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| Sector Comment: Printing |
Globalisation and consolidation have combined to make the printing sector one of the most volatile of global markets, writes Christian Humphreys
Recent decades have witnessed a radical transformation following large scale consolidation and restructuring — a pattern accelerated in recent years with the opening to international competition of new and increasingly important markets in Eastern Europe, China and Russia.
The search for ‘scale and scope’ economies by large print manufacturers, combined with the difficulty of smaller ones to sustain the investment race, has also lead to an increased level of competition.
Many large businesses in the sector have seen company takeovers and investment in the past 12 – 24 months. It would seem that some printers who have been struggling, have taken the option in a depressed market to consider acquisitions of smaller companies within the same printing niche to acquire market share and capacity. This in some cases gives access to larger contracts and adds to the company’s robustness in challenging economic times.
We are of the strong opinion that major printers tend to be in a healthy negotiating position should the threat of insolvency or insolvency scenarios arise. Customers are unlikely to have an alternative source of supply — certainly not in the timescales they would require to negate an affect on their own business and production. Should the customers face a supply problem, the ramifications could be serious enough to impact dramatically on their own businesses.
From our own recent first hand experience of the sector, plus experience in general, there is mounting evidence of large sales and investments, both domestically and overseas.
The most likely interest for printing, finishing and later year digital/pre-press plant and machinery has come from principal competitors of major businesses and from Europe, USA, the Middle East and Asia.
With regards to the more specialist equipment, large web offset and sheet reel fed printing presses are valuable but limited in their secondary markets. The sheer size and nature of the machines poses particular problems when remarketing.
With this in mind, we offer opinions that large web assets can potentially take 270-360 days to prepare, market, sell and remove with global reach required.
Finishing (binding, stitching, cutting, folding and so forth), digital and pre-press equipment is much more readily saleable and we have evidence, going to market, that assets in this side of the print industry tend to sell via either live and webcast, or online auction sales over an approximate 120 to 180-day marketing period, dependent on the scale and quantity of the equipment for disposal.
Removal and storage of large web, sheet fed and finishing plant and machinery is unlikely to be considered. It carries a significant cost and storage is highly detrimental not only to the machinery and equipment but also to final realisations. Sales of this type of equipment are therefore best achieved from the customer’s site.
In summary, the market for printing related machinery remains challenging, but for the good quality examples, there are competitive buyers. However, in some cases a desire for additional or replacement equipment is not supported by the availability of funding. This is not a problem limited to printing and thankfully it is an issue, which in the light of early evidence, we see improving.
For all SHM media enquiries contact Tony Garner, at Viva PR
01706 214340
www.vivapr.co.uk |
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