8 April 2005

Directions - Industry continues to seek new avenues to profitability

Whilst printers remain less concerned about volumes, pressure on prices and increasing raw material costs are encouraging businesses to improve internal processes with more companies focussing on stricter controls on debtors and investment in increased efficiency. Only 22% of companies reported that order books were worse than normal for the time of the year whilst a balance of 40% expected volume of output to improve over the next quarter. Whilst a balance of 8% expect prices to fall, a lower balance (5%) expect margins to fall suggesting that some companies are expecting to improve efficiency despite input costs continuing to rise. BPIF deputy chief executive Cicely Brown comments: "Although there is a depressing familiarity about the messages we’re hearing, there is a distinct undercurrent of businesses which are beginning to find new routes to profitability independent of prices. Throughout the industry, from the trade press to the BPIF, Vision in Print and other industry organisations, solutions are being made available to printers whether through advice on added value, productivity, training, cost rates - just to name a few." The Final Thought’ by BSI (British Standards Institute) Kitemark Business Manager Tina Tillard, emphasizes one such initiative being led by the BPIF with input from ViP’s ‘What makes a good printer’ best practice study. Writing about the new printing industry Kitemark that is under development, Ms Tillard comments: "Giving an industry a tool by which it can measure itself and thus set a minimum acceptable standard of service delivery can often (be the best way to improve business practices)." The theme of margin improvement is carried over in the Special Report which this quarter features publications printers, of which a small balance managed to work to wider margins despite the fact that the cost of paper rose. The net improvement in margins was achieved partly from higher efficiency which enabled some printers to cut labour costs and partly from running down stocks of materials. Directions is sponsored by Premier Paper and is free to BPIF members. Non-members can obtain Directions quarterly for an annual subscription of £100. Please contact BPIF Information Services Manager Kyle Jardine for more information on 020 7915 8317 or [email protected].