Five Star takes hit from ‘lemon’ press

Carolyn Cagney says a faulty digital printer cost Five Star Print more than $6m in lost business and almost brought down the whole company.

The Kodak Nexpress SX, bought at PrintEx in 2011, was supposed to cut costs for the Adelaide firm’s digital operations and bring it into the offset market.

Instead, the 15-year-old side business Graf-X Pty Ltd was put into administration last week after a long-running dispute with suppliers over the performance of the printer.

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Cagney, managing director of the company, told ProPrint revenue collapsed as poor print quality and constant mechanical issues forced an exodus of clients and contracts.

“We had a good little digital business and it was completely destroyed by one lemon press – we went from a turnover of $1.5m to only $200,000 in three years,” she says.

“It cost $800,000 in repayments and $300,000 for clicks but most of the work jammed, or the quality was so terrible it went straight in the bin.

“We lost business, clients, contracts, ruined our quality and reputation. It just about sunk the whole of Five Star. I sat here in tears so many nights wondering what to do.”

Cagney would not say what the printer is or which company supplied it because she is considering legal action, but the suppliers have confirmed to ProPrint the model in question.

According to Konica Minolta, which sold Five Star the machine, Kodak has certified it as being in working order and administrators have already found a buyer.

“The manufacturer has inspected it and found nothing wrong with it. In our view the problem was operator error, not the printer,” a Konica Minolta spokesman says.

Cagney says Five Star staff spent years trying to get the printer to work properly and she even had to give clients back about $70,000 because it could not deliver.

“I can’t believe they would say it was operator error,” she says. “We worked our arses off, my operator tried so hard to make it work and he is so upset by that suggestion.

“Even the manufacturer’s own tech people couldn’t get it running.”

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Cagney also claims the manufacturer has charged Five Star for 30,000 clicks in a recent four week period when the machine has been turned off in resignation for the past three months.

She claims the manufacturer refuses to service her CTP equipment, which it also supplied, until Five Star pays up.

“I can’t believe they are just going to walk away from all this. Their attitude is ‘just try and fight us, we are bigger than you’,” Cagney says. “We told ASIC and the ACCC but they have done nothing.”

Cagney says all creditors from Graf-X Pty Ltd will be paid in full by the main Five Star business and all employees will be transferred over to run its digital operations using two new digital machines – a Fuji Xerox Color 1000 Press and a Versant 2100.

Cagney started Graf-X in 1990 as a prepress house and then added digital in 2000. Before buying the Nexpress it used a HP Indigo 5500.

She bought Five Star in 2003, registered as Tone Block Pty Ltd under which the company will now solely under, and today uses three Heidelberg presses for offset work.

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