The Greater Milwaukee Graphic Arts Association

1
The Greater Milwaukee Graphic Arts Association

• Niall Power, President CEO
• Printing Industries of Wisconsin
• November 21, 2006

2
U.S. Print Industry

• Printing is one of America's five largest
  manufacturing industries
• Average growth in print industry is 2-3 per year
• 1.1 million people work in the print industry
  approx. 55,000 establishments
• 2005 sales were - 165.5 billon
• 2006 projected sales - 170 billion
• 2007 projected sales - 175 billion
• Statistics from PIA/GATF Economic Research
  Department.

3
State of Wisconsin - Print Industry

• Printing is one of Wisconsins largest
  manufacturing Industries with 1,040
  establishments state-wide
• Wisconsin is ranked the 7th largest print market
  in the U.S.
• Wisconsin print sales exceed 7.4 billion
• Wisconsin employs 46,000 people in print jobs
• Wisconsins print segment
• InformationalPeriodicals, newsletters,
  newspapers, books, directories, technical
  documentation, financial, legal, and
  transactional
• PromotionalCatalogs, direct marketing,
  advertising, promotional
• PackagingPackaging and labels
• ProductStationary and envelopes, Internal and
  forms, wallpaper, wrapping paper, greeting
  cards, paper plates, etc.

4
Print Sales in Wisconsin

• 1999 6.03 billion
• 2000 6.53 billion
• 2001 6.23 billion
• 2002 6.05 billion
• 2003 6.25 billion
• 2004 6.85 billion
• 2005 7.37 billion
• Statistics taken from PIA/GATF Print Market Atlas
  1999 - 2006

5
Whats Next? Assessing Print Markets in 2006
2007

• 2006 growth in economy is at 3-3.5
• 2007 growth in economy to be at 3-4
• Growth in printing shipments 2006, 2.5 2007, 3
• Loss of 800 plants per year for the next two
  years
• Loss of 20,000 employees per year for the next
  two years
• Profit percentage to remain the same

6
Traditional Printing volume is declining.

• Printers need to adapt to the changing market
  place and the needs of customers.

7
Print Trends

• Increased complexity of print productsIndustry
  expects high levels of personalization
• 11 Marketing - mass market with demographics
• 4/C variable data print death of 1C mail latest
  generation in the market
• Color and personalization visually convey
  emotion, mood, quality
• Personalized, targeted covers, onserts, inserts,
  wraps
• Full color pictures, illustrations, logos, maps
• Micro quantities 4/c versioning for demographic
  binding

8
Print Trends
Mailing technologies/strategies that drive
complex print products

• Comments from Frank Romano
• (Professor Emeritus, Rochester Institute of
  Technology)
• Printers can no longer just be printers they
  must master the channels through which print is
  delivered
• Integrating print and marketing provides a value
  add that transcends price
• Mail is the major expansion area for printers
  today. Digital printing is a key enabler
• Today, all production services printers used
  before print were integrated into the print
  company--so why would we not integrate services
  that come after print?

9
Print Trends

• Digital is where the growth is
• Hybrid is coming on strong
• Toner and ink jet to achieve 30 of all print by
  2012-2015
• Need to innovate with technology
• Eventually, JDF (job definition format) and
  integrated production workflows will be a given

10
Digital Printing Futures
Frank Romano, Professor Emeritus, RIT

• 20,000 units, 40ppm and faster shipped
• By 2010, penetration of all printing industry
  user categories will be over 90
• Digital only firms to increase from 626 in 2000
  to 10,845 in 2010
• Expect sheet size to increase
• Volume to come from offset due to
• Shorter runs
• Tighter schedules
• Distribute and print

11
U.S. Printing Market Share

• Predictions
• 2005 2012-2015
• Litho 45 33
• Gravure 15 11
• Flexo 21 20
• Screen 3 2
• Digital 12 30

12
Trends in Perfect Binding

• Clear Trends
• Automation of the complete gathering-binding
  system
• Re-engineering of the gathering section
• New engineering developments in spine preparation
  technology
• The rise of PUR and other new adhesives
• New trends in book assembly
• Development of system for the on-demand market

13
Adding Value through Specialty Finishings

• Mailing and fulfillment services are being
  adopted by many
• To grow, the printer must have influence on the
  design of the product
• Traditional printers wish to rely on finishing
  houses
• Digital printers want to bring it inside

14
Price Increase and the Impact on the Industry

• Price is going up across the board for ink, paper
  and chemicals
• Raw material costs have risen significantly
• Energy and overall business costs continue to
  rise
• Health insurance to rise 8-10 per year
• Is the printer and customer willing to compromise
  on quality for price?

15
Working Smarter

• The only way to make money in the printing
  business is to do work a little better, finish it
  a little more promptly, and make fewer blunders
  than others. Charles Francis 1917
• Reduction of overall cost of manufacturing
• Reduction of cycle times
• Straight through processing
• Integrated production processes

16
Working Smarter

• Need to focus on
• Makeready times
• Run speed
• Waste numbers
• Rework and spoilage

17
Hiring Trends

• Labor Future of hiring The New Skill Set is
  scientific, computer-literate, mathematically,
  mechanically inclined
• Computer literate
• Problem solving skills
• Electrical/Mechanical backgrounds
• Color profiling tools/print by numbers
  (computerization of print)
• Mentoring skills
• Good work ethic
• Team oriented engaged active, working
  together for continual improvement