1 egin april 2008 intergraf the competitiveness of the european printing industry and the influence...

EGIN April 2008 INTERGRAF1

The Competitiveness of the European Printing

Industry and the Influence of China


Confederation for Printingand Allied IndustriesPlace E. Flagey 7BE – 1050 Brussels

25 Member Federations in 22 Countries

INTERGRAF


• European Graphic Industry

• Chinese Printing Industry and imports affecting the European market

• Analysis and initiatives

Content of presentation


• 130,000 companies; 870,000 employees; 100 billion EUR turnover • Sector which is dominated by small and micro companies• Largely focussed on domestic market• Dependant on trends in advertising• Investments focus on equipment acquisition. R&D and other immaterial investments are more marginal• Characterized by structural overcapacity• Enormous pressure on prices• Dependence on very large customers and suppliers• Emergence of new actors: print management companies• Varying importance of foreign trade; deterioration of trade balance in most countries

Profile of the European Graphic Industry


Chinese Printing Industry

1985 2002 2006

11,000 companies 90,000 companies 97,000 companies

850,000 employees 3 Mio employees 3.4 Mio employees

0.6% of GNP 2% of GNP

2003 EU 27:

126,000 companies

900,000 employees

91 billion EUR

• Growth Rate of 15% per year• Total turnover of 30 billion EUR in 2005 • Market Segments: Commercial Printing 41%, Packaging Print 40%, Pre-press 19%• 40% companies privately owned, 26% collective companies, 18% joint stock companies


A long way to go for fair trade

Intellectual Property RightsTurbulent, high-risk IP environment:• Counterfeited goods;• Entire fake companies;• Rampant piracy from DVDs, watches and luxury goods to software and pharmaceuticals;• Reverse engineering;• Limited legal enforcement.

Production ConditionsVery low production costs due to various factors


How far is China?

Boat

30 days, Shanghai is the third largest port in the world

Road

20 days, increasing efforts by the International Road Transport Union to simplify customs procedures

Airplane

Overnight; Transport by air seems to be an option for European buyers



Bohai Rim

Beijing

Yangtze River Delta

Shanghai

Pearl River Delta

Hong Kong / Macao / Guangzhou



Developments

• Today, newspapers, books, packaging, magazines are dominant sectors by value;

• Sectors that will gain importance: Packaging, advertising and promotional-related print sectors are expected to increase

• Less imported equipment expected• Industry concentration in delta regions


Key points for CHINESE Printing industry

Industrial structure and

economics

Supply chain

Clients & ProductsTechnology

Regulations

Challenges

• Since 2006 China has managed to satisfy local consumption needs for paper, ink and machinery• Chinese machinery not far from European one regarding quality

• Technology gap with Europe is not deep• European machinery manufacturers are in the process of opening subsidia-ries. Complaints about infringement of IPR

Environmental legislation seems to exist only in the field of energy production No information on H&S Larger companies are ISO certified

• Local market is skyrocketing• Customers’ portfolio is international• Customers are target of worldwide promotional campaigns• Officially they can order all products

• Some 6 000 publication printing companies• 37 000 packaging printers• 54 000 other printing • 3 Mio employees

Economic Background


The Globalisation of Print – Chinese Import penetration grows

75 Mio EUR in 1995

650 Mio EUR in 2006

GERMANY

SPAIN

FINLAND

FRANCE

ESTONIA

SLOVENIA SWEDEN PORTUGAL

LUXEMBOURG

NETHERLANDS

DENMARK

CYPRUS

CZECH REPUBLIC

BELGIUM POLAND

ITALY

GREECE

HUNGARY

IRELAND

LITHUANIA

LATVIA

SLOVAKIA AUSTRIA

UNITED KINGDOM


Imports of printed matter into selected European countries 1995-2006 (in EUR)

SPAIN

NETHERLANDS

POLAND

BELGIUM

GERMANY GERMANY

GERMANY FRANCE

UNITED KINGDOM

UNITED KINGDOM

UNITED KINGDOM

ITALY POLAND 0

50

100

150

200

250

300

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Mil

lio

ns


Imports of printed matter into selected European countries 1995-2006 (in Million EUR)

without UK and Germany

ITALY

ITALY

POLAND

POLAND

AUSTRIA AUSTRIA AUSTRIA

BELGIUM

BELGIUM

DENMARK DENMARK

SPAIN

SPAIN

FRANCE

FRANCE

FRANCE

ITALY ITALY

ITALY

NETHERLANDS

NETHERLANDS

PORTUGAL

0

10

20

30

40

50

60

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Mill

ions


The relocation drivers are based on product and market characteristics:

• Volume to be produced

• Time for delivery (including conception, order, manufacturing and transportation schedule)

• Importance of labor cost and manual operations in products

Categories of products affected by relocation


Categories of products affected by relocations

Manufacturing time limits

Volume Ordered

Low

High

Short time limits Long time limits

Books

Printed trade materials

Newspapers

Magazines

Affected by relocations

Potentially affected by relocations

Catalogues

Best Sellers books

Manuals of

delocalized products

Children booksDiaries


Chinese Influence on European Print Market• Increasing pressure on European markets • Countries most affected: UK, Germany,

France, Netherlands, Belgium, Spain• Other Asian countries with some influence:

Hong Kong, Singapore, Malaysia• Even though the total amount of imports is

not yet threatening the increase witnessed over the past years is dangerous

• Most affected categories of products: other books, children books, calendars/ greeting cards and other printing


Analysis of the EU Printing Industry

StrengthsModern & efficient production

tools

High quality and flexible product offer respecting the environment

OpportunitiesDifferentiation possible

Service orientation grows

Multi-media comm. solution

WeaknessesAverage size too small

Overcapacity

Moderate intern. Experience

Weak negotiation position

ThreatsGrowing presence of third

countries

Relocation of activities

Intense price war

Disconnected from R&D


Analysis of the EU Printing Industry

• Lack of common and shared vision• Low level of consolidation• Weak negotiation position • Overcapacity• Standard product positioning without sufficient

differentiation or added value


Scope for Action

• Managing production costs• Find new growth basis• Support European printers and develop the

European Printing Industry• Invest in human resources for the future• Make printing industry a reference in terms of

Health & Safety & Environment• Improve the image of the printing industry with its

best practices

Actions need to happen at company, national and European level


• Publication of the Intergraf Report on China in March 2006

• Intergraf Workshops and Conferences in different countries in 2006 and 2007

• EU Commission Study published in autumn 2007 • Publication of “Why print in the European Union” • Joint European Campaign to promote Print:

Print Sells• Set up of a project data-base• Draft of a Common European Action Plan along the

6 Action Points

Intergraf Initiatives


Intergraf Member Projects

Environment / H&S / Waste

Short term Long term

Standardization

Market Trends

Process Optimization / Cost calculation

Lean Managementlocal level /

company

national

EU

Innovation / Research & Development

ProcurementGuidelines

Machine Guidelines

InternationalizationCompetitiveness

Value of Membership

Human Resource

Image


Some key issues for the future

• Research on imports from China (H&S issues)

• Provide market trends

• European Project for value added services

• Reinforced co-operation of companies

• Sharing of best practices at association level

• Involving more stakeholders

• Developing a European Research & Innovation network

• Lean management and improved processes

• Printing standards network

• Develop Print Sells as continuous network


Human Resources• Courses and workshops throughout Europe / trainee

programmes• Cross-media: education on the developing and marketing

of cross-media concepts• Network of companies with focus on process optimization,

new working methods and competence development• E-learning based training courses developed with

universities• Up-date of job profiles to respect the changing customer

demands• More modular approach in education and training


IINTERNTERGGRAFRAFPlace Eugène Flagey 7 Place Eugène Flagey 7 BE - 1050 BruxellesBE - 1050 BruxellesTel: +32 2 230 86 46Tel: +32 2 230 86 46Fax:+32 2 231 14 64Fax:+32 2 231 14 64www.intergraf.euwww.intergraf.eu

More Information ….

Thank you for your attention!

Beatrice Klose - [email protected]

1 egin april 2008 intergraf the competitiveness of the european printing industry and the influence...

Documents

european printing industry

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collective companies

intergraf confederation

industry concentration

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