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By Kevin Keane, IAPHC CEO Hiatus? "I've missed your insightful, compelling analysis the past two weeks. Have you taken a vacation or have I fallen off your distribution list?" John Goddard, Executive VP, PrimeSource Corporation. Our thanks to John and the many other faithful Tuesday Morning News readers who have inquired recently. No issue of TMN was scheduled the week of January 26 (we announced as much in the TMN of 1-19-99) and last week we were derailed by a particularly virulent bug. Our sincere apologies. Behind the Bar (Codes) From the February 1999 Smithsonian magazine, describing the adoption of the Universal Product Code in 1973: "Twelve digits run across the bar code's bottom, topped by 29 light and 30 dark lines that render those digits into a laser scannable computer language. The first digit defines broad categories: produce, health-related items, standard packaged foodstuffs. A nonprofit corporation called the Uniform Code Council assigns a five digit sequence to a given manufacturer, such as the number "30000" for the Quaker Oats Company, while the manufacturer doles out subsequent five digit units of UPC to identify different products and sizes. Thus a scanner will read "30000 06110" as a pound of Quaker's Cap'n Crunch cereal, or "30000 01020" as an 18 ounce container of Old Fashioned Quaker Oats. The final UPC digit ensures that each one of the passing items has in fact been correctly scanned." The News from A to almost Z Apple. Apple reported on 1 February that it is moving production of the iMac computer out of its plant in Cork Ireland and move it to a plant in Wales owned by a Korean firm, LG Electronics. The iMac has been a stylish success for Apple but no amount of Irish blarney could forestall the move of the plant. The Irish Development Agency has dispensed some $21 million dollars in aid to Apple since the firm first set foot on the Emerald Isle. Then on 7 February Apple said it would take a $9 million dollar charge for costs associated with contracting out the manufacture of the iMac to LG. It turns out the deal allows Apple to transfer inventory risk to LG. Adobe. John Warnock, CEO of Adobe Systems was interviewed in the February Smart Money magazine. "Q. So how much Windows business do you have these days? Warnock: Our efforts to achieve a presence in Windows have been paying off. We now get 58 per cent of our revenue from Windows based products, up from 56 percent last year. Q. How have Apple's improving fortunes since the introduction of the iMac helped Adobe? Warnock: Apple's recovery is total upside for us. We're the largest software provider to Apple in terms of revenue -- bigger than even Microsoft." Business Cards. Colin Campbell of the London Club in Ontario sent along an interesting article from the January 25th Business Monday. The essence of the item is the trouble printers are having in the digital world, to find room on the lowly business card for all the information clients now expect, including cell phone numbers, and voice mail and e-mail etc. The article notes that Digital Card Inc., out of Langhorne, Pennsylvania, has developed a business card that is shaped like a credit card but works like a CD-ROM. The front of the card holds the same type of information found on a standard business card, but the CD-ROM aspect can store brochures, catalogues and audio information. Canada's Paper and Pulp Industry. John Kohnke of the San Francisco Club sends along a report from The Canadian Pulp and Paper Association. The trade group says it expects Canada's shipments of products such as newsprint, printing and writing papers, packaging materials and wood pulp to increase by 2.4 per cent in 1999. "That could look like a rather bullish forecast, but if you look at operating rates, you can see that we're still expecting a tough year," according to Kevin McElhatton of the Association. The reason for the concern is that the pulp and paper sector needs to run at nearly full capacity to be highly profitable. Production capacity in 1998 was 87% and is expected to rise to about 89% in 1999. Canon, Inc. On 9 February Canon announced a notable strategic shift when it said it would begin removing territorial restrictions on dealers and resellers such as IKON Office Solutions and Danka Business Systems PLC. Canon hopes that the dealers and resellers, once free of the former restrictions can help push Canon's line of digital machines known as the imageRunner family. Eventually, the dealers and resellers will be allowed to sell Canon's entire product line. Obviously, Canon hopes to make some inroads on Xerox's dominant market share. Consolidated Graphics. What again? Yes, again. Consolidated Graphics announced at the end of January that it intends to acquire still another printer in the $5 million sales range. This time the new member of the Consolidated family is CMI based in Chicago. Danka Business Systems PLC. On 22 January Danka announced that it plans to eliminate approximately 450 workers in the Rochester, New York area. Not surprisingly, many of the affected employees formerly worked at Eastman Kodak in the Copy Duplicating Products division before Danka acquired the sales and service portions of Kodak's copy business in 1996. Danka has also been able to extend its short term credit facility with Kodak for the provision of parts and supplies. Electronics for Imaging. On 8 February EFI said it had entered into a product development arrangement with IKON Office Solutions, which will allow IKON to provide unique printing and workflow solutions for digital copiers and printers. The first such product is called the enhanced Command WorkStation which is designed to manage multiple copier/printer systems configured with EFI RIP technology by consolidating and centralizing functionality through job preview, multiple document merging and copier printer load balancing. "EFI's vision is to marry high quality, short run color printing with black and white jobs for everyone, everywhere ... any time," said Mark Lee, VP of Sales for EFI. EyeWire. EyeWire, Inc., headquartered in Calgary, with US offices in Dallas (formerly Adobe Studios), said on 1 February that it is putting together a one of a kind resource for the 500,000 plus global graphic designer community that will provide visual content -- such as video, animation, photography, type, illustrations and clip art -- and related graphics software, products and services within a single Web site at www.eyewire.com GRACoL. Look for the release of Version 3.0 of the General Requirements for Applications in Commercial Offset Lithography (GRACoL) coming out in May, 1999. The new version will contain all-new material on digital printing (from design tips to choosing paper) plus multiple updates in many of the categories, including a completely rewritten section on digital file formats. Imation. Many folks in the printing and graphic arts industry continue to wonder what role the company borne of 3M innovation, Imation, will play in our industry's future. At the end of January, Imation reported that its operating results were likely to be in the breakeven range, and said that the results were impacted by several factors including a higher than anticipated seasonal market slowdown in its photo and printing and publishing businesses. Mail-Well, Inc. After a brief respite, Mail-Well is resuming its acquisition campaign. On 2 February, it completed the purchase of Colorhouse, Inc., a Minneapolis prepress firm with 1998 sales of $20.7 million. On 4 February Mail-Well announced that it had bought Hill Graphics of Houston, Texas (a.k.a. Champagne Fine Printing.) Moore Corporation. Perhaps joining the consolidation trend, on 3 February Moore announced that it had purchased an equity stake in Quality Color Press of Edmonton, Alberta. Quality Color is said to be a leading print management firm in Western Canada and gives Moore a strong commercial print presence in that region and the Northwestern US. "Combining Quality Color's digital print capabilities and knowledge of print on demand with Moore's strength in forms and labels will give us a strong competitive edge in Northwestern North America," said Tom McKiernan, executive VP of Moore. PrimeSource Corporation. On 28 January, PrimeSource said it had completed the consolidation of its recent acquisition of the graphic imaging group of Bell Industries. The firm expects that it will enjoy cost savings of more than $5 million annually commencing with 1999 as the result of the alliance. Quebecor Printing Inc. Also on 28 January, Montreal based Quebecor Printing said it enjoyed record 4th quarter results. The quarter saw the divestiture of Quebecor's cheque and credit card businesses. Meanwhile the firm significantly upgraded its equipment in the US markets especially in its rotogravure operations. Quebecor now operates in Argentina, Canada, Chile, Colombia, Finland, France, Germany, India, Mexico, Peru, Spain, Sweden, the US and the United Kingdom. (See next item about Vio). Scitex. It's been an exciting few weeks for Scitex. On 18 January the Gartner Group issued its report listing reasons why Xerox would be likely to pay $17 a share for Scitex the Israel based digital printing concern, as has been mentioned in several recent issues of TMN. "We believe that by the end of 1999, Xerox will acquire a major interest in Scitex and that by the end of 2003, Xerox technology combined with that from Delphax and Scitex will enable Xerox to introduce its own high speed color engine." Yet on 2 February an Israeli executive was quoted in the Globe business daily in Tel Aviv as saying that negotiations to sell to Xerox are frozen. On 3 February, Scitex reported increased revenues and earnings for the fourth quarter. There were two items of interest in the Scitex announcement. First, is that sales in its Digital Printing division continued to grow, and the firm began deliveries of an expected $20 million of digital printing systems to Caisse Nationale d'Assurance Maladie des Travailleurs Salaris (CNAMTS), the health segment of the French social security system. Second, is this quote from Yoav Chelouche, CEO of Scitex: "We are also very excited about Vio, our joint venture with British Telecom which creates a global high speed wide band telecom network to serve the graphic arts and printing industries....Quebecor Printing Inc. has chosen Vio to provide an international data communications service to its worldwide customers." The market for global data transfer already has a well known provider called WAM!NET. Silicon Graphics. Silicon Graphics Canada said it selected Toronto based Magra Computer Technologies to develop an e-commerce web site to market its Windows NT Visual Workstation product line to the Ontario printing and publishing market. This is the first time that Silicon Graphics workstations will be available for sale over the Internet to Ontario printers. Standard Register. On 26 January Standard Register announced that it was forming a Commercial Print Unit which will include the Secaucus, New Jersey facility it currently operates and the soon to be purchased DuPont printing and publishing operation in Boothwyn, Pennsylvania. Standard Register was one of the first to embrace the 'distribute and print' model several years ago when it created its STANFAST division. It now has a network of printing facilities and sales offices across the US. Sun Microsystems. First Java, now Jini. Late in January Sun announced that some 3 dozen top flight electronic technology companies are licensed to make products using Sun's Jini Software. Jini allows devices to link up in networks. For example, a digital camera could instantly send a photograph to a printer to make a copy. "The personal computer isn't the center of the universe any more," said Sun CEO Scott McNealy. Among the licensee firms are Canon, Eastman Kodak, Sony and Xerox. Unisource Worldwide, Inc. According to The Philadelphia Inquirer's January 28th edition, Unisource has filed a lawsuit against four former employees, alleging that its earnings could be reduced by $5 to $8 million in 1999 because of lost business allegedly diverted from Unisource's Websource division to a new business formed by the four employees. The month of January saw the stock price of Unisource resemble a perfect bell curve, starting around $7.00 a share and ending in about the same range, after briefly rising to $12.00. Union Camp. On 8 February, International Paper Company won approval from the European Union to complete its purchase of Union Camp. The deal will put IP back in the number one position of paper companies worldwide, just ahead of the Scandinavian conglomerate known as Stora Enso Oyj. Xeikon N.V. On 3 February, Belgium based Xeikon, appointed a well known Japanese ink manufacturer, Sakata Inx, as the distributor of Xeikon digital color print engines through-out Japan. This is Sakata's first foray into digital production printing.
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