Technology: The Great Equalizer

Some things always strike fear in me no matter how well I prepare myself before confronting them face to face. For instance, in the movie The Shining, whenever Jack Nicholson starts running through the hedge maze with a knife in his hand in search of his wife, I just can't watch. I leave the room or flip to another channel.

Similarly, I freak out whenever I hear about a conference or seminar that features a presentation on how easily commercial printers can expand into package printing. It happened again recently at TrendVision just before Graphics of the Americas, held January 22-23 at the Miami Beach Convention Ctr., with one of PFFC's editors, Teresa Koltzenburg, in attendance. I've addressed this subject in the past. As well, PFFC featured an article in the August 2002 issue entitled, “Our Newest Rivals.”

It's understandable why some commercial printers have set their targets on package manufacturing, which was identified by several sources as a growth industry even during the harshest portion of the economic slump we're still trying to maneuver through.

Even The Society of the Plastics Industry (SPI) reports in its December 2003-released study, “The Definition, Size and Impact of the US Plastics Industry” (prepared by Probe Economics, Millwood, NY), that while employment and shipments in their industry took a nosedive the last two years — paralleling the decline of US manufacturing as a whole — “the number of establishments manufacturing plastics packaging film and sheet grew from 2000 to 2002…. Plastics packaging film, polystyrene foam, and plastic bottles were the only sectors that defied the downward trend in shipments.” Also reporting on a brighter outlook for plastics, Crain's Plastics News reports in the January 12 edition from its fax poll: “In spite of vexing economic issues and the proverbial China thorn in their sides, processors are looking favorably down the road of 2004.”

While this news seemingly bodes well for industry — and specifically package converting — unofficially, machinery manufacturers/suppliers to the industry fairly consistently have reported to me new equipment sales continue to lag, with converters still “holding out” on large purchases. Granted, simply because converters aren't buying equipment doesn't mean they're planning to go into Chapter 11; however, the health of most industries generally is reflected in the ability of equipment users to purchase new technology to remain competitive.

Technology is the great equalizer. At a Print Outlook conference held December 4-5 in Washington, DC, a panel of three printing company executives offered some insight. Paul V. Reilly, chairman, president, and CEO of Mail-Well (Englewood, CO), commented: “Today the problem with our industry is that printers all look a lot alike, and our suppliers look a lot alike. Technology is great, but technology also equalizes. This makes it hard for printers to make themselves very different from one another.”

Differentiation is just one reason why commercial printers are considering the addition of package printing capabilities. But what may start out as just a few commercial printers moving into new markets eventually will become a trend. Offset litho press manufacturers have modified their lines to be as flexible and versatile as their customers need, including the capability to run traditional commercial jobs one day and labels or folding cartons the next.

For the time being, commercial printers are hearing predictions of improving revenues and profits for 2004. NPES consulting economist Michael Evans of The Evans Group at Outlook 2004 announced the national economy will grow by 4%-4.5% in 2003. He predicted that next year “will be a very strong year, but we will see a wind-down of growth to below-average rates in 2005 and 2006.”

So commercial printers may delay entering the package printing arena for now — they have a huge learning curve to address anyway. At TrendVision, PFFC's Teresa Koltzenburg told the audience printing on film is possible because of surface treating equipment. The audience seemed unfamiliar with corona or plasma treating and are likely also unprepared for the diversity of materials and inks and the importance of FDA compliance for food contact. And while commercial printers may not be prepared to undertake package printing jobs, the scary part is technology eventually will equalize the playing field. Are you prepared to compete?

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