PRIMIR Releases Mega Printers Study, Announces 2009 Research

RESTON, VA—January 28, 2009—A recent PRIMIR study entitled “Mega Printers' Impact on the North American Print Market” is now available. Merger and acquisition activity among printers in the graphic communications industry has resulted in a new breed of printer – the "mega printer.” These “mega printers” appear to do business differently than their smaller brethren on many different levels.

To learn more, PRIMIR commissioned Sherburne & Associates with J Zarwan Partners to explore their business practices. Additionally, PRIMIR wanted to learn the long-term impact of this continued consolidation on the overall industry – what's driving these large-scale acquisitions, impacts on vendor companies servicing these “mega printers,” and the overall expectations for the industry at large.

According to the report, “This group of companies (with over $750 million in annual sales) represented $32.584 billion in revenue in 2007, and comprised more than 30% the commercial print market. While overall revenues for the “mega printers” declined during the study period of 1999 to 2007 by about 6%, they represent a growing share of a declining commercial print market. Thus, not only are “mega printers” themselves increasing top-line revenue, but they stand to play an ever-larger role in the rapidly changing North American commercial printing industry.”

When you 'look under the hood,' the study revealed some striking findings. While more efficient buying practices are a hallmark benefit of these large companies, in reality it appears they are neither more efficient manufacturers nor more efficient purchasers.

Additionally, many consolidation economies-of-scale are being offset by increased organizational complexity, loss of flexibility, murderous competition for shrinking sales volume and correspondingly relentless pricing pressures. The public companies have the added complexity of the pressures of Wall Street to deliver increased operating and net margins results.

The research found that each “mega printer” operates very differently, however, in most instances purchasing decisions for capital expenditures (presses and equipment) are on a schedule and planned well in advance but decisions come from corporate. Other equipment, software and supplies and consumables like paper or ink may be decided at the plant level sometimes with geographic or shipping considerations in mind (but with a limited number of suppliers on the preferred list).

With the current economy, there is no doubt that the merger and consolidation activity will continue, and the few successful/profitable “mega printers” will serve as role models for the others. Although the number of firms in the industry is declining, the research team reported that the remaining firms should demonstrate a healthier printing industry.

The study “Mega Printers' Impact on the North American Print Market” was released exclusively to the PRIMIR members in early 2008 and is now available to other industry participants for $4,500. For order information or to view a table of contents of this comprehensive study go to: www.primir.org.

PRIMIR also announced three new research studies for 2009 are underway.

Benchmarking and Worldwide Market Trends for Flexographic Printing
This worldwide study will benchmark 2007 and provide drivers for change in flexographic printing through 2012 by region. The study will investigate trends in flexographic printing and will cover newspapers, packaging, tags & labels, envelopes, folding cartons, corrugated, flexible film and foil. It will provide data on the number of presses in use by width and market segment, run lengths by application, make ready, number of colors/coatings, and benchmark related consumables in flexo printing. It will evaluate trends from the packaging marketplace and provide a forecast of this market segment through 2012. LPC Consultants will complete this study for a late fall 2009 release.

Global Trends in Packaging Affecting North American Converter & Supplier Markets
This study will identify global packaging trends that impact the North American converter and supplier markets. It will identify drivers and barriers and demographic, environmental, or regulatory issues influencing the printing process, package preference and the point of origin. The study will specifically delve into labels, folding cartons, corrugated, flexible and retort pouch packaging and specific substrate and coating requirements. The study will evaluate food versus other packaged goods and identify the package specifiers' future needs. The research is underway with State Street Consultants and will be completed in late summer 2009.

Global Trends in Printing and Writing Papers
Regional (worldwide) coating differences cause printing technical issues. This PRIMIR study will evaluate regional paper qualities/properties/specifications and standards in use today and provide a forecast for 2012. It will examine print quality, distribution channels and trade flows (capacity today and forecast for 2012). The study will also investigate the value of coated paper vs. other substrates as well as press and other consumable requirements to print on coated papers for SOHO print devices, proofing, digital, direct imaging, offset, rotogravure and web offset printing. A key deliverable of the study will be results from testing various papers from around the globe. Pira International is conducting this research that will be released in late summer 2009.

For information about these or other PRIMIR research studies or membership details, contact Jackie Bland, PRIMIR Managing Director at e-mail: jbland@primir.org, or phone: 703/264-7200. Visit PRIMIR on the web at: www.primir.org.

About PRIMIR
The Print Industries Market Information and Research Organization (PRIMIR), provides in-depth research and analysis for the graphic communications industry. PRIMIR research is funded by member dues as well as through support from NPES. PRIMIR annually provides over $600,000 in current research studies including relevant market data and detailed information on graphic arts and related fields. Members also benefit from meetings, market research skills building, and robust networking opportunities.