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Q&A with Gans Ink & Supply's Jeff Koppelman



This year's Ault Award honoree offers his views on the changes occurring in the printing and ink industries, as well as the opportunities going forward.



By David Savastano, Ink World Editor



Published July 1, 2008
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The Ault Award, presented by the National Association of Printing Ink Manufacturers (NAPIM), is the

Jeff Koppelman, left, receives the Ault Award from NAPIM president Michael Gettis.
most prestigious award given to a member of the U.S. ink industry. It is awarded to an individual who has made an outstanding contribution to the ink industry.
   
Jeff Koppelman, president of Gans Ink & Supply and the 2008 Ault Award recipient, is certainly a deserving recipient of the honor. A 28-year veteran of the ink industry, Mr. Koppelman joined Gans Ink, the company founded by his father-in-law, Bob Gans, rising from tub washer to president. During his tenure, he has guided the evolution of Gans Ink from a regional litho ink manufacturer to a national specialist in inks for niche markets, withdrawing the company from commodity markets and focusing on customers who recognize value.
   
Mr. Koppelman also served as NAPIM’s president from 2003-05, and is a successful advocate for the industry. He was selected to receive NAPIM’s prestigious Printing Ink Pioneer Award in 2005.
   
At a time when the ink and industries are facing dramatic changes, Mr. Koppelman offered his views and advice on the changes and opportunities that are occurring:

Q:

In 1995, you became president of Gans Ink & Supply. What was the ink industry like during that time, and how has the ink industry changed since then?

JK:

While I cannot speak for the entire industry, 1995 was a year much like the previous ten or so – business was brisk, the economy, all in all, was fairly sound and the printing industry (with the exception of the quick printer) was encouraged about the future. That being said, margins and/or profits, had been already shrinking for most of the ink industry (and its suppliers) for years and the worst was yet to come. After a few more years of relative stability, the bottom dropped out. Most people look at 9/11 as the trigger event, but I believe the permanent softening of our core markets began in early 2000, and continued in concert with the dot com bubble burst and its after effects. Then along came 9/11 and its own aftermath, coupled with technology changes within our customer bases, reduced print budgets, advanced desktop publishing and digital capabilities outside our product mixes, and ultimately, the need to re-examine our business models. The overall ink industry is still wallowing in uncertainty about the future, but I sense that the majority of companies are making the necessary changes to compete and be a viable part of the ever- changing landscape.

Q:

The printing industry has also seen fundamental shifts in its business. How has the printing business changed since the mid-1990s to where it is today, and what do you see going forward?

JK:

Since the mid-nineties, the printing industry has encountered many different kinds of changes. For the smaller printer, their customer base has either dried up or altered its requirements. As a result of the internet, desktop publishing and CD and DVD technology, that customer has become its own neighborhood printer and/or producer of advertising and informational materials. For larger printers, much shorter runs, continued overseas competition and expanded services (data-base management, fulfillment, etc.) have been just a few of the changes. And with so much overall manufacturing transferred to China in the past 10+ years, the printed packaging requirements have left with it, as well.

Q:

With that in mind, how can individual printers, particularly the small- and medium-sized printers, successfully move forward?

JK:

There is, of course, no easy or universal answer to that question. To successfully move forward, the individual printer needs to do what every other business does – change or die. Embrace the newest technologies, expand services and create differentiation from the competition. Find niches and cultivate them to the fullest.

 


Jeff Koppelman, president of Gans Ink, is joined by his wife, Liz, and sons Chad and Jordan after he received the Ault Award.

Q: We have all seen how higher raw material costs have caused margins for the ink industry on average to fall in recent years, but the truth is that margins were on the downswing anyway due to the battle for market share. Will the larger ink manufacturers be able to make up for their price cutting, or are they likely stuck at lower than healthy numbers?

JK:

As stated, gross profit margins have been shrinking for years, but so have “below the line” service costs and other non-manufacturing expenses that help mask the reduced profits problem. Regarding the price cutting, no company, big or small, ever makes up for the long-term losses that come with that tactic to gain market share. The only winner in that scenario is the customer, while everyone else gets wrapped up in a race to the bottom in the hopes of increased or sustained revenues. 

Q:

I asked before how the small- and medium-sized printers can thrive in the coming years. What would be your advice for small- and medium-sized ink manufacturers?

JK:

Business is business. As I said before, change or die. The business models of the small and medium sized ink companies cannot remain as they have been for decades. The core business since the 1960s – 4-color process and Pantone mixing bases – has been commoditized in the last 10 to 15 years by the multinationals utilizing offshore manufacturing or the direct exporters from Europe, India and Asia. It is already virtually impossible for some domestic manufacturers to compete on a long term basis in that market segment and that is why there has been such a proliferation of “dealers” and “buying groups” comprised of companies that used to manufacture those products themselves. For others, like the suggestion for the printer, seek niche markets, diversify the product portfolio and differentiate your company from your competitors. Easier said than done, though.

Q:

How can NAPIM play a role in improving the industry?

JK:

NAPIM can, and does, play a role in improving the industry by helping to improve its individual members. Knowledge is power and the organization continually searches for meaningful programs to educate and inform the membership. In my many years of association with the organization, I think that the current staff and its focus is as good as it has been. What NAPIM cannot do is improve the profit picture of our industry, but if the members (and non-members alike) took a closer look at the State of the Industry Report,….well, the Lord helps those that help themselves!

Q:

We saw a lot of consolidation within the ink industry, and some might say there was too much. Is it possible that individual ink companies can become too large to effectively compete?

JK:

I am not so sure that there has been too much consolidation in our industry. To the chagrin of some, it is simply a natural phenomenon of a mature industry. Being large, though does not dictate the ability to effectively compete, but rather defines the business areas where it needs (and wants) to compete. For the smaller ink companies, there is always opportunity, after a large consolidation, in the lower layer of the remaining concern’s customer base, but there is also an increased threat to lose the top layer of their own customer base.

Q:

Is there hope that the ink industry can right the ship, show some discipline in pricing and improve the overall business? What will it take for that to happen?

JK:

This is the easiest question yet. Of course, the industry can right the ship. It has, over and over again throughout time, because it has to. Most companies will make it, but some won’t over the next 10 years. No one can continue for much longer to lose money or have a return on investment below the rate earned on a passbook account! Complex economics has a place in every business, but simple math should dictate. If your expenses outweigh your revenues, raise your revenues by raising your prices. Overall revenues might suffer slightly, but in the end, your profits won’t.


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