Sean Milmo, Ink World European Editor11.02.09
Capital investment in the European printing sector is recovering after a slump of a few years and is providing new opportunities for ink and other suppliers.
A lot of the expenditure is going into innovative technologies and printing systems which will test the expertise and research skills of ink producers in their existing sectors, while offering openings for others to move into new markets.
Much of the impetus behind the investment wave has come from a rise in advertising and promotional expenditure, especially in newspaper, magazine and other segments of the print media.
Publishers are seeking both a means for expansion and more cost efficiencies through the installation of larger, more centralized printing sites.
In magazines, there has been a new swing toward the establishment of greater capacity in gravure presses so that publishers can achieve greater economies of scale, often by setting up regional printing centers.
In September, German publishing companies Gruner+Jahr and Arvato, both part of the Bertelsmann group, and Axel Springer signed a letter of intent to merge their gravure printing operations in Germany and the UK. The proposed deal will include a £115 million ($213 million) gravure plant being built by Arvato in Liverpool, England.
BDN, a Warsaw-based publishing group, is investing ε85 million ($110 million) in a gravure printing plant on a 44.5 acre site in Poland, which will print magazines, brochures and catalogs for markets in Central and Eastern Europe (CEE) and in countries like Ukraine and Russia.
Newspapers and Direct Mail
The highest number of planned investments appear to be in the newspaper sector, where publishers aim to broaden the scope of their printing capacities.
They want printing premises which can operate 24 hours daily by printing newspapers, supplements, inserts, and above all, direct mail and other promotional materials distributed separately from newspapers. Some newspaper publishers are spinning off their printing activities by merging them with other printing operations in order to achieve greater economies.
To stretch the capabilities of these enlarged printing plants, the equipment needs to be able to achieve higher print standards, in particular improved color quality.
Some publishers are giving themselves greater flexibility by combining coldset with heatset presses in their printing works. However, most want to concentrate on maximizing the utilization of coldset presses.
Trinity Mirror, a leading UK newspaper group with 12 printing sites, complained recently that its utilization rates varied between a maximum of 90 percent to a low of 25 percent.
The company announced in November a deal with Guardian Media Group (GMG), another large UK newspaper publisher, under which the two companies will share a £45 million ($83 million) investment in new printing equipment in a plant in northwest England.
Such projects put new pressures on the technical abilities of ink producers.
“It is quite a challenge because the newspaper publisher wants the coldset process to be more competitive with heatset,” said Steve Lilley, Sun Chemical’s product manager for coldset inks in Europe. “We are already achieving considerably higher quality than conventional newspapers, but now the requirement is to move standards even higher.”
The need to cut long-term costs in the newspaper sector is intensifying. Although advertising revenues are rising, they look unlikely to return to the levels of four to five years ago. In addition, newspaper circulation in many countries is static or even declining.
In Germany, which with the UK is Europe’s largest newspaper market, advertising in newspapers dropped by nearly 60 percent in the four years to 2003 and is still below the level of the mid-1990s, according to figures from the German advertising association (ZAW).
On the other hand, one of the fastest growing advertising media in Germany is direct mail, on which expenditure has risen by more than 40 percent in the last 10 years.
In the UK, spending on direct mail has gone up 2.5 times during the last 10 years so that it now accounts for nearly 20 percent of advertising expenditure, according to the country’s Direct Marketing Association (DMA). At the same time, there have been even big increases in expenditure on inserts and door-to-door promotional literature.
As a result, newspaper publishers in many countries are seeing the printing of direct marketing material as an attractive sector. Newspapers are now beginning to make big inroads into a segment traditional dominated by commercial printers.
Publishers have been bolstered by predictions of a continued strong growth in advertising expenditure for the next two to three years. ZenithOptimedia, a London-based media services organization, estimates in its latest forecast that advertising spending in Europe will go up by 4.7 percent this year compared with 1.1 percent last year and a 2.3 percent fall in 2002. It calculates that next year’s increase will be 4.4 percent and in 2006, 5.1 percent.
Higher investment by publishers and printers has been reflected in the financial results of leading European printing equipment manufacturers.
Koenig & Bauer (KBA) reported a 17 percent rise in sales in the first nine months of this year and a 22 percent jump in the volume of new orders by the end of the third quarter. Sales and orders of web presses went up 24 percent and 26 percent, respectively.
A major priority for new investments by newspaper publishers is an ability to print full color throughout their papers so that they can attract more premium-priced advertising. GMG’s deal with Trinity Mirror will enable it to print all its regional papers in the northwest of England in full color.
The German WAZ newspaper group, which has four daily newspapers in the North Rhine-Westphalia area, is aiming to invest ε200 million ($260 million) on new printing equipment at its sites in Hagen and Essen. The main reason is that it wants to have full-color advertising on all pages of its newspapers. The use of spot color is being eliminated.
In order to take full advantage of the extra full-color capacity, companies like WAZ are also investing heavily in upgrading their mailrooms which comprise the post-press and distribution processes. With more efficient mailrooms, they can gain greater flexibility with inserts and more scope for commercial work.
Mailrooms are becoming a key part of the activities of publishers, which deliver their newspaper direct to the homes of their subscriber readers. This distribution competence provides opportunities for winning direct marketing business.
“These sorts of newspaper companies are well positioned to raise the utilization of their printing plants because of the commercial work they can do,” said Frederick Broman, web offset manager at ANI Printing Inks, Trelleborg, Sweden. “It is one of the reasons why with companies like these, ink consumption has been rising even though paper circulations have been dropping.
“With the coldset inks, a major requirement is that they have to be uniform so that they can be used both for printing newspapers and commercial material,” he continued. “It is not economically feasible to change inks on coldset presses. Also, the inks must not set off onto other pages, particularly during the mailroom stage when newspapers, supplements and inserts are being combined together.”
ANI is a leading supplier of coldset inks in Scandinavia, where newspaper publishers have probably gained the biggest share in Europe of the market for the printing and distribution of door-to-door promotional material, particularly supermarket fliers.
If coldset printing is to make similar progress in large markets like Germany and France, there will probably have to be more advances in ink technologies and also in standards of paper.
UPM Kymmene of Finland has introduced a coated mechanical paper for coldset printing which it claims can provide quality of advertisements “normally attributed to heatset printing.” Other paper makers have been developing similarly innovative coated papers for the coldset sector.
“These new papers do make a terrific difference because the surface of the paper is so important to the performance of the ink,” said Mr Lilley. “With surfaces which are not smooth and are porous, a lot of ink is needed to cover the paper. With a smooth surface there is less absorption and more possibilities for building up the level of pigmentation.”
However, with more ink lying on the surface of the paper, drying becomes more of an issue. Sun Chemical has tested infrared systems and is currently conducting trials on the use of UV in coldset.
“The infrared method does set the ink more quickly but it is still not absolutely dry,” said Mr. Lilley. “With UV the ink is pretty well dry. We have also been using faster resin systems to achieve higher densities. But it seems likely that ultimately some sort of drying technology will be needed.”
One solution to the problems of achieving adequate color quality on newspaper presses would be a rapid growth in waterless printing.
KBA says that less than a year after it launched its new Cortina waterless newspaper press, it has sold 25 of the machines, which took four years to develop. There have been hopes that the introduction of the Cortina would trigger a revival in waterless printing in Europe, which has been held back by a limited number of producers of items like plates. A larger market for waterless should generate more suppliers of consumables and lower prices.
“Wider use of waterless inks would certainly give us more room to maneuver technologically,” said Mr. Lilley of Sun Chemical, which worked with KBA on the development of waterless inks for the Cortina.
In Europe, the combining of newspaper and commercial printing is still taking place in only a relatively small part of the newspaper sector. The speed of its expansion will not only depend on investment levels but also the cost of the printing systems need to make it work effectively.
A lot of the expenditure is going into innovative technologies and printing systems which will test the expertise and research skills of ink producers in their existing sectors, while offering openings for others to move into new markets.
Much of the impetus behind the investment wave has come from a rise in advertising and promotional expenditure, especially in newspaper, magazine and other segments of the print media.
Publishers are seeking both a means for expansion and more cost efficiencies through the installation of larger, more centralized printing sites.
In magazines, there has been a new swing toward the establishment of greater capacity in gravure presses so that publishers can achieve greater economies of scale, often by setting up regional printing centers.
In September, German publishing companies Gruner+Jahr and Arvato, both part of the Bertelsmann group, and Axel Springer signed a letter of intent to merge their gravure printing operations in Germany and the UK. The proposed deal will include a £115 million ($213 million) gravure plant being built by Arvato in Liverpool, England.
BDN, a Warsaw-based publishing group, is investing ε85 million ($110 million) in a gravure printing plant on a 44.5 acre site in Poland, which will print magazines, brochures and catalogs for markets in Central and Eastern Europe (CEE) and in countries like Ukraine and Russia.
Newspapers and Direct Mail
The highest number of planned investments appear to be in the newspaper sector, where publishers aim to broaden the scope of their printing capacities.
They want printing premises which can operate 24 hours daily by printing newspapers, supplements, inserts, and above all, direct mail and other promotional materials distributed separately from newspapers. Some newspaper publishers are spinning off their printing activities by merging them with other printing operations in order to achieve greater economies.
To stretch the capabilities of these enlarged printing plants, the equipment needs to be able to achieve higher print standards, in particular improved color quality.
Some publishers are giving themselves greater flexibility by combining coldset with heatset presses in their printing works. However, most want to concentrate on maximizing the utilization of coldset presses.
Trinity Mirror, a leading UK newspaper group with 12 printing sites, complained recently that its utilization rates varied between a maximum of 90 percent to a low of 25 percent.
The company announced in November a deal with Guardian Media Group (GMG), another large UK newspaper publisher, under which the two companies will share a £45 million ($83 million) investment in new printing equipment in a plant in northwest England.
Such projects put new pressures on the technical abilities of ink producers.
“It is quite a challenge because the newspaper publisher wants the coldset process to be more competitive with heatset,” said Steve Lilley, Sun Chemical’s product manager for coldset inks in Europe. “We are already achieving considerably higher quality than conventional newspapers, but now the requirement is to move standards even higher.”
The need to cut long-term costs in the newspaper sector is intensifying. Although advertising revenues are rising, they look unlikely to return to the levels of four to five years ago. In addition, newspaper circulation in many countries is static or even declining.
In Germany, which with the UK is Europe’s largest newspaper market, advertising in newspapers dropped by nearly 60 percent in the four years to 2003 and is still below the level of the mid-1990s, according to figures from the German advertising association (ZAW).
On the other hand, one of the fastest growing advertising media in Germany is direct mail, on which expenditure has risen by more than 40 percent in the last 10 years.
In the UK, spending on direct mail has gone up 2.5 times during the last 10 years so that it now accounts for nearly 20 percent of advertising expenditure, according to the country’s Direct Marketing Association (DMA). At the same time, there have been even big increases in expenditure on inserts and door-to-door promotional literature.
As a result, newspaper publishers in many countries are seeing the printing of direct marketing material as an attractive sector. Newspapers are now beginning to make big inroads into a segment traditional dominated by commercial printers.
Publishers have been bolstered by predictions of a continued strong growth in advertising expenditure for the next two to three years. ZenithOptimedia, a London-based media services organization, estimates in its latest forecast that advertising spending in Europe will go up by 4.7 percent this year compared with 1.1 percent last year and a 2.3 percent fall in 2002. It calculates that next year’s increase will be 4.4 percent and in 2006, 5.1 percent.
Ink, Equipment and Paper
Higher investment by publishers and printers has been reflected in the financial results of leading European printing equipment manufacturers.
Koenig & Bauer (KBA) reported a 17 percent rise in sales in the first nine months of this year and a 22 percent jump in the volume of new orders by the end of the third quarter. Sales and orders of web presses went up 24 percent and 26 percent, respectively.
A major priority for new investments by newspaper publishers is an ability to print full color throughout their papers so that they can attract more premium-priced advertising. GMG’s deal with Trinity Mirror will enable it to print all its regional papers in the northwest of England in full color.
The German WAZ newspaper group, which has four daily newspapers in the North Rhine-Westphalia area, is aiming to invest ε200 million ($260 million) on new printing equipment at its sites in Hagen and Essen. The main reason is that it wants to have full-color advertising on all pages of its newspapers. The use of spot color is being eliminated.
In order to take full advantage of the extra full-color capacity, companies like WAZ are also investing heavily in upgrading their mailrooms which comprise the post-press and distribution processes. With more efficient mailrooms, they can gain greater flexibility with inserts and more scope for commercial work.
Mailrooms are becoming a key part of the activities of publishers, which deliver their newspaper direct to the homes of their subscriber readers. This distribution competence provides opportunities for winning direct marketing business.
“These sorts of newspaper companies are well positioned to raise the utilization of their printing plants because of the commercial work they can do,” said Frederick Broman, web offset manager at ANI Printing Inks, Trelleborg, Sweden. “It is one of the reasons why with companies like these, ink consumption has been rising even though paper circulations have been dropping.
“With the coldset inks, a major requirement is that they have to be uniform so that they can be used both for printing newspapers and commercial material,” he continued. “It is not economically feasible to change inks on coldset presses. Also, the inks must not set off onto other pages, particularly during the mailroom stage when newspapers, supplements and inserts are being combined together.”
ANI is a leading supplier of coldset inks in Scandinavia, where newspaper publishers have probably gained the biggest share in Europe of the market for the printing and distribution of door-to-door promotional material, particularly supermarket fliers.
If coldset printing is to make similar progress in large markets like Germany and France, there will probably have to be more advances in ink technologies and also in standards of paper.
UPM Kymmene of Finland has introduced a coated mechanical paper for coldset printing which it claims can provide quality of advertisements “normally attributed to heatset printing.” Other paper makers have been developing similarly innovative coated papers for the coldset sector.
“These new papers do make a terrific difference because the surface of the paper is so important to the performance of the ink,” said Mr Lilley. “With surfaces which are not smooth and are porous, a lot of ink is needed to cover the paper. With a smooth surface there is less absorption and more possibilities for building up the level of pigmentation.”
However, with more ink lying on the surface of the paper, drying becomes more of an issue. Sun Chemical has tested infrared systems and is currently conducting trials on the use of UV in coldset.
“The infrared method does set the ink more quickly but it is still not absolutely dry,” said Mr. Lilley. “With UV the ink is pretty well dry. We have also been using faster resin systems to achieve higher densities. But it seems likely that ultimately some sort of drying technology will be needed.”
One solution to the problems of achieving adequate color quality on newspaper presses would be a rapid growth in waterless printing.
KBA says that less than a year after it launched its new Cortina waterless newspaper press, it has sold 25 of the machines, which took four years to develop. There have been hopes that the introduction of the Cortina would trigger a revival in waterless printing in Europe, which has been held back by a limited number of producers of items like plates. A larger market for waterless should generate more suppliers of consumables and lower prices.
“Wider use of waterless inks would certainly give us more room to maneuver technologically,” said Mr. Lilley of Sun Chemical, which worked with KBA on the development of waterless inks for the Cortina.
In Europe, the combining of newspaper and commercial printing is still taking place in only a relatively small part of the newspaper sector. The speed of its expansion will not only depend on investment levels but also the cost of the printing systems need to make it work effectively.