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By Kevin Keane, IAPHC CEO A Giggle (You can't make this stuff up!) One of our members printed an employee handbook this week. This excerpt is just too piquant to pass up: "HardTime Inc., is aware that your position requires physical labor to be performed and that will cause you to perspire and sweat. The company provides you with a shower room and you are expected to use this facility. There is no reason for anyone to be smelling offensively to others. If an odor problem exists, you may be sent home without pay." Finally, an employee handbook that tells it like it is, and wasn't turned to gobbledygook by an over zealous attorney type! The name of the firm has, of course, been changed to protect the innocent (and not so innocent.) Sometimes things are just too fragrant in the Ol' Factory. A New Heidelberg Company On 26 March, Heidelberg announced that it will be forming Heidelberg Digital, a new entity put together in the aftermath of the acquisition of Eastman Kodak's office imaging business and the new digital copier engineered by Kodak and currently called the DigiSource 9110. The new concern will be based in Rochester, New York. Importantly, Heidelberg Digital will also include the NexPress joint venture between Heidelberg and Kodak. Wolfgang Pfizenmaier, who has headed up the NexPress initiative will be CEO and relocate to Rochester from Germany. The COO will be Bernard Schreier. Schreier says: "Heidelberg Digital will concentrate on non-impact technologies." What this means is that the DI presses (Printmaster and Speedmaster versions) will not come under the Heidelberg Digital umbrella, but will remain within the Heidelberger Drucksmachinen AG product portfolio. When the IAPHC held its 79th annual convention in Rochester last year, we saw a lot of Chamber of Commerce materials branding the city as the World's Imaging Centre. Now that marketing slogan may have to be adapted to the World's DIGITAL Imaging Centre. Some might ask, but why Rochester? To paraphrase a line from one of the Godfather movies, you keep your friends close and your competition closer! The Globe and Mail is in your face! On 23 March, a different Rochester digital imaging concern known as Xerox, announced a unique trial program in Toronto, Ontario. For the next two months, the front page of the Globe and Mail newspaper will be replicated on huge billboards in seven high traffic areas in the Toronto metroplex. Each evening, when the front page of the newspaper is ready to go to press at about 1:30AM, a disk with the front page images will be delivered to Xerox. Then the image, now converted to Billboard size, will be taken to two billboard outfits in Toronto whose workers will put up the front page every morning just prior to rush hour. The billboards range in size from 10 by 40' to 14 by 48' "This is a first for billboard advertising," said Karen Hayward, Vice- President, Xerox Canada Ltd. "The campaign proves how the Xerox products have revolutionized digital information technology. It demonstrates the power of Xerox ColorGrafX technology by providing wide format, color printing on demand every morning." Just a reminder that the International Gallery of Superb Printing is accepting wide format ink jet printed entries this year. Although goodness knows how we will be able to set up a billboard for the jury to evaluate..... A Risk of the Rising Tide? Late last week, Bloomberg carried a story about the healthy printing economy. We have been hearing from many of our members who would agree. While not every month is a banner one, in general things are pretty healthy. Perhaps it's the so-called millennium effect, more clients are printing more items in anticipation of the new century. Perhaps it's just a generally robust business climate in the economic engines of Europe and North America and some other regions. One wonders however, if the good times are obscuring the critical structural changes in the ever more digital printing business. "Printers of all sizes are under pressure to do two things: to protect the core lithography that pays the bills, but also branch out into these additional electronic communications services," said Andrew Paparozzi, Chief Economist at the NAPL. But amid good times, and a swirl of consolidations, and clients demanding ever shorter turnaround times, can printers really find the time to think strategically about a changing marketplace? Gerald Mahoney, CEO of Mail-Well was quoted by Bloomberg: "We're basically a printer, ink on paper, and we do it very well. I don't see us becoming any sort of Internet company." Mail-Well has, of course, grown rapidly and successfully through its consolidation strategy. So too have the other big names we have written about so often in the pages of Tuesday Morning News. (TMN) Today, Montreal based Quebecor Printing announced from Barcelona, Spain that it had acquired Spain's second largest printer, a firm called Cayfo, S.A. Cayfo is well regarded book printer which also maintains commercial printing capabilities. Quebecor already has a printing plant in Madrid, as the result of its earlier acquistion of the firm called Altair. Quebecor noted that the printing industry in Spain is developing at a faster rate than in any other European country due to lower production costs and other favorable economic conditions. Meanwhile, the well known Consolidated Graphics, Inc., had an interesting week. In the last issue of TMN we mentioned in passing that the share price for Consolidated Graphics had slumped from $74 in mid-January to $46. The very next day, on Wednesday, 24 March, the New York Stock Exchange asked Consolidated to issue a public statement as to the unusual market activity which saw Consolidated shot up more than 12 per cent in one day. (Pure coincidence, we are sure!) More to the point, was the ringing endorsement for Consolidated issued on Friday, 26 March by BancBoston Robertson Stephens: "We believe Consolidated Graphics is the premier company in the large, highly fragmented commercial printing industry. With its track record of successful acquisitions, above average revenue growth rates and operating profit margins, as well as management depth, we believe that the company should be a core portfolio holding," said Steven DeLuca. And consolidation isn't limited to printing businesses. Also in last week's TMN, we had mentioned the ongoing bidding war for the British digital imaging services firm Wace Group, Plc. As of last week, Schawk, based in Des Plaines, IL had outbid Applied Graphics Technologies. However, on Friday, AGT raised its bid once again and Schawk said it would drop out of the derby for Wace. Nor is consolidation limited to larger commercial printers. "As I noted in our annual report, our growth strategy within the printing industry is focused on the acquisition of larger independent quick printers and operating these as corporate locations. Through this strategy, we can leverage our knowledge, systems and financial resources to grow within the printing industry. Our efforts in looking for acquisitions were bolstered in late 1998 when we hired an outside firm to assist us in our efforts.... The Company has the strong financial resources needed to execute its plans with cash and marketable securities of $9.8 million, no debt and a net worth of $16.3 million," said Robert Sutter, Chairman of IPI, Inc. One wonders if one of the consolidators might not find it valuable to acquire one of the quick print franchise operations. The shake out in quick printing has meant that a goodly number of the stronger franchised quick printers are now multi-million dollar operations with access to growing clients whose need for ever more professional commercial printing is rapidly growing too. Despite all the hullabaloo associated with the consolidation activity, one still wonders how many printers are ready for a more digitally enabled world. The core lithographic business is paying the bills today, but clearly firms like Xerox and Heidelberg envision a different and far more digital future for the wired planet. Other Industry Tidbits On 29 March, came news from Stamford, Connecticut that a copier company set a record with eight machines being named 'Picks of the Year' by Buyers Laboratory, Inc. Was it Xerox? Ricoh? Oce? Nope, it was Pitney Bowes! Even venerable Pitney Bowes has developed a copier line which includes analog, digital, color and networked machines. On 28 March, Xerox Corporation announced that it had acquired SET Electronique, French company which has developed high speed digital printers for use in data center environments (see discussion of Enterprise printing in the past two issues of TMN). The machines are continuous feed which can produce 200 to 1000 pages per minute. The most common applications for these machines are billing and direct mail programs in the financial services, telecommunications and utilities markets. On 30 March, Agfa announced in Cambridge, England that it would be collaborating with a British developmental stage firm called Xaar and the Japanese company Kyocera to bring a wide format inkjet printing head application to market. Remember that Agfa bankrolled some of the initial development of the Xeikon digital printing press as well. On 30 March, Corel Corporation announced that it had inked a deal to include WordPerfect Suite 8 with every motherboard package produced by PC Chips Group. The latter firm is reputed to be the world's largest manufacturer of motherboards. On 29 March The Washington Service published its usual list of largest insider transactions. Several weeks ago we reported to you the proposed merger between Unisource and UGI. Interesting then, that last week the Chief Financial Officer at UGI and a Director of Unisource each invested six figures into the respective firms. On 23 March, Bowater Inc., the world's second largest newsprint manufacturer said it would be cutting back production of newsprint at mills in the State of Maine and the province of New Brunswick. On 26 March, Bowater denied reports in the Seoul Economic Daily that said it would add a second Korean paper mill to its collection of ten mills in Canada, the US and Korea. On 29 March, Adobe Systems Incorporated, announced a free seminar series called "Business Success. By Design" which will be offered in 13 cities in Canada and the US to assist small business users with tips, techniques and tools for creating attractive marketing materials for print and for the World Wide Web. Adobe products including Acrobat, PageMaker, PageMill and PhotoDeluxe will be used in the seminar. Quick print franchisor AlphaGraphics is one of the sponsors of the seminars. For more info about dates and cities, call 800-230-8993 or visit www.asmcorp.com/adobe Our newest International Gallery of Superb Printing sponsor, GretagMacbeth announced in mid-March that it had acquired Viptronic S.r.l., located in Brixen, Italy. Viptronic manufactures a broad range of color measurement instruments. In specific, the acquisition enhances GretagMacbeth's densitometer and spectrophotometer product lines. Viptronic has been sold in North America under the Beta label.
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