feel like it is a service industry because you are serving people who have needs on a daily and weekly basis… to be honest that is what drives me all of the time… driving for success, trying to get bigger and better companies through our door.
What key print challenges are you finding?
VT: A lot of the market is underselling and undercutting each other and the truth is if the bigger companies put their heads together and stabilize costing I think it would really revive where print can go in the next five to 10 years. I think print is being undervalued and that is a significant challenge.
What is the risk with this new press?
VT: It is just over a half-million-dollar investment… the biggest one we have made thus far. It is the most critical time, being at an age where I am, but I feel it is going to get us over the next hump in business.
Why invest in offset, and not digital toner?
VT: Offset is traditionally what I have been dealing with for the last 14 years… I still feel like it is going to be almost impossible to replace conventional offset machines. There is still going to be a need for bulk work and specialty work; and you are still very limited when it comes to digital machines. The investment on a brand new digital machine to me is too risky... I know what I can produce, create and generate with this offset machine.
Craig Riethmacher grew up surrounded by the business of large-format printing, with his father being one of the founding shareholders of Middleton Group back in 1952. Middleton today is a unique printing operation in Canada, based on its move into merchandising more than a decade ago and a continuing drive to deliver the rich quality of screen printing through two massive, 4-colour, UV-enabled inline presses, and four single colours.
Middleton was also among the country’s first screen printers to dive into inkjet printing, taking on a 4-bed-per-hour Inca Eagle 44 press in 2005, followed three years later by a 10-bed-per-hour Columbia Turbo. In late-2010, Riethmacher led Middleton’s purchase of a massive Agfa M-Press Tiger press, which produces up to 170 beds per hour.
In March of this year, Middleton replaced its Columbia Turbo, after running it for seven years, with Canada’s first Inca Onset R40-LT UV inkjet press. Before touring the company’s impressive 50,000-square-foot printing plant, Riethmacher sat down with PrintAction to discuss the growth and direction of Middleton Group.
The following article was originally published in PrintAction June 2015 issue.
Historically, what was the largest technology jump for Middleton?
CR: When I worked on the presses we switched from solvent-based inks to UV inks. That was a really big jump, because it just changed everything. It changed all of our equipment and all of our processes.
What were the early days of digital like?
CR: The speed was horrible compared to screen-printing, so it was really limited in the beginning... But it was beautiful when it came out – just so slow. The biggest bonus was the lack of prepress compared to screen.
Why did you invest in the new Inca?
CR: The Inca is so good for us because of the type of work that we do; having to do those thick substrates and edge-to-edge printing and now we can do whites and spot gloss clears, so it is a really good press and it fits our shop.
How much has printing white advanced?
CR: It is great. We are screen printers so we have had that luxury of doing digital and putting a screen ink on the back or vice versa, but you still run into some weird curing issues... We went through a good amount of R&D on that, so to be able to just send in a sheet and have it come out with white on is great.
Will digital inkjet replace screen?
CR: Ten years from now if they keep going as they have in the last 10 years, we are going to be running some pretty speedy digital presses. I don’t think you will ever replace screen 100 percent, but it will get close. I do feel there will always be a place for screen.
What percentage of your work is screen versus inkjet?
CR: We do more digital. I would say probably 60/40. It is very much quantity related too. Larger jobs that are over 500-plus sheets tend to go screen – depending on what the job looks like. Sometimes we will look at the artwork and realize it is going to be very difficult to produce screen, like some jobs with fine light colours that have really low percentage tones where we are going to pull our hair out trying to achieve colour, so we just put them on the digital press.
How important is print today at Middleton?
CR: We are definitely not just a printer anymore with all the permanent display work we do, but we still like to boast that we are a pretty darn good printer. We always have been and I think we always will be about quality. We will take the extra step to make sure our quality is well above average before it goes out the door.
Do you feel the competition of commercial printers getting into wide-format inkjet?
CR: Yes – when we were just screen-printing, it was just us and three or four other big competitors. That became five or six as digital started and now there are people with [digital] in their garages, nipping away at things.
There are so many types of digital. So, what we tried to do here was not become a so-called digital shop where we have other processes like roll-to-roll. We buy digital equipment that compliments our screen print and it makes us a better large-format printer – better at what we do best and what we sell best.
Will you scale up the R40-LT over time?
CR: We have the M-Press, which really pounds out the prints and it wasn’t that we were looking for another print pounder… The LT was perfect for us because it is four times faster than the Turbo. Even at the base model and quality is exactly the same whether you have the full R40 or not. We will definitely be looking to scale up the press moving forward.
How much of your sales is from merchandising versus print?
CR: I would say about a 60/40 split with printing still being higher… Print is very competitive. We are going to get what we can, but if we really want to grow our business we have to grow it on the merchandising side, while still being a great print provider. That is really where our focus is... helping the bottom line.
Cenveo McLaren Morris & Todd is home to some of the most knowledgeable technicians, managers and salespeople in Canada’s printing industry. Nearly three years ago, one of these key assets, Steve Hanley, set out on a career-defining journey with one of his key sales clients aiming to mass-produce a groundbreaking baby-formula label.
After months of collaborating with the client, testing inks and coatings in Germany, covering financial plans with corporate, Hanley and Cenveo MM&T’s journey materialized in late-2013 with the installation of a 14-unit Heidelberg Speedmaster XL 106 sheetfed press. The more than $6 million investment, unique in its printing configuration and automation, is rivaled in approximation by only a handful of such high-end presses in North America.
Holding one of the most interesting histories in Canada’s printing industry, from its origins of producing Hallmark Cards to its role in establishing the worldwide phenomenon of the Trivial Pursuit board game, the new 14-unit Heidelberg press is pushing Cenveo MM&T along an impressive growth path in pharmaceuticals, where packaging is often as important as the formula.
Hallmark and Pursuit
MM&T was acquired by Cenveo, then operating as Mail-Well, 17 years ago, adding yet another important marker to its 59-year history in the Canadian printing industry. Headquartered in Stamford, Connecticut, Cenveo is a $2-billion company operating in the management and distribution of print and related offerings. The company is overseen by one of modern printing’s most dynamic businessman, Robert Burton Sr., who has been Cenveo’s Chairman and CEO since September 2005 – with sons Mike Burton serving as Cenveo’s COO (June 2014) and Rob Burton as President.
Cenveo encompasses more than two-dozen entities in over 100 facilities. It employs more than 270 sales associates in North America, with additional entities in the Dominican Republic, India and Thailand – 8,100 employees in total. It acquired a Canadian printing gem with the acquisition of McLaren Morris & Todd, co-founded in 1958. One of those original builders, John McLaren (in association with Harry Morris and Art McLaren), secured greeting-card producer Hallmark as a massive customer for its sheetfed presses. Greeting-card production would come to represent 25 percent of total company revenues by the early 1960s.
After being purchased by Southam in 1967, which brought in web-offset presses for direct-mail and advertising work, MM&T would soon enter the spotlight by working closely with the creators of Trivial Pursuit, Chris Haney and Scott Abbott, to manufacture their world-record board game. (Today, more than 100 million copies of the game have been sold in 26 countries.) The original Trivial Pursuit had 6,000 questions on 1,000 cards – a printing risk with a world of potential benefit. MM&T’s early involvement with Trivial Pursuit led to an expansion of the facility to a total of 115,000 square feet.
Building on its greeting- and Trivial Pursuit-card knowledge, and moving with the 1980s boom in collector cards, MM&T shifted its expertise into label work. This application direction was emphasized after John Morris and Alan George purchased MM&T from Southam in 1995. In 1998, they sold their company to Mail-Well, which, after combining with acquisitions led by Robert Burton Sr., became Cenveo in 2004 – resulting in Cenveo MM&T (CMM&T).
A year later, CMM&T installed its first 10-colour flexographic press to dive deeper into label printing. This was soon followed by the installation of a 7-colour full web Goss press. The newest direction for the facility is positioned squarely at feet of the Heidelberg XL 106.
Research and testing
Before the Heidelberg XL 106 was purchased, Hanley visited Germany on three separate occasions to test out the printing units, twice with Heidelberg and once with KBA. The CMM&T team sent over specific inks and did thorough press testing on behalf of their client before pulling the trigger.
“Part of the testing in Germany was to prove it to Cenveo’s corporate leadership, ‘Here is where the client wants to go, here is where I got them, and this is the press that is going to do it,’” Hanley recalls. Hanley himself established the protocols for how the files should be tested, which took place on three different substrates in each of two main application categories, cartons and labels. “Heidelberg was very excited about the project too, because it highlights what they do.
“KBA is a very capable press as well,” explains Hanley, who was impressed with both high-tech factories, but the XL 106 better fit CMM&T’s application and long-standing experience with Heidelberg machines.
The purchase of the press was based on the baby formula producer signing a 5-year printing contract with CMM&T. It was the first such press configuration that Heidelberg has produced. “It is a duo press with flexo and offset capabilities, 14 units, all UV capable, extended dryer. It is a very unique packaging press in the world,” says Hanley. “We had faith in Heidelberg to deliver the product.”
The Heidelberg press arrived in Mississauga literally by 17 tractor-trailer loads. “Heidelberg knows what they are doing, so there were no issues with it at all,” says Peter Zamos, who has been with MM&T for 31 years and led the technical implementation of the press into the plant. Leaving the feeder, sheets first travel into a flexo unit where a premium liquid silver foil is applied, which is key to reaching the client’s graphic goals for its new baby-formula label design. “The advantage of putting it on in the first unit is then you can tint it and it will look like foiling.”
This immediately raises technical challenges in a press run, but the liquid foil is a highly efficient route for long-run label production, as opposed to applying traditional mylar (metallized polyester film) or other forms of foil. The baby-formula work is now produced in a single pass at very high speeds. “There is an unknown factor with a raised plate when you are trying to marry it to a lithographic plate in the next units,” explains Zamos, describing fit and trapping issues when breaking from the conventional wisdom of putting the opaque colour down last.
Zamos feels the capabilities of the Heidelberg press are almost like a return to the craft of printing, including the file preparation of Autumn Graphics, a specialized flexographic prepress house from London, Ontario. Autumn Graphics has been working with CMM&T and this client for approximately 20 years. “You are trying to fit transparent ink around an opaque shell without having a visual problem,” he says. “From a client’s perspective, there is a craft to that.”
Leaving the flexo unit, sheets travel through two drying stubs before reaching the offset units, coating and drying units. Karl Cox, who took over as the lead of CMM&T’s facility at the beginning of 2015, agrees with the artistic value that the new press brings. “The art aspect of it is not only in how we look at the colour and how we get to the quality, but how we run the press efficiency at its maximum speeds,” he says, continuing to point to how business flows into the press, scheduling its run and labour to meet the expectations and needs of the facility.
During his early research, Hanley also had to consider how the printed labels would fit into the client’s packaging line. “A key challenge is to run at high speeds and to reach the proper coating gloss levels to have it run smoothly through the customer’s lines at high speed,” he explains. The production team is targeting a superior gloss level of 90 and is currently just below this high standard, while also committing to run with a delta E of two or less (well below the normal standard of delta E 3).
“This was Steve’s passion. He believed this is what this organization needed and went for it – the proof is that he got it right,” says Cox, Regional Vice President, Sales and Operations at CMM&T. “It is exceeding the ROI that we positioned for the press when we brought it in. We are ahead of schedule. It has been a massive success for us as an organization.” Cox explains the press has already attracted new clients and he expects more. “We first wanted to perfect our art as a business with the press, before taking it to market for new opportunities. We are really at that point now.”
This strategy fits well with CMM&T’s historic approach of working with high-end, demanding clients. “We used to print for Hallmark Greeting Cards. It was our first account and Hallmark has always been a very quality-oriented company,” says Zamos. “If you are going to buy a card for $6 you want it to be perfect and their quality levels are almost at pharmaceutical levels... Really, it is nothing new for us.”
In addition to closed-loop colour, the Heidelberg XL 106 includes auto inspection cameras with pharmaceutical-specific PDF architecture to capture an image of each sheet – and dreaded hickeys – at press speed, to mark and pull errors from the run.
Printing and mailing
Cox joined Cenveo in January 2014 to implement structural change at the Clixx Direct Marketing facility in Scarborough, which Cenveo purchased in 2010. After more than a decade of Cenveo’s growth through acquisition, Cox is tasked with consolidating processes and to capitalize on individual assets at CMM&T. Cenveo is divided into three groups: Packaging, which includes CMM&T; commercial print; and the envelope group, as a result of the Mail-Well acquisition. After acquiring the assets of National Envelope in 2010, Cenveo became the largest envelope manufacturer in North America.
“We are starting to see an improvement in mailing,” Cox says. “That provides us with huge opportunities... We can essentially print in this facility and then add variable aspects at the Clixx facility. The two facilities work very well together.”
One of Cox’ first moves at CMM&T was to bring in a lean manufacturing black belt to drive further efficiencies. The facility has been deeply involved with both external and internal auditing processes since 1996, when a client’s new Request For Proposal approach required partners to be Good Manufacturing Practices (GMP) certified.
“We took it on very aggressively… and we passed every audit they could throw at us,” says Hanley, noting the baby-formula market has higher standards than most pharmaceutical sectors. “It really highlights the importance in the quality of printing and in every aspect of the quality of that product.” Concern for quality control in the sector came to a head about five years ago when several infant deaths in China were tied to contaminated baby formula products of the country’s domestic suppliers.
“We have a platform that we can grow with a lot of different products and services that meet the needs of our customers,” says Cox. “That is what really impressed me [about CMM&T]. We have a great team here.”
Hanley is one of the top salespeople in the Canadian printing market and he sees an enormous opportunity ahead, because of the new 14-unit Heidelberg press. “This is the defining moment of my whole career,” he says. The packaging industry is still largely comprised of small entrepreneurial businesses and Hanley expects many mergers and acquisitions are ahead, mirroring the past decade in commercial printing.
“There are some challenges on the commercial side from a margin perspective and there are different types of challenges in packaging,” says Cox. “We have opportunities for margin and growth potential through the development of new products, the installation of new presses, and in the innovation that we have brought to market with this press. That is where we see opportunity.”
The town of Altona in southern Manitoba holds slightly more than 4,000 people in an economic landscape primarily driven by farming- and agriculture-based businesses, as well as the manufacture of books. In early March, the town became home to one of the world’s three 8-colour, 73-inch manroland R900 HiPrint XXL perfecting presses, which Friesens Corporation is leveraging for short-run book work.
Most presses of this size are saved for the packaging sector, where perfecting is usually not needed to print on both sides of the substrate. Of course, Friesens’ press also required significant inline colour management tools to deal with a massive sheet that will often hold 64 unique and different pages at one time. The company is well known by other printers for its near-spotless pressroom and by North American publishers for its ability to print short-run, colour-intensive works of art.
“I never want to lose the underdog mentality that has existed as part of the fabric of this company for 107 years. We are in the middle of nowhere, but that just breeds ingenuity and hard work,” says Curwin Friesen, CEO of Friesens Corp., which provides an ownership model for its approximate 600 employees, tying the highly respected book manufacturer even closer to the community.
When the R900 arrived in Altona by dozens of tractor-trailers, it was too large for Friesens’ shipping bays and the company needed cut a massive hole into the side of the building for direct entry into what would become a newly configured pressroom. Installed, the press is approximately 100 feet long and weighs half a million pounds. Before commissioning the press in July, celebrated with a ribbon-cutting ceremony with hundreds of staff members and around 75 dignitaries, Friesens conducted three and half months of set up and testing.
The decision to go with the R900 was made a little more than a year ago, after first discussing the possibilities of moving to very large format technology at the drupa 2012 trade show in Germany. It would be a challenge to handle such a large sheet and perfect it without marking, which can be a technical struggle even with 40-inch perfectors.
“It is very much an efficiency play and a progression from where we have moved in our history,” says Friesen. The company began working 8-page signatures, four pages on each side of a sheet sent through the press twice, drying twice before folding. When press technology improved the crew moved to a machine printing 16-page signatures, again twice through. “In the late-80s, we went to 50-inch format when others were on 40-inch format and that allowed us to go to a 32-page, 8 ½ x 11 signature.” The press sheets still traveled twice through the press, but the company’s 50-inch machines were printing a 64-page children’s book with just two sheets and four make-readies.
The new 8-colour, 73-inch manroland R900 perfector allows Friesens to print a 64-page children’s book with one sheet and one make-ready. The relative efficiency of the new press, over the 50-inch machines, is increased by anywhere from 300 to 400 percent, with a more precise number expected after more time with the R900 reveals figures like wastage, press speed, and finely-tuned make-ready – with the latter number ending up slightly more than a quarter of 50-inch machine make-ready.
“There are hardly any book manufactures in North America who are running 50s and almost none overseas. It is basically a 40-inch world and we live in the 50-inch world and now we are trying to live in the 73-inch world,” says Friesen. “Is it more efficient – absolutely. Are we excited about the productivity numbers we are starting to see – you bet we are. Since the ribbon cutting, every week is getting better and our crews are getting more familiar with it, more comfortable.”
The multi-million-dollar technology investment included the purchase of a massive Maxson Automatic Machinery Co. precision sheeter, because Friesens has traditionally converted its own stock, which now sits about 15 feet in front of the press.
A new large-format platesetter – about 65 feet long in its own controlled positive air space – is also close by and integrated with robotics to move the massive 73 x 50-inch plates – in addition to 50-inch plates – through the imaging process, before a specialized conveyor is wheeled about 10 feet to modified catwalk rails where crews finally touch the plates for mounting on the R900.
The manroland R900 configuration is also unique because Friesens’ management decided to maintain its bindery set-up for 32-page signatures, resulting in an inline slitter system integrated with the new press, as well as the continuing interest in 50-inch machines. “One of the other things unique about this press is that we put an engineered pit underneath it, so we have better access and that is not done anywhere else in the world,” says Friesen, noting how much the company’s mechanics were involved in the R900 investment project.
“The beauty of it is that we were starting from scratch and our goal was to create the most-efficient pressroom in the world and everything mirrors this mindset,” says Friesen.
Despite its massive size, the efficiency of the press and pressroom allows for incredibly short runs of around 4,000 books and up, with an ideal range at around 10,000. “We are a short-run book manufacturer that is what we specialize in within our book division,” says Friesen. The company already produces long runs that may measure around 100,000, but the R900 also presents a new opportunity to provide sheetfed press quality on some lower-end Web offset press speeds.
“Books are not DVDs. Books are not music. Books are different. As we see with business cards, some players in the market believe that business cards are going to be around forever and they certainly do not seem like they are going away,” says Friesen. “One large player has also used large format on short-run business cards to change the game.”
Friesens generates approximately 55 percent of its revenue from the U.S., which Friesen has noticed picking up because of the lower dollar, and 45 percent domestically. Based on various avenues of research, he notes the book market has been very stable for the past five years, to the point where independent bookstores are growing for the first time in a decade. Friesen explains it appears the concentration of e-readers has hit a saturation point in North America. “E-books have their niche and have an important role in the book business, but not the only role,” he says. “Publishers see that sales are bearing that out and so we continue to believe there is a strong future for books.”
Friesen describes one recent report from Deloitte based on polling a sample of 18 to 24 year olds who exhibited a strong propensity toward printed books. “Despite the fact that they live in a digital world they still like print for a bunch of reasons.” Friesen is also noticing more on-shoring of book printing, relating that many publishers are returning to North American printers instead of having the work done in China.
The trend is driven by much busier Chinese ports and the need for shorter turnaround times, as well as more preference to print lower run totals; for example, two 5,000 jobs instead of 10,000 at once. Friesen explains it is not in a printer’s best interest to print 10,000 books and have the publisher only sell 2,000. “Is China still going to be a big printing force – absolutely – but if five percent of that business returns, or 10 percent, on a billion-dollar industry, that is significant.”
In addition to its strong roots in yearbook production, typically with runs measured in the hundreds, self publishing is a growing sector for Friesens, through its FriesenPress division that sells packages – potentially with editing, copywriting, designing and proofreading services in addition to printing – that might cost around $3,500 run on digital presses instead of $15,000 via litho.
“We believe that we are going to be in books for a long, long time and if we are going to be in books then we better be geared up for it and not just dabbling,” says Friesen, projecting a relatively stable market for at least the next decade. A little more than five years ago, however, Friesens’ managers were tasked with expanding the company’s interest in packaging, which resulted in think4D, consisting of around 40 employees.
After purchasing a Toronto company and related patents, and investing a few million into R&D, think4D is a unique operation in the world that marries thermoforming and printing. “We found thermoforming and print were two different worlds,” says Friesen. “With some of the technologies we were researching, we thought that we could combine those worlds. Why not print on the plastic and then thermoform that piece out of the plastic already printed.”
This innovation in packaging is built from a culture that developed over decades by leveraging technology to innovate the process of manufacturing books. “It isn’t always just the numbers we paint on press at times. There are efficiencies and robotics and workflow… yet the product we are producing is an art piece, often at the end of a creative chain.”
Five years ago, Webcom Inc., one of Canada’s preeminent book manufacturers for three decades, began building a true evolutionary printing platform around HP’s new T300 Inkjet Web Press. Webcom’s paradigm shift, a fundamental change in the basic concept of book printing, now represents an investment of $30 million and a 2.1-billion pages-per-year digital inkjet manufacturing capacity the Toronto company.
In October 2015, Webcom continued to illustrate its intent on shaking up the book-publishing world by installing a new HP Indigo 10000 press. PrintAction spoke with Mike Collinge to learn more about the direction of a Canada-first platform.
What key advantages does the Indigo 10000’s 29-inch format size provide?
Mike Collinge: It allows us to do larger-format products that you cannot do on smaller systems, whether it is a [traditional] Indigo, NexPress or iGen, basically they all are suited to 11 x 17-type products and, in books, that limits you with spines on books and jackets and oversize book products. It also allows us to double our throughput, so we are able to respond much quicker in peak periods, which publishing has. Third, it allows us to cut a lot of the processing and labour expenses in half because we are producing at least twice as much as we could before every hour.
How does the 10000 fit with Webcom’s existing HP Inkjet Web Presses?
MC: With digital inkjet and an HP Indigo 10000, we are able to offer our customers cost-efficient, offset-quality, short book runs of tens, hundreds or a few thousand books at North American – if not globally – competitive rates… all very, very efficiently.
How does this platform best help clients?
MC: The unique solutions we offer help a publisher pull their capital investment out of keeping inventories and redeploy that [capital] so it is not stagnant in a warehouse… It also helps them customize books for small markets… or, with a backlist title on the end of its lifecycle, our technology allows a publisher to keep products alive.
What growth is available for web inkjet?
MC: Inkjet still has a really positive outlook for the next five years. The industry studies say over 20 percent CAGR in digital inkjet and one of the top two drivers of that growth rate is targeted to be books. So it is a high growth part of the book manufacturing business. It is not all necessarily new business for a manufacturer or publisher… but it is definitely a fast-paced, high-growth segment for the publishing industry.
How difficult is it realize enough margin for large digital-printing investments?
MC: It is not just about printing a physical book and shipping it to the door. We are addressing supply-chain and inventory-management needs and customer integration. We have a lot of investment in systems, people and process… rationalizing and automating our customers’ order entry processes is part of our solution.
Has Webcom moved from unit-cost print?
MC: It is a total cost of ownership model that we take to our publishers and they need to look at more than just a print and bind… we are not quote-and-produce vendors for them. We are business partners.
How does Webcom leverage inkjet colour?
MC: Inkjet technology is so flexible that you can put colour on two pages in a 400-page book and not have to make sure that it is on a certain form or signature… When a publisher is looking at how to differentiate their product in a very competitive marketplace, whether an educational publisher or trade, colour is an underutilized capability because the print community has made it expensive and awkward. Inkjet really addresses that for short run products.
What is the outlook for printed books?
MC:[At November’s BMI conference] Markus Dohle, CEO of Penguin Random House, said, “Our basic strategic assumption is that print will always be important, always – not in 50 years or 100 years – always.” So the Amazon forecast of the demise of the printed book was, and I still believe is, premature and inaccurate. Digital headlines do not match the reality of the publishing world or what their consumers are choosing for preferred book format.
I am happy that our publishers are still successful and sustaining their businesses, but I think Webcom’s solutions are much better valued if there is urgency on them not to patronize old publishing models.
How does Webcom provide sustainability?
MC: Depending on the product, somewhere between 25 and 50 percent of books printed in the past have gone to obsolescence or recycling. Our technology makes it reasonable for a publisher to print only what they need, only what they have back ordered, without significant premiums… We are buying world-class technologies that have sustainability underpinning them.
How do you qualify the risk of being first with new technologies?
MC: We have a very succinct vision of what we can deliver for book publishers in North America. We have fantastic ownership and a strong financial position to be able to make these investments. I would call them investments, as opposed to risks. Whether it is in technology, process or people, these investments are the building blocks to help us deliver us on that vision for our book-publishing customers.
- Serge Loubier, President of Marquis (photo by Anny Lecault). Serge Loubier, President of Marquis (photo by Anny Lecault).
- Marquis' Kolbus KM 600 in Montmagny. Marquis' Kolbus KM 600 in Montmagny.
- Marquis' Timson ZMR in Louiseville. Marquis' Timson ZMR in Louiseville.
Marquis Book Printing over the past three years has more than doubled its annual revenue through consolidation, beginning in mid-2012 when the company, headquartered in Montmagny, Quebec, acquired two manufacturing plants from TC Transcontinental. The purchase of Transcontinental Gagné in Louiseville and Transcontinental Métrolitho in Sherbrooke added just over $35 million to Marquis’ revenue base, which was around $20 million before the purchase. The company’s employee count went from approximately 125 to 350 people.
Just over a year later, in late-2014, Marquis’ management team reaffirmed its confidence in the book-printing sector by acquiring certain assets of Imprimeur Lebonfon, a former Quebecor plant in northern Quebec, which included bringing over members of Lebonfon’s sales team who were generating about $10 million in business. Today, Marquis Book Printing is generating more than $60 million in annual revenue as one of Canada’s largest independent printing operations.
As Canada’s biggest monochrome printer, running six massive, highly automated Timson web presses in Louiseville, Marquis is also beginning to shift into more colour work to move with the book market. In October, the company’s future outlook for book manufacturing also materialized in an exclusive partnership with SoBooks of France to create a transatlantic technology bridge for on-demand book publishing. The most unique strategy currently being employed by Marquis, however, revolves around a yearlong project to build its own UV-enabled web-offset press, scheduled to start-up this December.
Maurice Marquis founded Marquis Imprimeur in 1937 and quickly began to focus on book-printing capacity after acquiring some rights from European publishers, because books were no longer being shipped overseas during World War II. He even built what was called the Bibliobus, travelling from town to town to sell books printed by Marquis. The company never lost sight of its core competency to manufacture books, a position that was embraced in 2006 through a management buyout by Serge Loubier, who now serves as President of Marquis, Pierre Fréchette, Vice President of Sales, and Marc Delisle, who remains involved as an advisor.
“Five years after the management buyout, we were where we said we were going to be,” says Loubier. “ Then we went all in with the [TC Transcontinental] deal. We pushed all of the chips into the middle.” At the time, Transcontinental, which was moving toward a marketing-services platform, was Marquis’ largest competitor in monochrome and two-colour book printing, which remains as the heart of its operation with newer investments like Canada’s first Variquick PC 15 press and an Oce’ Varioprint 6250. The Marquis platform has also been enhanced with a 10-colour Heidelberg (adding to four- and two-col0ur litho presses), a Xerox Versant and iGen150.
Over the past several years, Loubier has focused on annual capital expenditures of around $2.5 million to purposely build the platform and to support the more than $15 million invested in Marquis’ market consolidation strategy. Initially, Loubier explains the plan – as presented to the banks – was to shutdown the Louiseville plant acquired from TC, now called Marquis Gagné, and move assets to Montmagny to realize savings, but minds were quickly changed after spending time in the facility.
“The employees were like the gold out of the transaction that we made – a really good crew over there,” says Loubier, noting the plant is led by a relatively young workforce that was surprisingly bilingual, being based in a francophone region of Quebec. “The heart couldn’t live with the idea of closing [Louiseville] and we had also miscalculated the space needed to produce big runs of books… we didn’t have enough floor space, in my mind, in Montmagny.”
With a potential relocation to Montmagny, Loubier was concerned the skilled Timson operators and well-trained salespeople and CSRs from Louiseville might not join Marquis. This was the case when the Sherbrooke plant purchased from Transcontinental was closed, which also showed Marquis was ultimately going to do what was necessary to succeed in its consolidation plan. He worked with Louiseville’s union to settle on a 15 percent cut and a five-year contract, saving about $1 million per year in costs, and targeted opening up more business in the United States to support the plant.
At the time, Marquis was generating about $400,000 in business from the U.S. and the management team set an ambitious growth target to reach $4 million. “In the first year, we managed to bring in $5 million from the U.S.,” recalls Loubier, noting this was at a time when the Canadian dollar was at par with the U.S. greenback. “It has been three years since the deal and we are going to finish this year over $15 million [generated out of the U.S.].”
Loubier is now comfortable in stating that the consolidation plan has worked out well. In explaining its success, he points to the stability provided by the Montmagny plant and its unique Marquis Laurentien division based in Quebec City. Purchased about a year prior to the Transcontinental deal, Laurentien was the province’s largest producer of school agendas and number two (behind Marquis) in yearbooks. With the TC Metrolitho deal, Laurentien became number one in both categories.
The Laurentien division has about 40 employees focusing on the typesetting and graphic design of books, particularly in the educational sector, including working with more than 1,000 schools. Marquis is now growing its work with schools in other Canadian provinces and again focusing on expansion in the United States.
Largely based on the dollar advantage for Canadian exporters, and a stabilized book-printing market, following a few years of uncertainly around the potential impact of electronic publishing, Marquis is now shifting toward more organic growth for its printing platform. “For the next three to five years, our plan is to double that capital investment,” says Loubier, hinting this will likely point toward putting more sheetfed power into the platform, integrated finishing, and also new inkjet web press technology currently being investigated.
“We need [inkjet] technology that will accommodate monochrome with a click charge that we can then switch to a colour click charge,” says Loubier, noting Marquis’ unique need to maintain high-volume monochrome production as it looks to the future with colour. “I also want to be able to choose my paper, to change it, and I want to print like offset… I thought [press makers] would never achieve it, but they are starting to show me things.”
Loubier also remains intent on running what Marquis knows best – “a big press is hard to beat” – and the company’s vital litho systems are highly automated. “My average run at Marquis has to be 3,800 to 4,000, so my big concern is not the speed of the press when it is running. It is how long it is stopped for,” he says, describing a recent run of 1,500 books with 144 6 x 9-inch pages that took just under 15 minutes to print. “We have Timsons in Louiseville with zero makeready. We do not stop to change the plates.”
In the more immediate future, however, Loubier is eager to start up the web press invented by Marquis. The eight-month project has been led by Alain Roberge, former owner and Director of Lebonfon, because of his engineering background and years of experience in web-offset production. An outside firm provided schematics for the 16-page press as Marquis planned out its interior, including the integration of a brand new closed-loop colour control system. In November, the company was adding folders and preparing to take the press apart for moving and reinstalling in Louiseville.
“We wanted a press that would do four-colour without heatset. The ink will be dried by UV lamps, so there will be no emanation and no gas involved in the process. It is going to be the greenest colour web in Canada,” says Loubier. “I like machines, so building my own press was always a dream.”
In early 2015, Prime Data of Aurora, Ont., became the third company in North America to install a Delphax Technologies Elan 500 press, built in nearby Mississauga using a sheetfed inkjet architecture with Memjet Waterfall print heads and a transparent Mylar substrate transport system. Supplying data-driven marketing services for more than 15 years, Prime Data’s initial goal with the Delphax system was to reduce inefficiencies associated with printing offset shells for post variable imaging.
Prime Data’s Elan 500 installation is unique because it is producing variable colour marketing materials, whereas the other two Elan systems are primarily printing monochrome collection notices (California) and government forms (Quebec). With its world-first printing position, Prime Data has been transforming itself to operate more like a tech startup to mirror a growing shift toward marketing automation.
“We have a mantra around here, everything is always in beta… to have a tech startup mentality and keep that in the place to make everyone feel comfortable with change,” says Steve Falk, owner and President of Prime Data.
Over the past couple of years, Falk has instituted several initiatives to embrace print, which currently accounts for approximately 30 percent of his company’s revenues. These strategies range from investing tens of thousands of dollars in security measures to new CSR tools and from cross-media consulting to variable full colour printing with sheefed inkjet.
The Memjet print heads employed by the Elan have 70,400 jets that fire up to 700-million drops of ink per second, hitting resolutions of up to 1,600 dpi, on a range of coated and uncoated substrates with weights from 60 to 350 gsm and format sizes from 8 x 8 to 18 x 25.2 inches. This translates into printing up to 500 A4 images per minute.
“The biggest thing [the Elan] did was simplify the process of doing batch-run direct mail, so we did not have to worry about offset shells… being able to roll it into one process where you go straight to colour imaging at an affordable price,” says Falk. Prime Data continues to leverage both colour and monochrome Konica Minolta systems for shorter-run applications. Falk explains, however, today’s highest-end toner presses produce upwards of 150 colour sheets per minute in simplex mode and are not fast enough for Prime Data’s larger variable runs. It would require multiple million-dollar toner machines to eliminate offset shells.
“There is only one sheetfed inkjet printer right now and it is the Canadian-made Delphax Elan,” says Falk, noting roll-fed inkjet options from companies like Canon Océ and Ricoh do not fit with his current client base. “For our marketplace, [with a need] to change stocks and sizes several times a day, for the run sizes, sheetfed inkjet is perfect.” Falk explains the Elan produces full variable colour at around the same price as printing offset shells for variable imaging; while also reducing workflow issues by a factor of days. “This business is also big on testing,” he says, which is cost prohibitive when printing offset shells to reach segmentations of 1,000 households.
The ability for Prime Data to leverage data expertise through responsive print helps mitigate the risk of being the world’s first Elan user for variable colour DM. “You should not be looking only at print quality, which is what people once cared about, but you should be focusing on the quality of the print message and how it is responding to [consumers],” Falk says. “The quality of responsiveness to the person you are talking with is what gets you better sales.”
Prime Data has developed proprietary tables and subroutines for cleaning up client data, sweeping vast fields to find potential VDP campaign disasters. “Data can be a nightmare and it can be a relationship killer if you do it wrong.” Falk estimates Prime Data might spend as much as four times the effort relative to competitors when working with customer information – and charges accordingly.
The data-sensitive marketplace led Falk to make large investments in securing Prime Data’s processes over the past two years. This involves measures like building and testing firewall security, entrance swipe cards, non-disclosure agreements, destroying computer and printer hard drives, and chain-of-custody procedures for overprint and setup sheets. The growth in marketing automation also relies on securing data transfers with tech-savvy clientele.
“What you want to do if you are a [printer] is think about how you can interact with how your clients are saving their data,” says Falk, “so communications back and forth, grabbing data at certain milestones in its lifetime.” This environment also pushed Prime Data to establish a CSR-driven customer tracking system to respond to issues immediately, which also helps to drive the company’s always-in-beta mentality. Employees are always improving their internal systems.
Falk feels the new emphasis on online data collection has hurt print, as agencies try to hold on to as much marketing budget as possible, running email and social media campaigns. “Even though this sector has been active for over a decade online, and tried all kinds of things, they can only close 10 percent of their deals online.” He is seeing more interplay of print and online marketing automation.
“For the first time, I had a couple of people come to us and say, ‘We are missing part of the puzzle and it looks like you guys can help us. You can talk our language, take our digital world and add a print piece to it,’” says Falk, stressing the fit of the Elan press. “We are going to grow with this new piece of equipment. We would like to see two of these in here. With the trajectory we are on right now, we will probably make that happen pretty fast.”
Alain Paquette, together with a silent partner, purchased Artcraft Label three years ago and set out to modernize the Burlington operation, leveraging its experienced team and position as a producer of high-quality pressure-sensitive labels. Founded in 1977, Paquette took over the operation from John and Edna Robinson, who grew Artcraft from a sticker business to an award-winning prime-label manufacturer.
Stepping away from his established career with technology suppliers, Paquette saw huge potential in Artcraft’s strong market position to institute significant operational changes to drive out costs. With his own background in lean manufacturing, investments were made to improve all aspects of the business, from the shop floor to the entire IT system.
Paquette focused heavily in establishing Artcraft’s prepress department, through Esko’s HD Flexo system, including a CDI imager and powerful new imaging software. The move adds more control over Artcraft’s high-quality printing platform housed within a 20,000-square-foot facility. The plant is meticulous in its cleanliness and order and primed for the future, which is likely to include contracting out prepress work, which currently accounts for a very small percentage of Artcraft’s revenue.
What potential did you see in Artcraft?
AP: I realized the market was changing so we came up with a plan to really optimize it… everything top to bottom… all of the software, computers, everything was all redone. We reinvented the whole ERP system. All of our stock is barcoded, for example.
How much cost have you driven out of Artcraft?
AP: We have managed to drop our operating costs substantially by optimizing. Of course, we now have a little less staff... and as a result, we crossed trained a lot of staff to be interchangeable.
How was Artcraft’s print work when you bought it?
AP: The knowledge, the quality, everything was already in top shape. There was really not much work to do there. Those improvements come with time.
What has surprised you most getting into this market?
AP: I saw quality from a manufacturing eye, not from a printer’s eye... there is a lot more that goes into this. [It] was a big eye opener.
Are prime label clients overly demanding?
AP: We search for the ones who are the most particular. It is not just for the margins, but you protect your space a lot better… where not many others can follow.
What is the shape of Canadian flexo?
AP: The funnel comes down very, very fast and we are all sitting at that same size. I call them the single-owner type. There is going to have to be some consolidation at some point, if you want to get efficiencies up. We are at the point where we are starting to eye the market to see who can we work with to create growth.
What are your plans in terms of M&A?
AP: We are looking to acquire… We have set up Artcraft so you can take our installation, especially with what we have done in prepress, and easily double or triple it without that much strain.
How did you revamp prepress?
AP: We installed Esko Flexo HD. We are noticing with recent demands and SKUs that you really have to push the quality. We do not have offset presses, but you have to get yourself there and basically we are now.
Do you plan on offering prepress services?
AP: We actually do plates for a few other label printers, primarily out of province. With the locals, there is always [a] trust issue, but we are not out to take business.
What applications are you focused on?
AP: We are a good player in specialized high-quality segments. Our focus is local and regional – a 200-kilometer radius.
Beyond prepress, where else have you invested in technology?
AP: In finishing – our flexo can run silk-screen inline, which not many can do in the area. We are present in health and beauty where there are a lot of the requirements to have more than one screen… We found with HD Flexo that we are eliminating some screens now.
Are you planning to invest in digital print?
AP: We have small digital capabilities right now. We call them our helpers. For us, we just really haven’t seen the value. I know there is payback, but the volumes needed to sustain a million-dollar investment is no walk in the park. There are still a lot of limitations in digital technology.
What future goals do you have for Artcraft?
AP: We want to see growth as a good mid-level shop and we are going to get there. It does take time and we are probalby looking at anywhere between a 5- and 10-year window, but right now the architecture is done. We have a team in place that can transfer knowledge and we will start growing from there.
The full Q&A article with Jay Mandarino can be found in PrintAction January 2015
It is hard to argue against stating Jay Mandarino, President and Founder of the C.J. Group of Companies, is the most-visible personality in Canada’s printing industry. By being so engaged in the community, particularly in the hypercompetitive environment of Toronto, he is as much a sounding board for insight as a lightning rod for criticism.
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