The Scottish are known to be frugal. Dick Downie, co-founder of Kosdown Printing and father of its current directors, David, Derek and Sandra, is no different. David says his father’s Scottish nature can be seen in Kosdown’s conservative approach to investment. But as the diversified offset and digital firm can testify, being conservative about investment is not a barrier to growth. It could actually be the catalyst for sustainable success.
Conservative, yes, but don’t call the company tight. This family business has a track record of giving back. It sponsors Kosdown Performance Cycling team and is a passionate supporter of grassroots sport. The cycling angle also chimes with David – on the day ProPrint visits, he has just ridden 13km to work and will ride another 13km back later that day.
The directors also know when to spend: one such example was the lavish party they recently threw for staff and customers to open their new plant in Port Melbourne.
Money is not the only thing Kosdown can be conservative about. The company has also been shy about promoting itself. David says one customer dubbed it “the best kept secret in Melbourne”.
Speaking to David and Derek Downie, hints of the company’s careful and considered nature crops up in conversation. Given the option, they will buy something outright, rather than on a payment plan. They try to avoid debt where they can.
Company founder Dick Downie and his wife, Maureen, were Scottish immigrants. They started the company in the early ’80s. Dick had been working as the manager at Bradford Printing and decided to strike out on his own. He partnered with a colleague, Kosta Petratos, and opened up the new company in the suburb of Richmond – ‘Kos-down’ is a conjunction of their names.
It was a family affair from the start. Parents and children put their houses up as collateral to get the business going. At the time, David, who has a degree in applied physics, was working at a research facility. He quickly started pitching in at Kosdown after hours. Derek was in sales at VRG Paper. Soon, he also heeded the call of the family business.
The company grew thanks to word of mouth, says David. “Dad knew a few people from the industry, having worked in it all his life so we were doing probably 50-60% trade work in the beginning. Now it’s probably about 10-15% trade work.”
Signals of their astute business sense come across when discussing real estate. Within the first few years of operation, the fledgling company outgrew its Richmond home. It needed somewhere bigger. The opportunity arose to acquire a plant in Port Melbourne. Kosdown went from facing one problem to having the exact opposite: the site they were leaving was too small; the new 20,000 square foot premises was much larger than required.
“We did need more room, it was a little tiny place down there. But the new place was too big for us. Dad was going to go half with Debden Diaries at the time, but that deal fell over and we ended up holding the baby for the factory, which was probably a bigger outlay than we wanted,” says David.
Kosdown took the plunge and moved in. That was 27 years ago. At the end of last year, the firm relocated for just the second time, from one side of Port Melbourne to its new home in Rocklea Drive.
It is right to call it a new home, but, thanks to a clever deal eight years ago, the building has actually been in the family for nearly a decade. David explains that the Downies owned a vacant lot on the other side of Port Melbourne; Vaughan Constructions offered to build a factory on it. The Downies were not about to rush a major commitment, but Derek took the artist’s impression and stuck it to a ‘For Lease’ sign in the middle of the empty paddock.
“We thought it was joke,” says David. “Six months later, [clothing label manufacturer] Cash’s walked in and said they were looking for a new HQ. They said if you build it, we will lease it.”
The arrangement lasted for eight years. By 2012, Kosdown was spilling out of its building, renting warehouse space from the next-door neighbour. Then Maureen Downie’s health took a turn, so Dick retired to spend time with his wife.
This is how Kosdown came to have three joint managing directors: Derek, David and their sister, Sandra, who is an equal owner and looks after accounts and admin. David says people have questioned the arrangement, but it works for them.
Derek says: “There’s no CEO. I mean, Dad was the boss when he was here, but he’s retired, and he’s only retired because of Mum’s poor health over the last few years.”
No click charges
The conservative approach to spending is relevant when looking at Kosdown’s recent foray into digital printing. The firm has just become the proud owner of Australia’s first MGI Meteor DP8700 XL, which was due to arrive as ProPrint went to press. The digital production press has some unique selling points, including its large sheet size and the ability to print on a diverse range of materials, such as plastic cards. But the spec that really caught Kosdown’s attention was the lack of click charges. David says “no click charges suited me”. He agrees it was the old “Scottish conservative thing”.
Rather than a click charge, Kosdown has a 12-month consumables supply deal with supplier Ferrostaal. Click or no click, there’s still a risk involved with an capital investment of this magnitude. “We are taking a gamble, because all up it’s $420,000. It’s a lot of money,” says David.
The format is a talking point. The baseplate machine takes a 330x650mm sheet, similar to the Xerox iGen4 EXP and the Kodak Nexpress SX. But the MGI machine can also be fitted with a kit that takes sheets up to 40 inches in length. This is the model Kosdown ordered.
The 330×1,020mm sheet, with an image area up to 321×1,011 mm, allows for four A4-plus pages on a single sheet. To launch the new press to its customers, Kosdown has produced a flyer that shows off this radical format. The double-sided, oversized A4 brochure folds out to four sheets wide. Compare this with output from rival machines from Xerox and Kodak, which both boast larger-than-normal sheet sizes. Both the iGen4 EXP and Nexpress can take a 660mm sheet – larger than many digital presses, but only half the length of the MGI.
Welcome arrival
When the MGI arrives at Kosdown’s factory, it will be the first one sold in Australia. The French brand is not new – in fact, the DP8700 XL launched nearly two years ago at Fespa. What has changed is the local agency, which recently swapped from GBC to Ferrostaal. The new dealer has grand ambitions that the new kid on the block can go head to head with the more established offerings from Xerox, Kodak and Indigo.
Considering the timing, it would be easy to assume that Ferrostaal’s appearance is behind the Kosdown installation. In fact, Derek and David Downie drove the deal.
“I first saw [the MGI] at Drupa last May and spoke to David about it,” says Derek Downie. “Then there was the Print show in Chicago in November, so David went over to see it. It doesn’t have the clicks and all that. This is a machine. It’s unique.”
This was before Ferrostaal took over the agency, and David was dealing direct with the manufacturer. “I got in touch with MGI and went over to England to have a look at it and speak to them there.”
David struck up negotiations with MGI’s US-based director of sales & communications, Ray Pena. In typically conservative fashion, they didn’t rush the deal. David met with MGI’s UK general manager, David Evans, who took him to visit three different customers in the UK.
“Typically English, he left the room when I was talking to the customers. He was comfortable to do that, because he believed in the equipment,” says David.
“I can’t understand why MGI haven’t got a presence in Australia. Now they will.”
Some of the interesting applications possible on the MGI include edge-to-edge envelope printing as well as plastic card production. The digital press should also allow Kosdown to bring in-house a lot of the short-run work it has traditionally sent out to trade. This factor was essential in convincing the conservative Downies of the business case for the machine.
“We went through the exercise of saying, ‘Right, if we just kept the in-house work we have instead of sending it out, will that alone justify the machine?’” says David.
“Then we approached two or three of our top customers, who wouldn’t think to give us 20 copies of something, and we asked, ‘If we did [short-run digital], would you give it to us?’. They said absolutely, so we know that we’ll get a couple of hundred thousand dollars a year out of those.”
Early adopter in digital
All of this might give the impression that Kosdown is late to the party in digital. Nothing could be further from the truth. Small-format commercial digital might be a new area, but the company has been operating large-format for some time.
There’s a theory that commercial offset printers can move into wide-format digital to diversify and build a more profitable side to the business. Kosdown is living proof that this is possible.
The division started about five years ago with an Agfa Anapurna, which has since been replaced by a newer Anapurna with white ink capabilities. Kosdown increased its large-format firepower in 2011 when it installed the first EFI Vutek QS3220 in Australia. The machine can print six colour plus white on a roll up to 3,200mm wide or boards to 50mm thick.
“I think we were probably one of the first commercial offset printers to have large-format, outside of screen printers. I just thought, one day visual impact is going to be more relevant than 25,000 drop mailers in the post office box,” says Derek.
Under one roof
Kosdown Digital operates out of the same plant, with Derek loosely charged with overseeing this division while David is more involved the offset side of the business. Although they are literally under one roof already, with the arrival of the MGI, there is a plan to further align these different parts of Kosdown.
It all comes back to Kosdown’s long-held ambition to do it all for customers. The owners are fastidious about never letting a customer down, says David. Even in the very early days, the Downies preferred to do work themselves rather than send it out.
“As soon as you send out a job, it’s out of your control. People let you down. Your customer doesn’t want to hear, ‘It’s not our fault; it’s someone else’s’. They just haven’t got their job. So the bottom line is that we do it ourselves because we want to make sure the job gets delivered. That’s been the basis of the whole company. If somebody needs something, we deliver it. That’s it, even if it means we work all night.”
This one-stop shop offering, combining litho, wide-format and production digital, will be glued together by a new online ordering system. The solution needs to cater to diverse types of output; any old web-to-print system won’t do. David accepts that bespoke work will always require a more hands-on approach, with good old-fashioned consultation with the customer. But the hope is that the online system will take the manpower out of standardised jobs. It is still a work in progress.
“The whole idea is that it will come under one roof. Our online quoting system is going to have different substrates and large-format – how many options do you put up there? Hopefully anybody who wants something unique just picks up the phone or sends an email,” says David.
Derek sums up the one-stop shop offer. “You want 20 copies of a 12-pager, three life-size cutouts and 5,000 DLs? We can do it all in-house.”
The web-to-print system should also allow Kosdown to compete against print managers. Kosdown also does a bit of work for brokers, but only rarely, adds David.
“We haven’t ruled out print managers. We still do work for them if they’re legitimate. But it seems to be all one way and the margins aren’t there.”
He says Kosdown occasionally bids for Victorian government work, both under current print manager Finsbury Green and its predecessor, Stream Solutions. “We can go in at zero margin, zero on everything and not win it. They send you a report and it shows you quoted $1,000 but the winning price was $480. How do they do it? The frigging paper was $480!
“So from that end, there’s no margins in it and you’re just wasting your time. I think we’ve got a terrific name in the industry and we’ve got a terrific name with our customers. We’ve had some of the customers for 25 years, which is really unusual in business,” adds David.
Tradition, family and old-fashioned values remain intrinsic to Kosdown, even as it continues to reinvent itself as a technologically advanced printer.
“We’ve always been very slow in making decisions, because we love to do things safely. It’s our old man’s method and it’s an old-fashioned way. You know, ‘We can’t get a new folder until we’ve paid off the guillotine’,” says Derek.
David adds: “Even the presses were like that. Dad would buy them on five-year terms so we own them in five years, not one of these indefinite arrangements.”
He points to the bloodshed in the market at the moment, and says untenable debt is behind much of it. People have tried to change the Downies’ minds over the years, but the conservative approach has paid off, says David. “It was against the accountant’s advice, but the old man was right.”
FACTFILE
Established 1982
Staff 28
Based Melbourne, Victoria
Offset litho a five-colour and a four-colour Komori Lithrone 28
Wide-format digital Agfa Anapurna, EFI Vutek
Small-format digital MGI Meteor DP8700 XL
BUSINESS BRIEFING
* Kosdown Printing was founded by Dick Downie as a family business, with his wife, Maureen, on accounts and children David, Derek and Sandra
* It has conservative approach to debt, paying off equipment on short terms and buying its own premises
* Last year, Dick retired and the company relocated to its new home on the other side of Port Melbourne
* Kosdown moved into wide-format digital five years ago with an Agfa Anapurna and that side of the
business has continued to grow
* It has recently made a major move into small-format digital production, with the investment in Australia’s first MGI Meteor DP8700 XL press
* The three parts to the business – litho, wide-format and small-format digital – will be tied together with a new online ordering system
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