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Return to this Issue Table of Contents
July 5, 1999

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Industry News
By Kevin Keane, IAPHC CEO

Electronic Paper

On 29 June Xerox said it had entered in to a deal to collaborate with 3M Company to bring Electronic Paper to market. Electronic Paper was developed at Xerox PARC and was written about in Tuesday Morning News (TMN) earlier this year. Electronic Paper is defined as a digital document display with the portability of a plain sheet of paper. Like paper it is user friendly, thin, light and flexible but like a computer display it is also dynamic and re-writeable.

The deal with 3M is significant in that Xerox is determined to make certain its inventions at Xerox PARC are mined for their full commercial potential, and 3M has a tradition of bringing innovative ideas to market fruition.

Electronic paper works as follows: the 'paper' is comprised of microscopic white and black beads encased in a plastic sheath about as thick as a file folder. The beads can show alternate colors such as black and white, which can be manipulated in terms of position by electrical charges delivered by a pen-like stylus. Images can be wiped clean and then replaced almost instantly by applying a new signal.

One intriguing aspect to this story is how Adobe Systems will react. As we reported in last week's TMN, on 24 June at PCEXPO in New York City, Adobe CEO Charles Geschke unveiled his firm's plans for a product called ePaper which the firm has apparently already trademarked via an intent to use filing.

A job for James Bond?

Meanwhile in the land of real and tangible paper products the news is global, as yesterday, the big New Zealand based forest products companies like Carter Holt Harvey Ltd., (owned in part by International Paper) and Fletcher Challenge Ltd. said that shipments to Asia were still a little soft suggesting that the paper markets in places like Korea were continuing in a still slow recovery.

On 29 June, Nimonor Investments, based in Britain, said it had sold its stake in a Russian pulp and paper mill at Vyborg near St. Petersburg, which it had obtained in 1997. The Russian paper Izvestiya reported that workers at the mill have been on strike for over a year to protest foreign management and the job cuts they anticipate. A British manager's attempts to reach the mill by helicopter failed and Nimonor gave up the fight. As we mentioned in a TMN last month, International Paper has successfully brought on line a paper production plant near the Russia-Finland border.

The view that paper making will migrate to continents other than North America continues to develop anecdotal proof.

Direct Mail versus the Internet

On 29 June, Pitney Bowes released the results of its Second Direct Mail Study which was conducted by the Gallup Organization. The report says the typical firm allocates 23% of their marketing communications budget to direct mail/catalogs, compared to only 6% for the Internet. Intriguingly, 47% of the surveyed companies which report using the Internet as a communications tool say that the use of online marketing has actually increased their volume of outgoing mail (by an average of 5%).

"As more people flock to the Internet in search of information and to purchase products, physical mail's importance also increases as it has become a major delivery and fulfillment channel for Internet transactions," said Kevin Weiss, Vice-President, Marketing of Pitney Bowes Mailing Systems. "Mail is and will remain the most powerful marketing tool in the world. No one disputes that the Internet is here to stay and will increase in importance. However, when it comes to serious and effective marketing, businesses are voting with their communications budgets - for mail."

That would seem to be a message all printers should take to heart. The brave new online world can be seen as a printing volume enhancer. The key however, will lie in being a print provider who can deliver in any medium, in anywhere, any time.

The current issue of Advertising Age magazine contains this copywritten article penned by Ann Marie Kerwin, titled 'Ink and paper world clicks with online universe':

"Consumers of the new media world soon may have some old media options to accent their cyberspace experience.

Wenner Media plans to launch its Internet-focused title by year-end; Krause Publications and online site eBay plan to publish eBay Magazine in September; and Hearst Magazines is mulling a oneshot women's guide to the Internet next year."

Danka Maneuvers: Bad News/Good News

On June 30 Danka Business Systems Plc., said the deal it had previously reached with Schroeder Ventures to sell its outsourcing division called DSI to Schroeder had been terminated. (DSI means Danka Services International, which provides facilities management and other services worth about $275 million to its clients in the Canada, Europe and the US). Part of what triggered Schoeder to decline to close the sale was the receipt by Danka on Monday, 28 June, of a letter from IBM in which IBM stated: "there is a distinct possibility that IBM may choose to exercise its right to terminate" its agreement with DSI. Schroeder Ventures is part of the United Kingdom's largest independently owned investment bank, so naturally the stock markets hammered the price of Danka's stock for a day or two.

Yesterday, brought some much appreciated good news for Danka. On 5 July, the firm announced that it had begun shipping the Kodak Digisource 9110 Network Imaging System (note that this machine is not merely a digital copier, it's a NETWORK IMAGING SYSTEM). The Digisource is designed by NexPress Solutions LLC (now that Kodak's copier functions have been acquired by Heidelberg) and assembled for NexPress by Heidelberg Digital LLC., both of which firms are based in Rochester, New York.

Wolfgang Pfizenmaier, Chairman of NexPress and President of Heidelberg Digital stated: "We have been working closely with Danka to finalize a long term agreement. We see improvements in their performance each day. Danka's turnaround is very impressive."

Consolidation Continues

The push towards an ever more consolidated printing industry continues unabated. The flurry of acquisitions includes -- Cunningham Graphics International, Inc., announced on 21 June that it had acquired Apollo Limited, based in the Canary Wharf sector of London that has become a financial centre of increasing renown (and part of Cunningham's focus is financial printing); and on 30 June, Mail-Well, Inc., said it was buying Enterprise Press of New York City, marking Mail-Well's entry into the NYC market; and then Consolidated Graphics, Inc., released its salvo of deals: on 30 June Consolidated said it had a letter of intent to acquire Multiple Images Printing of Chicago, as well as T/O Printing of Westlake Village, California, and then on 1 July, Consolidated said it had signed a letter of intent to acquire Anderson Printing of Hollywood, California. The latter firm should not be confused with Anderson Litho which has previously been acquired by Mail-Well.

One impact of these consolidations is the continuing shakeout in small shops (those employing ten or fewer). According to the good folks at TrendWatch (Dr. Joseph Webb and Associates) the number of small shops is down by 1 percent. "Small printers, negatively affected by small-office computing and on-line services that are now used to disseminate the information that was once printed in black and white by these shops, are not attracting new entrants." TrendWatch estimates that the number of shops employing 10 to 49 is up by 1 percent and the number of those employing more than 50 is up by a robust 4 percent.

Miscellany

Applied Graphics Technologies (AGT) said on 30 June it would be shuttering the French subsidiaries of Wace Group, Plc. Wace was recently acquired by AGT.

The UK operations of prepress mainstay Harlequin are in upheaval after the firm indicated it was unable to secure additional venture capital financing. Harlequin is a RIP developer with some 44 OEM partners including such well known firms as ECRM, Heidelberg, CREO, Presstek, Optronics and Ryobi, to name a few. Xeikon uses Harlequin RIP's to drive its digital presses.

Xeikon itself seems to be doing nicely. On 1 July the firm announced it would build new office and manufacturing facilities near Lier, Belgium to accommodate its expected continuing growth.

Presstek meanwhile said it would start offering to sell its DI plates online to US customers visiting Pressteks' website.

TMN Thanks You!

We appreciate the many members who provide grist for the pages of TMN. John Berthelsen, Tony Sarubbi, Cheryl Sunness, Bill Leahy, John Kohnke, and Ray Rafalowski are among those to whom we are indebted for blurbs the past few weeks. If you have something you'd like to share please send it along. We especially would like items from the post-press side of our industry.

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