2012 NAPIM Convention Review
Branding, Blue Ocean Strategy are among the topics discussed by ink industry leaders, while the State of the Industry Report painted a challenging picture of 2011.
Richard Breen of Central Ink, center, is congratulated by past Ault Award recipients Michael Gettis, Michael Murphy, Diane Parisi, Urban Hirsch III, Rick Clendenning and Jeff Koppelman.
The ideas of branding and determining niche markets hold promise for ink manufacturers, and were explored at length during theNational Association of Printing Ink Manufacturers’ (NAPIM) 96th annual convention, which was held March 24-27 at Hyatt Grand Champions Resort, Indian Wells, CA.
Sascha Strauss, managing director of Innovation Protocol, a leading branding expert, presented the keynote talk on “Branding You/Personal Branding,” and followed with a session on “B2B Brand Strategy.”
Central Ink’s CEO Richard Breen, second from left, is joined by, from left, Vic Dahleen, Doug Anderson and Gregg Dahleen after he received NAPIM’s Ault Award.
“You have to tell a story,” Mr. Strauss said. “A brand is an exclusive and desirable idea embodied in products, prices, services, people and experiences. If you just look at Excel spreadsheets, you become a commodity business.”
Mr. Strauss noted that Starbucks does not have the best coffee or service, nor is it the least expensive. “They know people go to get coffee for a place to go,” he said. “You have to give people a reason to believe in you.”
The Blue Ocean Strategy was another major focus. During a half-day session at the convention, Dr. Zunaira Munir, managing director of Strategize Blue, discussed how ink manufacturers might be able to use the strategy in their business.
Essentially, Blue Ocean Strategy is the idea that a business or organization can develop demand in a new market space, instead of competing in heavily contested markets. Dr. Munir cited examples of associations that moved into different fields, one example being Cirque Soleil, which has profitably combined the circus and theater.
“Go where the profits and growth are and your competitors aren’t,” she added.
Other presenters brought messages of changing times to attendees. In his talk on “Commercial Printing: An Industry Being Redefined,” Dr. Joseph Truncale, president and CEO of NAPL, discussed the changing nature of the commercial offset market. Meanwhile, Jim Hamilton, group director at InfoTrends, analyzed the growth of digital technologies.
“Like the American economy and the world economy, the commercial printing industry is not simply changing – t is being redefined,” Dr. Truncale said. “It is becoming something fundamentally different – omething more complex and even more competitive than it was – reating historic opportunity for the prepared and profound threats for the unprepared, no matter how big, established or successful the unprepared have been.”
Dr. Truncale noted that commercial printing sales have been relatively flat for the past two years, after suffering a 12.2% decline in 2009, adding that the market is down 23.2% since its all-time high in 2000. He said that companies ultimately have to look at every part of their business, and challenge how they run their business.
Along the theme of digital technologies, Mr. Hamilton spoke on “The Impact of Production Digital Print Technologies on Conventional Print Markets.”
“Traditional print processes are threatened on all sides,” Mr. Hamilton observed. “Digital print will never fully replace traditional processes, which excel at cost-effective manufacturing of large quantities and can take advantage of digital capabilities in hybrid configurations.
“Digital print has some core advantages versus traditional methods, including economic short runs, true print on demand, personalization, the ability for the device to become a digital document archive and features that facilitate automation,” Mr. Hamilton added, noting that there is a “huge transition underway” from black and white to color in digital printing, and inkjet and offset press manufacturers are working together on next generation products.
State of the Industry Report
The Annual Convention also features the NAPIM State of the Industry Report. NAPIM conducts a survey of its members and compiles the results. Not surprisingly, the 2011 State of the Industry Report featured some challenging news.
According to NAPIM’s survey respondents, ink sales (not including digital, textile and screen) declined in dollar value by 0.9% in 2011, with pounds falling by 3.1%. Offset inks have fared particularly poorly; since 2004, offset inks have declined approximately 30% by volume in the U.S., according to NAPIM. By contrast, flexo ink volume has declined roughly 10% over the same period, but has remained steady since 2009.
The profitability of the ink industry has been severely impacted by higher raw material costs and a decline in demand in some key segments.
According to the report, ink companies’ earnings before interest and taxes, or EBIT, was -1.9%. However, companies with less than $50 million in sales reported an EBIT of 5.4%; companies with sales greater than $50 million recorded a -2.3% EBIT.
In another key indicator, return on net assets (RONA)based on EBIT was -3.9% overall for the ink industry. Once again, the smaller companies fared far better: Companies with sales of less than $50 million reported an average RONA of 12.8%, while larger companies had a -5.4% RONA.
Raw material prices tell part of the story. In 2010, raw material costs accounted for 60.0% of operating expenses for ink companies. In 2011, that figure rose to 63.1%. Labor costs also rose, from 7.0% in 2010 to 7.5% in 2011.
Jim Leitch, Braden Sutphin Ink’s CEO, presented the report, and he noted that ink industry leaders surveyed thought better days are on the horizon.
“You can’t avoid the fact that these results are disappointing,” Mr. Leitch said. “However, the survey notes that ink companies are optimistic that things will get better.”
Ault Award Dinner
The Ault Award Dinner is a highlight of every NAPIM Convention, as NAPIM honors leaders who have made major contributions to their companies and the industry in general. Richard E. Breen, owner and CEO of Central Ink corporation, received the Ault Award, the most prestigious honor from NAPIM (see story on page 36).
Last year, the Printing Ink Pioneer Awards were expanded to include Technical Associate Members (TAMs), and this led to an impressive slate of honorees for the Pioneer Awards: All total, five ink industry leaders and six TAM executives received Printing Ink Pioneer Awards. They include:
• Rodney Balmer, technical director paste ink, Flint Group.
• Hixon Boyd, vice president national accounts, Color Resolutions International, LLC.
• Rich Bradley, global market manger printing inks, Lubrizol Advanced Materials.
• Jonathan Ellaby, vice president international operations, INX International Ink Co.
• Michael P. Gerkin Sr., president, Kustom Group.
• Tom Gwizdalski, MaxSol business manager, Resolute Oil, LLC.
• John Jilek Sr., president again, Inksolutions, LLC.
• Alan Kalmikoff, president and CEO, Keim Additec Surface USA.
• Rick Krause, business manager resins and performance additives, BASF.
• Gerald Napiecek, manager quality assurance and regulatory affairs, Colorcon, No-Tox Products.
• Moe Rahmeh, technical manager for Sun Chemical in the Dallas/Fort Worth, TX region.
Next year’s convention will be held April 6-9, 2013 at Hyatt Regency Coconut Point in Bonita Springs, FL. For more information, contact NAPIM at (732) 855-1525 or check the web at www.napim.org.
For more coverage of the NAPIM Convention, including more photos, see the online version of this story at www.inkworldmagazine.com.