Tyranny of distance

Of the 4500 print businesses in Australia the majority are in the cities, but there are plenty of country cousins in regional areas, and they have their own issues. Competition is intense both from the regions and increasingly city printers. Supplies are more costly and take longer to get there. Finding people with the right skills can be a challenge. All of them say they don’t specialise in any particular area, they have to take any job that comes along.

Bill Healey, chief executive of the Printing Industry Association of Australia, says the industry is changing and regional printers are facing the problem of regional clients now accessing competitors in cities with technology and faster logistics.

“What they’re offering and what they’re delivering is going through a major transformation,’’ Healey says. “It is something the industry has to consider.

ProPrint talked to a number of printers in regional Australia to assess the business environment they’re now confronting.

 

Mark Osborne
Managing Director
, Green Ridge Press, Toowoomba

Company established:  1967.
Acquired:  1992
Workforce: 35
Turnover: $6 million

Osborne says his company has about 30 per cent of the market in Toowoomba. Two other printers have about 60 per cent between them. The remaining two or three printers in the town have about 10 per cent.

This is why he rejects suggestions that his company is in any sort of dominating position.

“We have an aggressive competitive market,” he says. “I think Toowoomba is every bit as competitive as what you would find in Brisbane and the Gold Coast. They all whinge about the prices they can get and we do exactly the same.”

He says that while locals are still very loyal, the question of price comes into it more and more these days.  “We get Brisbane companies coming up and trying to sell into our market just as we try to sell into theirs,’’ he says. “So we often have sales reps from Brisbane coming up and contacting our customers.”

Waiting for parts and the costs of supplies are an issue, he says. Supplies take a day longer to arrive and cost more than for their city couterparts. As a result, the company needs to have a lot more stock in its inventory than the city boys.

“Also it costs us a lot more to deliver because if you’re in Brisbane, delivering to a Brisbane client it doesn’t cost as much to deliver your job but for us it will cost $50 a palette. You have to be that much more competitive,’’ says Osborne.

“We have paper deliveries out of Brisbane every day. In Brisbane they might deliver to the printers two or three times a day depending on what they need whereas what we do is hold a large amount of stock on the floor at any given time.

“You get opportunity jobs where somebody comes in and wants 10,000 A4s you can do it straight away. We would hold a lot more stock on the floor than people in the capital city would. We can’t wait for two days until you get the paper.”

He says skilled labour is an issue so the company aggressively recruits from outside of town. “You will find whenever somebody from the printing industry comes to town, they do the rounds of all the major printers and leave their resumes,’’ he says. “That’s how we picked up most of our last lot of staff.

“We had a guy who moved down from Rockhampton, we had a guy who moved up from Brisbane, we had a guy who moved down from McKay. We decided whether they would fit our workplace and took them on board.  Sometimes you take them on board even if you don’t need them. You take them on board and see how you go.”

So what are the advantages of operating out of Toowoomba?

“The advantages are we don’t have to pay so much for our building and rates and we have a more consistent approach to staff,’’ he says. “We also have staff with a better attitude because they want to be long term. That’s an absolute positive, having consistency of staff when you’re doing repeat jobs. “

 

Peter Martin
Owner
, Lotsa Printing, Port Douglas

Company established: 1995
Workforce: 38
Turnover: undisclosed
Machinery:  Ryobi 920 and HP Designjet L26500.   Xerox iGen4 EXP

Martin says his company does not focus on any particular sector. “It’s all sectors,’’ he says. “Whatever needs print, we do it.”

Lotsa Printing is a multi-site operation with four branches: Port Douglas, Townsville, Cairns and Tablelands

The company has a major slice of the market although Martin does not wish to disclose how big it is.

Are there advantages being so dominant?  “Yes and no,’’ he says. “Everyone is chasing you. There is just as much competition as there is in Brisbane, Sydney and Melbourne.”

Despite the company’s size and success, he says there are disadvantages in being a regional player.

“You have to carry more stock, we have to do everything in house, we can’t send it out to Brisbane, and in fact Brisbane is closer to Melbourne than they are to me,’’ he says. “I have to spend more money on equipment and we have to cater to a range of finished product that we have to supply.

“Obviously all the freight is included in paper prices so it’s dearer than Brisbane. With repairs, you have to fly people in from Brisbane, Sydney or Melbourne as opposed to someone popping around.”

And it takes longer to get service and about two days to get supplies.

“That’s why I have to carry more stock and look after my machinery better,’’ he says.

He says getting skilled staff is a challenge and he has to bring them in from outside. He makes sure his company is known in recruiting circles by word of mouth. But the quality of the staff is a lot better. “The availability of the work isn’t as good as it would be in the capital city so they’re inclined to work smarter and harder to enjoy the job,’’ he says.

 

Tony Coleman
Managing director, Colemans Printing, Darwin

Company established:  1954
Workforce:  50
Turnover: undisclosed (“There’s big boys and small guys and we’re somewhere in between I guess”)

Coleman says his company does not specialise in any particular sector. Being in a market the size of Darwin, his company takes on all work.

“We cover just about everything,’’ Coleman says. “The days of being a one stop shop and being all things to everyone are almost over in many places, but we are one out of the box, in that we do that. The market is only small so you need to cover all those things to have a half decent business.”

Coleman has a multi-site business, with another production hub in Alice Springs. Across the board, it is the biggest printing operator in the Northern Territory and claims to be the only A1 printer in Darwin.

But Coleman says that is no great comfort because the competition is intense.

“In the A3, it is very competitive and our competitors keep us honest,’’ Coleman says.

“When you go into A1, our biggest competitor is in Adelaide. We struggle to compete with those guys because they have more print power over us. And when you go to the A3 area, the local suppliers are very competitive.

“It’s probably not advantageous because everybody tries to knock off the big guy and in a small market it’s their main focus which is not necessarily a good thing.”

Being so far out, he says getting supplies is costly and it takes longer to get them. “We have to hold a fair bit of stock, whether it be paper or ink. You have to be well prepared with your stocklines, you definitely have your disadvantages.”

But he says the company is now developing strategies to work around that.

“The premium can be as high as 30 per cent on certain items but we are fixing that. We will have better buying power with a few things happening. We are going to try and get involved with new networks and supply chains,’’ he says.

“We are lucky in a lot of ways. Being in the business so long, you get to know who can help you.

“That’s why when you come into our factory we are predominantly a Heidelberg house. Heidelberg has looked after us but we have also made good friends with engineers who have now gone out on their own.

“It’s just history. You get to know who you can use and who can do things quicker for you.”

Recruiting staff is “by far the most difficult thing”, particularly now that Darwin is now ranked as one of the most expensive cities in Australia.

He says the company addresses this problem by recruiting staff from Asia, which is on Darwin’s doorstep, and by emphasising the lifestyle advantages of living there.

“We are very much an 8 to 5 business, five days a week,’’ he says. “We don’t have 24 hour shifts running.  Luckily we are a skills shortage area so we can access staff from overseas. The other one is trying to sell a lifestyle change to people. So it’s: Come to Darwin and you’ve got fishing and the lifestyle and you are an 8 to 5 employee, and you have your weekends off to do whatever you want, whether it’s family or fishing or camping.

The other advantage in having a multi-site operation is that he can shift staff around to fill positions as the need arises.

And Territorians, he says, are very loyal to businesses. “There’s obviously a big loyalty base with customers,’’ he says. “Territorians are as parochial as any other state. We are only a small population so we do try to look after each other. In that world, it’s definitely a big advantage being local and being able to supply locally.

“We also have the quick turnaround times. We are not going to be the cheapest by any stretch but if you’re turning around jobs quicker than the southern printers can print it and get it to Darwin, then you have that advantage as well.

“Alice Springs people are probably even more parochial than Darwin people and if you have a presence in the Alice, they’re going to use you more than anyone else, and also they’re after the same as Darwin with that turnaround time.”

 

Alan Mogridge

Director, Excell Print, Pambula, south coast NSW

Company established: 1991 Acquired: 1998
Workforce: 20
Turnover: undisclosed

Excell Print is a multi-site operation with an offset operation in Pambula, a digital shop in Merimbula and an office in Batemans Bay.

Mogridge says the company does not specialise, it can’t afford to. It takes on every job. “We do it for anyone who wants printing done. In the country it’s different,’’ he says. “When you have lots of choice you can narrow it down but because of our location, we can’t afford to do that.”

Mogridge says that there was a clear strategy to turn Excell into a major player regionally when it was acquired.

“There are other printers all down the coast. We would be the largest without any shadow of doubt because we put a fairly strong footprint on the market and that’s been our goal from day one, to establish a strong professional presence and we have largely achieved that,’’ he says.

“Our market is not just our local market. We do have representation in Canberra. The strategy is to draw work in from other areas and not be totally reliant on the local area because of the ups and downs of a regional market. We do some work for Sydney. We also do a reasonable amount of work for Canberra and other regional centres within our geographic area. We cover the entire south-east corner if you like.”

That has served the company well, he says. “I guess the way we saw it, when we came here was there are a lot of very small printers dotted all the way down the coast and in little country areas, and we saw that with technology and with the contacts we had that we could take it to another level and still be in a country environment.

“We have built a business around that and used our contacts and resources that we had to generate a business within the region.”

He says while the work coming in can be patchy, there are some distinctive advantages to the location.

“Generally clients in the country recognise that regional centres exist because they’re supported by other regional businesses so therefore they tend to support their own,’’ Mogridge says. “Customers in any country environment are loyal, they’re loyal to each other. I would say customer loyalty is a lot stronger in a regional environment.”

Nor is there any problem getting skilled staff.  He says people are just drawn to the south coast of New South Wales for its scenic beauty. Many are seeking a lifestyle change,

“We don’t have that problem at all,’’ he says. “I get people knocking on my door quite often who love the area and want to come and live here and want a job.

“In fact, 80 per cent of our staff have come from larger print environments in the capital city and they have wanted to do the sea change. We have highly skilled staff, experienced printers. They have all had exposure in larger print environments. We’re blessed from that point of view.”

The disadvantages – cost of supplies and time it takes to get material – need to be worked around, he says.

“We keep fairly high stock levels of our baseline, ‘’ he says. “We can order paper one day and it’s here the next morning so that’s pretty good.

“We would purchase paper with a freight component built in so the cost of the paper would be higher than it would be for someone in Sydney, Canberra or Melbourne.”

On the other hand, that balances out with lower costs in other areas.

“So we might pay more for our paper but our overheads are lower because rents are lower, the cost of running a business would be lower. Overall the cost of running a business in the country would be lower in that your rents are a lot less,’’ he says.

“I know we can compete quite well when we quote against printers in other environments.”

 

Debbie Burgess
Director, Bright Print Group, Wetherill Park

Company established: 1962
Workforce: 100
Turnover: Undisclosed

Debbie Burgess says the company is in a comfortable position serving Newcastle and the Hunter. “I wouldn’t say we dominate but we have the capability to produce a wide range of product for that region that they may not have had previously,’’ she says. “There’s competition in most regions. You have fewer print companies but there’s still competition.”

She says customer loyalty is a factor for regional printers. “They (customers) are more parochial to the region. They certainly purchase more from local companies than they do from companies that come from metropolitan areas, unless there are no service providers locally.”

She says the advantage of being a multi-site operator is that the purchasing is done out of Wetherill Park, eliminating the higher costs and delays if the order were to be made from Newcastle. And having Wetherill allows the company to relocate staff and minimise the impact of any skills shortage.

Still, she concedes some delays are inevitable. But like every regional printer, the company just has to work around it.

“You definitely have delays in delivery and you have to wait longer for technicians and that sort of thing. You don’t have the same round the clock service that you do in the city areas. That means you need to plan accordingly and work smarter to make allowances for those sorts of delays.”

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