The Situation of the German Printing Industry and
the Future of Print Media from the Perspective of
the German Manufacturers of Machines
Kai Büntemeyer,
Chairman
VDMA Association of German Manufacturers of Printing & Paper Technology
Managing Partner of KOLBUS GmbH & Co. KG
Ladies and Gentlemen,
I am very pleased to be able to speak to you on behalf of the German engineering industry today in order to give you a brief glimpse into the present situation of the German printing industry and to explain our vision of the future of the printing industry.
I am talking to you today in my capacity as chairman of the VDMA Association of German Manufacturers of Printing & Paper Technology. In the industry, I am holding the post of Managing Partner of Kolbus, a company manufacturing bookbinding machines and inline postpress production systems with a workforce of approx. 1300.
1 INTRODUCTION/ BRIEF PRESENTATION
The German supplier industry for printing and paper
Sales: 8 billion Euros (2008)
No. of staff: approx. 50,000
Export share: more than 80 %
The Association of German Manufacturers of Printing & Paper Technology has 122 members representing 90 percent of the German machinery manufacturers for the printing and paper industry and covering the total value chain from papermaking to paper converting, printing and postpress processes. Total sales of our industry amounted to approx. 8 billion Euros in 2008; the number of staff is approx. 50,000. With an export share of more than 80 %, Germany is the leading supplier of machines for the printing industry world-wide.
The share of German manufacturers in global exports for printing house equipment is approx. 42 %. The German manufacturers of machines wish to remain among the technological leaders in the world and at present invest on average approx. 4 % of sales in research and development activities. As far as the manufacturers of printing machines are concerned, this percentage is above average and approx. 6 %.
2 THE GERMAN PRINTING INDUSTRY IN FIGURES AND FACTS
Basic data of the printing industry
|
|
Germany (2008) |
EU (2005) |
|
No. of companies |
11,200 |
130,000 |
|
No. of staff |
174,000 |
870,000 |
|
Total sales |
24 billion EUR |
100 billion EUR |
German Import of printed products: approx. 1.9 billion �
German Export of printed products: approx. 4.6 billion � (in first half year of 2008: 2.3 billion)
With a more than 20 % share in total sales, Germany is the largest location of the printing industry in Europe. Together with the UK, France, Italy, Belgium, the Netherlands and Spain, 80 % of total sales of the European printing industry are made. Quite a substantial portion of print products are exported to EU countries.
The German printing industry holds a strong position in the printing of catalogues and magazines (902 general magazines, 1172 trade journals), in book production and top quality finished packaging products. There are 376 daily and weekly newspapers and approx. 1400 ad newspapers.
The largest German printing companies are media groups and other groups of companies which partly have printing plants all over Europe.
One example of a large printing company is arvato Bertelsmann, one of the largest book producers of the world printing 800 million books per year and employing approx. 4000 staff.
Large offset printing companies have up to 900 staff. Only about 6 % of the German printing companies have more than 50 employees. These companies, however, employ 55 % of the persons working in this industry and make approx. 50 % of total sales of this industry.
Medium-sized companies with more than 20 employees mostly have up-to-date equipment and are very competitive. These printing houses are mostly full-service providers, i.e. they can handle all sub-processes all along the line from prepress to postpress in-house. Along with print production, the leading companies in Germany now also offer additional services in the data management and logistics segment.
Printing companies in Germany broken down by size
|
No. of staff |
No. of companies |
Share in % |
|
1 – 19 |
9114 |
83.3 |
|
20 – 99 |
1532 |
14 |
|
100 – 499 |
272 |
2.5 |
|
500 and larger |
18 |
0.2 |
|
Total |
10.936 |
|
The German printing industry is, however, also characterized by a large number of small and micro companies. 84 % of the companies have fewer than 20 employees. For these companies, making sufficient profits in order to be able to invest in new equipment is often a problem. As a result, they have difficulties in keeping up with the technological development. The reasons are manifold: The price pressure while costs are rising, credit problems, inadequate cost accounting, and capacity utilisation at any price, to name just a few. Nevertheless, there are also many successful companies among the small companies in Germany. As a result of comprehensive investments in increasingly productive machine technology, there are now excess capacities in some segments of the printing industry, above all in sheetfed offset and gravure printing. The capacity utilisation of many companies is not satisfactory. In October 2008, the average capacity utilisation of the German printing companies was approx. 81.9 % while it should be approx. 86 %. Due to the fierce price war in recent years, every year approx. 2 – 3 % of the German printing companies were forced to announce their insolvency. In the years 1998 to 2005, approx. 19 % of the micro companies with up to 9 employees vanished from the market.
The largest technological changes in recent years occurred in prepress as a result of the digitalisation of the processes. In the course of the last few years, the majority of companies changed over to computer-to-plate. Typesetting is frequently done in-house at the customers` site already. The prepress departments often only carry out data preparation and output. While completely linked production environments based on JDF (Job Definition Format) can only be found in a few companies, the digital workflow in prepress all along the line to the printing press settings has become standard practice in all larger companies now.
3 THE SITUATION OF THE GERMAN PRINTING INDUSTRY (2008)
Since 2008, the German printing industry has been affected by deteriorating framework conditions. They include the present economic crisis, energy cost increases over recent years as well as the high value of the Euro.
Development of business bvdm
The present economic trend has an immediate effect on the printing industry and, as a result, the supplier industry. Uncertainties regarding the order position and the lack of credit commitments are manifesting their effects in the form of cautious investment activities of the printing companies.
Nearly 2/3 of the total production value of the German printing industry consist of advertisement-related products like catalogues, advertising matter, newspapers, ad newspapers and magazines. As a result of the world-wide economic crisis, the advertising budgets are being cut. The prospects for the German printing industry for 2009 appear to be rather dim. The German Printing and Media Industries Federation (Bundesverband Druck und Medien) expects sales to go down by 2 % in 2009. In 2008, the sales growth of the German printing industry was still approx. 2.3 %.
Structure of the production values (Source: bvdm)
I would now like to explain the development of the production values by means of selected product groups in more details.
The main portion of the production value of the German printing industry is catalogues and advertising printed matter. The production increase in this segment was 3.1 % and, as a result, lower than during the year before. In the catalogue segment with a share of 6.8 % of the production value; there was a 9.3 % decline in the production of catalogues in gravure printing, while catalogues produced in offset printing saw a + 7.8 % growth. In the segment of business printed matter, a significant rise of approx. 5.1 % can only be seen with securities. Newspapers and ad newspapers decreased by 3.4 %. Book production with a 6.8 % portion in the production value went down by 1 %. As to the development of packaging printing, it is much more difficult to make exact statements. It can, however, be said that the capacity utilization of the packaging printers, e.g. the manufacturers of folding boxes, is excellent. Label production grew 4.3 % during the first three quarters of 2008. While publication gravure printing is decreasing, growth rates can be seen in packaging gravure printing. Packaging made of paper, carton and board showed a 4.6 % sales growth in 2008, with this figure comprising not only folding boxes and displays, but also unprinted packaging products.
Over the last few years, the German printing industry has, unfortunately, not succeeded in completely passing on the price increases for energy and materials to its customers. Partly this was absorbed by internal cost reductions resulting in lower profits.
Products which are not time-critical like books are increasingly printed outside Germany, especially due to the lower wage level. In 2008, the number of companies going into administration was approx. 1.9 %, and they were primarily small and medium-size companies. In the coming months, the German printing companies will have to face the task to maintain their competitive standing through cost reductions and market differentiation.
4 ASSESSMENT OF THE FUTURE OF PRINT MEDIA AND WHAT CUSTOMERS` EXPECT FROM THE MANUFACTURERS OF MACHINES
The future development of the printing market is hard to assess and will differ depending on the product segment and region.
Nevertheless I would like to try and make a short assessment of the future of print media from the perspective of the German manufacturers of machines.
Advertising printing
We are convinced that printed advertisements will continue to be an integral part of the future marketing mix. In Germany, the focus of advertising spending (24 billion US$) is on press media accounting for 60 %, online media only account for 4.3 %. Various studies have shown that print advertising has a longer-lasting effect compared with advertising through electronic media.
Book production
Book production is characterized by an increasing number of titles while the number of copies is decreasing, therefore, there will be a demand for more flexible production technologies. No doubt, some of the books will in future also be available as e-books. It is expected that in 10 years time their share will be approx. 15 %, i.e. a large part of the books will still be printed in the conventional way. Particularly for high-quality books, offset will be able to take advantage of all its strengths.
Newspaper segment
In the newspaper segment, decreasing circulations and decreasing advertising revenues will require innovative business ideas, cost cuts and changes in the machine concepts. Future developments will be aimed at the fully automated newspaper printing press. More flexible machines which are able to produce newspapers and advertising supplements (semi-commercials) will enable to utilize the capacity of the machines in a better way.
Packaging printing
The best future perspectives in comparison with other print segments can be seen for packaging printing. The market volume will increase above all in the newly industrialising countries where there is an obvious trend towards top quality finished folding cartons with varnish effects and more colour. In addition, the integration of security technology will increasingly be an important subject matter in order to combat product piracy.
Differentiation on the market can be achieved by more high-quality print finishing. The aim is to create added value and to realise higher prices. For this, UV technology is currently offering a large range of finishing variants. UV technology still only accounts for approx. 2 %, i.e. a small portion of the market, but its market volume is very successfully growing at an annual rate of approx. 10 %.
There is an increasing demand for solutions for the efficient production of short runs and integrated production as e.g. the application of films/foils and punching.
Flexible packaging
As far as flexible packaging is concerned, flexographic printing will gain in importance in comparison with gravure printing. Its share in Europe is approx. 57 %, in South America its approx. 82 %, and in Asia, on the other hand, only 10 %. The advantages are more efficient production of the printing formes and the quality improvement achieved in the course of the last few years.
Challenges
The printing industry is still and will continue to be faced with big challenges; important subjects that we will have to deal with in future are cost reductions by automation as well as environmental protection and resource efficiency.
Important subjects for the printing industry in future
- Cost reduction
- Increased flexibility
- Automation / Networking / Process control
- Environmental protection
- Energy savings
- Waste reduction
- Improvement as to added value (new products, services, finishing)
- Qualification
- Print quality
Decreasing print run lengths in all realms of printing will in future require flexible machine concepts with short make-ready times. Here, quite a lot of progress has been made over the last few years (among others, parallelisation of make-ready processes through direct-drive technology in sheetfed offset printing, presetting and storage of process data in flexographic printing, colour measurement and control systems). Automation makes the machines for industrial production more and more complex. Now, e.g., electronic systems and software already account for approx. 55 % of the value of a sheetfed offset printing machine – the rest is mechanics. In spite of higher automation, there is a consistent need for qualified staff.
Print quality
In coming years, quality will be an important subject for all printing houses. The aim is to achieve repeatable print quality at a high level and reasonable expense. In this respect, the yardstick is the international process standard ISO 12647 whose basic requirements were, through extensive preparatory work, also compiled in Germany. The machine manufacturers will continue to work towards the improvement of solutions for colour control and their integration into the machines. Furthermore, quality monitoring systems will gain widespread use, especially in packaging printing.
The printing process is still influenced by a large variety of parameters. For reliable processes, there is an increasing number of matched material systems and an increasing number of certifications of, respectively, materials and compatibilities.
Consulting and service
Consulting services relating to machine concepts, optimum and ecological process variants, quality control and networking will gain in importance in the dialogue between machine manufacturers and printing companies.
Considering the high hourly rates of the machines, availability is a crucial subject. From the machine manufacturers` point of view, customer services will be expanded. For many machines, remote diagnostics solutions are already offered. They enable to identify the causes of problems and to implement remedial measures more quickly.
Communication in the added value chain
Communication in the added value chain must be improved in future. The printers and bookbinders need more solid information about the parameters of the materials used. In Germany, first initiatives have already been launched with the aim to publish characteristic values for printing paper and to develop measurement methods for printing and printability properties.
The environmental impact of a sheetfed press
Ecological aspects
Increased acceptance of the print product can also be achieved through an environmentally friendly production process.
Although the highest use of energy and the most serious effects on the environment occur in papermaking, the existing printing processes, nevertheless, offer quite a substantial optimization potential. This includes more efficient drying processes, heat recovery, reduction of substances that are detrimental to the environment and human health (IPA and washing agents) as well as energy savings, among other things, in the generation of compressed air.
5 FUTURE OUTLOOK
The structure of the printing industry will change in future.
A segmentation of the printing companies in large industrial companies and small specialist companies is to be expected.
The markets and general conditions for the printing industry will continue to change. Flexible companies that are keeping their costs well under control have the best chances to survive in the increasingly fierce competition. What is required are new strategies, business ideas, applications and technological solutions.
Print production will be prepared for the future competition with electronic media and make full use of its advantages. Print stands for media that are good for relaxing, for orientation, analysis and background information. Printed products are important cultural assets and stand out due to quality, touch and feel.
The media landscape will become more diverse; it will be necessary to find synergies for printing, also in connection with digital printing and electronic media.
Besides investments in the right technology, factors that are getting more and more important for the printing companies are differentiation on the market, excellent customer services, efficient organisation, qualification of staff and full control of the business and management processes.
Printing will continue to exist. What and how much will be printed, with the use of which technology and by whom – these, however, are questions that nobody can definitely answer.
Keywords：论坛
|
