Heidelberg Australia & New Zealand last week announced its “commercially prudent” decision to tighten trading terms to 30 days in response to “unprecedented change” in the industry.
Kodak, which has a pre-press and consumables partnership with the press maker, praised the decision.
“I think it was a strong move by Heidelberg to go public like that… I wouldn’t be surprised if others took a similar stance,” said Adrian Fleming, managing director of Kodak, which generally offers 30-day terms.
“For us, [credit] is hugely important. Any kind of bad debt or exposure can be catastrophic when margins are thinner than they’ve ever been before.”
Fujifilm said it allows 30- to 60-day terms, but national credit manager David Hunt said that may be tightened in light of Heidelberg’s move.
“That’s something that’s given us some faith in the industry, that some suppliers are looking to improve terms and, therefore, the industry as a whole,” he told ProPrint.
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Heidelberg’s policy change was also praised by KBA, which also said it allows 30- to 60-day terms.
“I applaud what they’ve done. I think credit has a dangerous side it. We’re not banks,” said KBA Australasia’s sheetfed general manager, Dave Lewis.
“If it enforces a bit more fiscal responsibility in the industry, why not? It’s difficult enough to make profit in this industry, so you can’t allow people not to pay.”
Agfa managing director Mark Brindley praised Heidelberg for moving to 30-days terms, which he said were in line with Agfa’s, and said he would welcome other companies doing the same.
“It’s a massive issue. I think in recent years, terms have blown out a little bit,” he said.
Brindley told ProPrint that although 30 days was Agfa’s “global standard”, he wouldn’t rule out Australia tightening its terms.
“Cash is king, so the quicker we can collect it, the better for our business, so perhaps we will give some thought to that.”
Currie Group, which said it allows 30- to 60-day terms, said it was good that Heidelberg had brought such an important issue out into the open.
“It’s incredibly important. What we’ve experienced in the last six months has heightened everybody’s awareness of it,” said sales and marketing director Phillip Rennell.
“As a private Australian company, we’ve probably had a lot more consciousness around that than you might find with the multinationals.”
[Related: Mabuzi ends credit and boosts sales]
Rennell told ProPrint that credit imposed a lot of hidden costs, because suppliers were employing people to chase money and customers were wasting resourcing in handling correspondence and managing payment schedules.
“We’ve created an industry within our industry that is increasing the cost of doing business.”
Manroland Australasia, which said it generally offers 30-day terms, agreed that credit could have a dark side.
“My view is that some of the suppliers have given credit willy-nilly and it’s come back to haunt them,” said managing director Steve Dunwell.
“Some suppliers, because they have insurance, have let people go to ridiculous lengths, and now it’s come back to bite them, because their insurance probably won’t cover some of it.”
BJ Ball chief executive Craig Brown said that “a cautionary approach to credit is essential”.
“I think the industry’s approach to credit has been fractured for a long time and in general terms industry suppliers need to put their hand up for this,” he said.
“Historically credit has been extended too easily with little due diligence. The impact has been a rising cost of insuring debt which has, therefore, resulted in a tightening of credit policies.”
[LinkedIn: Should the industry stop operating on credit?]
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