Borrowing for tomorrow

With issues like excess capacity and changing technology and markets, printers have had to be willing to adapt or vanish. Those who have survived have shown a willingness to invest for the future and are showing good results

Some of the smaller operators have been absorbed into larger groups, notably Pacific Print which has recently emerged as a major player in the New Zealand market.

Finance companies have seen relatively few applications for start ups in the industry, and the trend is toward consolidation rather than expansion. Nevertheless, new and used machinery continues sell at a rapid rate.

With a shrinking market and rising prices, investment levels are increasing and it is becoming more difficult for printers to get loans for smaller purchases. Some finance companies set a lower lending limit that is still well above the requirements of many smaller printers.

In this environment, finance brokers like One Finance (see story over) are having an impact, with their ability to source a finance company that is willing to go lower, then carrying through the proposal for finance and ensuring it is accepted. These finance brokers are also having an impact in the higher end of the market, with their expertise ensuring that the best deal is found with the most appropriate finance company for large scale financing.

The total solutions approach to printing is also having an effect on the world of finance. The increase in uptake of CTP among medium-sized printers over the last year or two is one example; the installation of several long presses around the country is another.

Many finance companies support the approach of printers in investing in new technology – up to a point. While it is increasingly critical to stay up to date with technology in the world of print, ‘new and shiny’ is not always the way to go. Used machinery from outside the country continues to stream in and is often more cost-effective than buying new.

With the rapid leaps that are being made in technology, it is often possible to pick up, for example, a late-model press from Europe that still does an excellent job, and is missing only a bell or a whistle from the brand new version.

There are warning signs around however, that with the high volume of presses entering the country in recent years, that overcapacity is an issue and margins could be squeezed.

The smart printers will be looking to finance companies to assist them with investments in innovation, rather than increased press power.

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