Choosing and reviewing suppliers for this annual report is like identifying one particular shade from a stack of swatchbooks: it isn't as simple as black and white. Making our task difficult is the fact that the Asian print manufacturing industry is not the sum of six or seven major suppliers, but an assemblage of talent so diverse PW would need an A—Z directory to showcase all of them. So, in view of the limited space available here, we use a common thread that binds these companies: they are all export players, with at least 20% of their bottom line derived from the publishing industry. The result? An alphabetical list of 28 suppliers from Hong Kong/China and Singapore, including one-stop shops, brokerage firms, one color-separation bureau and one nonpaper producer.
This list isn't exhaustive, as PW missed some companies because of clashing schedules or because they did not appear on our radar. Neither is this list rubber-stamped with our approval or endorsement. So, use it instead as a starting point in your search for the best suppliers whose capabilities, organizational set-up and management philosophy fit your criteria. PW's advice? Exercise due diligence by obtaining annual reports, checking out existing products and visiting the facilities before putting ink on the quotations.
The Players in the Field
Business at
Asia Pacific Offset was brisk in 2003 and the company continues to see tremendous growth in trade books, stationery and gift items. "Accordingly, we have increased our staff strength both in the U.S. and in Hong Kong with three new hires on each side," says president Andrew Clarke. Reprint activity was also very strong, he says, "and it looks set to be the same this year. Just-in-time inventory is here to stay, so there is constant demand for frequent reprints with fast turnaround and delivery. This requires that we stock sufficient paper in Hong Kong in order to meet three-week reprint delivery requirements. We're also seeing more requests for drop shipments to multiple warehouses in the U.S." Clarke has also seen a dramatic increase in orders for kits and book-plus projects in the last two years. "As a brokerage firm, we're an ideal source for these complex projects where clients need to locate several different items and put them together in a package. Our dedicated staff assist in sourcing and creating appropriate packaging solutions. Recent book-plus projects include ones on manga, origami, sushi, gift wrap and board games. We also ventured into mass production of ceramics for the first time last year. The challenge was to create two packages using existing cookbooks and match them with custom-designed ceramic bowls to reflect the subject of the books. It made for great on-the-job training for us."
He continues, "We also had the privilege to oversee the manufacturing of the 1,200-page Complete Far Side—a project of mammoth proportions, and certainly the largest we have ever managed. Upon completion, each two-volume set weighs approximately 8.6 kilograms. With a sizable print run, the books alone accounted for some 860 tons of paper and 95 tons of board. Then there's another 118 tons of board for the slipcases and 41,000 meters of cloth for the binding. It was a very successful project for us."
For
Bright Arts, its location in a gray and nondescript industrial complex tucked along King's Road hides an amazing array of state-of-the-art equipment and a high-tech crew of staff. Over the past few years, it has added a Heidelberg Primescan D8200 as well as a Heidelberg Nexscan F4200 to its pool of machinery. Managing director Sunny Shum says, "We've added a Prinergy Workflow server and Staccato FM Screen software to enhance the whole CtP workflow. Then we decided that an Epson 10600 for high-end proofing was needed to complete the system, so we purchased it as well. But that doesn't mean that we've stopped investing in our wet-proofing capacity. We currently have five 2-color Dainippon Screen KF222, with the last addition equipped with computer inking control. For color management, we have added a Spectro-Eye Spectrophotometer which was bundled with an ICC and Munsell 100 Hue test kit package."
The above list is already old news to Shum. "Let me share with you our 2004 investment plan," he says: "Another CreoScitex Dolev 800V3 for film output and another 8-page format Creo Trendsetter for thermal CtP platemaking will be added. Hopefully, the additional capacity will keep up with the growing demand for high-quality CtP workflow for wet-proofing. Another 2-color KF222 with computer inking control is also coming in later this year." In 2004, Shum expects company sales to grow around 10%. "And much of this, I believe, will be directly attributed to our improved CtP workflow and enhanced proofing system."
At
C&C Offset, the oversized photography book Balancing Water: Restoring the Klamath Basin and the special editions of The U.S. Navy and The Armed Forces in its conference room are difficult to overlook. Yet, director and deputy general manager Ken Lee says, "The best state-of-the-art equipment is capable of producing these and other products you see in this showroom. The part that sells the Hong Kong/China print manufacturing industry is its ability to add bells —and whistles at a very competitive price. And we have to thank the large pool of hand-assembly operators available just across the border for that."
In recent years, C&C's master plan is to serve book publishers and to diversify into financial/security printing markets. Lee says, "Last year, we acquired a security printer as we see China becoming a vast market in terms of security printing needs. At the same time, our market share in the Hong Kong security printing sector has grown so much that we have to find room for further expansion. Also, C&C Beijing has been growing rapidly, and it now has eight new sheetfed presses and two commercial web presses in addition to a full range of binding lines. We have just added one more perfect-binding line. More sheetfed presses will be installed later this year." C&C Pinghu (Shenzhen) has also purchased additional land to accommodate larger-scale printing for domestic and export products. New presses will be added to its present Heidelberg M600 lineup. C&C also bought a 150,000-sq.-meter piece of land in the Qingpu district (Shanghai) for its manufacturing facility. Turning to book publishing, Lee says, "Our expansion into postpress finishing is an ongoing process. Silk-screen printing, glittering, flocking and special die-cutting are great for children's products, and this is yet another market which we're pursuing right now. In the last few years, we have experienced a big increase in children's products. For 2004, we expect to see growth of 10%—15% in this category."
"Our expansion into financial/security and digital printing doesn't mean that we're sidelining our publishing customers. In the long run, we believe our decision to go after new market segments—domestic or overseas—will prove advantageous to everybody."
For
Colorcraft, 2003 was a challenging year. Its deputy chairman, David Kinloch, says that SARS, the Iraq war and a weak U.S. dollar all affected the company. "We had cancellations from American clients— 'in case we get SARS from the books.' We lost some business at the beginning of the Iraq conflict— 'to show solidarity with America.' The positive side is that these factors have made us more innovative and customer-oriented in order to continue to grow. This year has started well for us, and we have seen a significant upturn in both the book and the nonbook business." Colorcraft now has a sales team of 10 covering the U.S. and plans to have the same in the U.K. and Europe by the end of this year.
According to chairman Bundy Walker, demand for ancillary and supplementary items from educational publishers is on the rise in recent months. "We are going from just books to kits with magnetic whiteboards, cards and large board games with many different components and other manipulatives. Overall, the trend is for more gimmicky items to go with the book, such as CDs, foil-printing and glittering or wobbly eyes, anything that will give a perceived added value to the retail price. It's always fun to source and manufacture multi-component books, and we get to answer interesting questions such as, how do you get the wobbly eyes to wobble all the time without the book falling apart? It calls for all our expertise to produce an item that meets our clients' requirements. For general trade books, we're seeing paperbacks with larger flaps or multiple gatefolds, such as those found in the innovative range of travel guides that we produce."
And which are Walker's favorite projects? "Besides the wobbly eye project? There's a lovely music book we produced for a leading U.S. music publisher which combines a great piece of design—using the usual printing tricks of spot varnish and matte lamination—with a CD-ROM and a matte embossed slipcase. Another title with a premium CD-ROM was rather challenging. We had to display the CD-ROM prominently and at the same time make sure it can be stored properly with the book. Our solution is to have the plastic CD-ROM blister pack mounted within a circular hole on the front cover. It thus becomes an integral part of the merchandising and design of the book."
When asked for the Colorcraft sales pitch, Kinloch says, "We don't need one. Clients know—and frequently tell their counterparts—that we can do the impossible, on time and on budget. Bundy has built up a unique brand name, synonymous with quality and professionalism. No one in Colorcraft is going to do anything else but improve on that."
CTPS—
China Translation and Printing Services being its full name—differs from other companies in this report as it got its start in translation services. "We basically had a slow but steady learning curve shifting from translation services to brochure/ catalogue printing. The major turning point was when Macmillan came to us in 1968," says managing director Peter Tse. That got the company serious about textbook printing. Capacity-wise, it now has 12 sheetfed presses—which include two 8-color perfectors—and one cold-set web press supported by two Creo CtP systems. One narrow-width 6-color with coating unit for book cover production has also been commissioned; it'll be the first such installation in China. Some 55,000-sq.-ft. of warehousing/inventory management area will also be added to its present 110,000-sq.-ft., 400-staff Dongguan plant. "We are progressing into more fulfillment and hand-assembly work, hence the construction of a second factory that is slated for completion by the end of this year. On the other hand, our lightweight printing capabilities for long and short runs have put us in a specialist category, as there are limited numbers of Asian printers capable of such services, in particular Bible printing," says Tse. "We have installed a semi-robotic thumb-indexing system to enhance the workflow, and it has since been used in the production of dictionaries, such as those from Oxford University Press."
In 2003, Tse—a former financial analyst—started revamping the company's organizational structure and aggressively plotting its future. One of his first moves was to hire professionals to help run the operations because, as he puts it, "We're only as good as the people we hire." Among his recruits is business development director John Currie, a familiar name in the industry with his previous stints at printer/packager New Island (Hong Kong) and newspaper/magazine conglomerate Sri Utusan (Malaysia). "Our long-term goal is to build on our core competencies and to seek out new areas for vertical expansion," says Currie. "We see Invospan—our sister company dealing with translations—as a complementary service provider in specific markets such as language-learning and financial documentations. This synergy of translation and print manufacturing capabilities is opening up new opportunities for us." Not surprisingly, CTPS showed an amazing 45% growth in 2003, compared to an average of 12%—15% in the past six years.
Getting the remote-proofing system up to speed is also among the top items on CTPS's to-do list. "We are now reviewing remote/soft-proofing applications with the intention of providing specific publishers with such a service. Overall, our goal is to improve our operations and enhance our services. Of special note is our commissioning of a factory-wide MIS system that is capable of fast-track estimation, stock control, cost evaluation and providing a B2B portal. Meanwhile, training has already begun for our ERP [enterprise-wide requisition planning] system," says Currie.
At
Elegance Printing, the samples lying on the table in front of PW speak volumes. There's These United States, which is a large-format photography book with an introduction by Walter Cronkite; Card Shop in a Box, which contains 30 high-value hand-made greeting cards; and an amazing children's book, Grandfather's Farm, in which the joined pages formed a 10-foot reading book. "All these would be impossible without our fervent adoption of the latest technology and our innovative search for the new and novel," says its U.S. managing director, Frank DeLuca. Picking up These United States, he notes, "This is a good example of a high-quality project with a fast turnaround: the whole manufacturing process of printing, binding and shipping is compressed into one month. And instead of wet proofs, we use MatchPrint proofs for this project."
Family-owned Elegance is one of Heidelberg's top customers in Asia—with a 12-press lineup and five CtP systems that are a combination of Topsetters and Trendsetters—and was a case study at the big German DRUPA show in 2000. Deluca says, "If you visit our Shenzhen facility, you'll realize that it's a mirror image of our Hong Kong facility in terms of the machinery lineup. If the commissioned presses arrive and are assembled without delay, we'll have 18 presses by the end of 2004." And like most print manufacturing facilities in the region, hand-assembly lines are a given. Though Elegance started its handwork operation only last December, it now has about 1,200 workers and is expanding fast.
Elegance charted double-digit growth in 2003 and is set to hit the same again this year. Sales from the U.S. contribute some 90% to its total business, and it has not seen any impact from the major crises in the past years. Its European sales are picking up fast because, as DeLuca says, "Since we started from zero in this region, the potential is huge. We get many enquiries from all parts of the world, as everybody wants to manufacture their products in Hong Kong/China and because Elegance is offering them high-quality services with good pricing."
At
Everbest, managing director Ken Chung says, "We didn't do anything profound last year." That must be an understatement, as the company enjoyed double-digit growth in 2003 and has further expansion planned with more land it intends to acquire in Nansha. "Everything that happened—including the growth in our sales—was a byproduct of the global economy. With the euro flying high, manufacturing in Hong Kong/China has become much more attractive to European publishers. So we're now seeing a marked increase in projects from that region," continues Chung, who has leveraged on that growth with a new London rep office last January. "The same applies to the Australian dollar. But then again, our Sydney office is relatively new and therefore it has plenty of opportunities in both Australia and New Zealand." Major publishers like Hinkler Books, Reader's Digest and Penguin are now its regular customers. Its U.S. business—done mainly through agents—has held steady in spite of the weak currency.
Chung says, "The arrival of our first 8-color Mitsubishi perfector last December coincided with a two-day event heralding Everbest's 50th year in business as well as celebrating the official opening of our brand-new phase II factory." New 4-color and 5-color presses. as well as another Agfa CtP system. were also installed last year. And by year end, a new web press and high-speed binding lines will also be in place. "We're entering the Chinese magazine/commercial printing market and so, for 2005, we predict the growth to come from this segment, and new investments will be made accordingly to support it."
And what's new in Everbest's core expertise, the coffee-table/art books world? Chung says, "There is the much touted and highly recommended Hexachrome printing. The truth? It's an expensive process and publishers generally don't have the budget for it. Personally, I doubt it will become mainstream and will most probably be just another fad like stochastic and waterless printing." As for the declining color-sep industry, he says, "What's killing this industry is the arrival of cheaper and increasingly automated scanning equipment. It takes much of the technical expertise out of the equation. More publishers are also either doing in-house scanning or turning to domestic suppliers for the service. Cost-wise, there's really not much saving in high-res scanning in Hong Kong than in North America or Europe. There is also the convenience and comfort-zone factors in going local. He adds, "I think color separation is following the typesetting industry's death path, when word-processing and graphics software got popular."
Cranium and Christian Dior: two brand names with nothing in common, except they represent the fastest-growing categories for
Hua Yang last year. "Our board-game manufacturing business continues to grow on the back of our Cranium success both in the U.K. and the U.S.," says China-based president/CEO Kevin Murphy. "On the other hand, our proven expertise in luxury packaging has landed us an extremely interesting deal to produce promotional CD/DVD packaging using a unique and proprietary method devised by a client."
He continues, "Our Christian Dior program has always demanded extremely high-quality standards across a variety of packaging formats. We have had to print on thin silver foils which were then laminated onto board for the boxes. Another challenging project in 2003 was a Corporate Advertising magazine insert for a hair product—with sound chip—for which the turnaround time from the go-ahead to delivery was two weeks."
London-based v-p for international marketing Tony Brooks says, "Our children's novelty book sector remained somewhat static, owing to a cautious production strategy from many customers which resulted in shorter print runs. While our focus remains on children's books, the other sectors have allowed us to better absorb any downturn in new titles or shorter print runs on the book side. Right now, we're looking for steady growth in the U.S. as well as Europe, especially France, where publishers have historically taken coeditions rather than developing their own titles. Poland and Russia—unlikely as it may seem—have also shown particular potential at this stage with some high-volume orders."
Last year Hua Yang moved its Xixiang production and administrative facility to newer and bigger premises. It also invested $10 million in capital expenditure, including two 5-color presses with a dryer/coating unit, a fully automated rigid box-making line and an Agfa CtP system. Says Murphy, "The CtP system is particularly pertinent with pop-up books involving complex paper-engineering in which the integration of die-lines and artwork can be done in a much shorter time." An agent in the mid-west region has also been appointed for the first time, as it ventures into children's religious books suited to their production capabilities. Just recently, Hua Yang was sold to Cornerstone Overseas Investment, a Hong Kong company with various assets and interests in the Asian toy and printing industry. Its senior management team will remain in place. "We'll continue to focus on our three core products: children's books, board games manufacturing and promotional packaging," says Murphy.
Trust
Hung Hing, one of the biggest print manufacturers in town, to set 2004 in a cautiously optimistic perspective. "We're definitely hoping to see more sales coming from Europe as a result of the appreciating euro. I would be happy with a 15% sales increase this year," says managing director Matthew Yum. Between March and September 2003—a period defined mostly by the SARS epidemic and a jittery manufacturing mood—Hung Hing saw a 10% rise in its revenue, with its paper products and hand-assembly projects combined chalking up a 15% sales increase. Yum notes, "The strong euro has made even those publishers loyal to suppliers in Italy or Spain shift their manufacturing to our shores—or even to Singapore and South Korea—in order to maintain their cost competitiveness. The appreciating Canadian and Australian dollar have also added to the good vibes."
When Yum mentions bringing his company up to speed in conventional printing, PW does a double take: Isn't Hung Hing playing in this segment all along? "Actually, our focus has always been on complicated children's product/book manufacturing, novelty and packaging. That's where our expertise and experience shines through. Even though over the years we have printed for various customers, conventional printing hasn't been one of our core competencies."
The venture into conventional printing marks a new expansion plan and a new category for Hung Hing. Yum says, "In all honesty, I equate 'expansion plan' with 'survival plan,' because that's what it really is. The basic goal is always to maintain the profit margin and to be ahead of the competition." To date, the company has purchased a new 8-color Heidelberg with a coating unit, a 10-color Mitsubishi and a new Korbus line for its conventional printing division. More finishing equipment will be installed throughout the year. "Conventional printing is a very price-sensitive and automation-driven category. Margins are razor-thin, even when the print run goes up to tens of thousands of copies, possibly requiring special inks and finishing. So we really need the most efficient state-of-the-art equipment available to make sure we have a good cost base," he says. Between the new machines and its existing presses in Shenzhen—which also include a 10-color—Hung Hing is now ready to take your orders.
Brokerage firm
Imago can be likened to a 24-year-old going on 74: its illustrious history and impressive array of products and services belie its comparatively young age. With offices in New York, Los Angeles, Chicago, Oxford, Sydney and Paris, and with production centers in Singapore and Hong Kong, Imago is truly international. "Our Paris office was established last January and it's currently managed by Matt Critchlow, a bilingual Englishman with publishing background. We're no stranger to many French publishers, as we often produce the co-editions they bought from U.K. houses," says Hong Kong managing director Kendrick Cheung. A Shanghai office to help manage growing merchandising and manufacturing activities is also in the cards this year. "Roughly, 15% of our work is currently placed in Europe and 85% in Asia. In turn, the work in Asia is split pretty much in the middle between Singapore and Hong Kong, with the latter handling mostly novelty and labor-intensive projects. Our Singapore office places work with domestic as well as Malaysian and Thai manufacturers. Our policy is always to inform clients where their work is being placed, if they are interested to know, and to encourage plant visits. We're proud of our suppliers and wouldn't work with any plant which we would not care to show to clients."
Cheung says, "In the past five years, we have seen a steady rise in co-editions for the Chinese market, and as the country develops further, these opportunities can only increase. Imago intends to be the interface between these publishers and manufacturers across the entire product gamut—from juvenile projects to educational textbooks." Imago, which was known for its conventional book-making competency, went into book-plus and intricate handwork segment about seven years ago. "We started by developing our nonbook-product sourcing team in Hong Kong, and now this category accounts for some 30% of our total sales—with more than 50% handled through Hong Kong. Over time, we have also built up our expertise in stationery items and packaging solutions," he says.
For
Kwong Fat, managing business growth took center stage in 2003. "Our rapid growth—brought on mainly by two major alliances in the U.S. and Europe—required additional staff, operational reorganization and ramped-up production capacity," says U.S. marketing director Bob Passantino. "We increased our press room capacity by another 30% with two 4-color and one 2-color presses; added a new film- and liquid-lamination machine to our prepress department; and purchased several new pieces for our bindery as well."
With Kwong Fat's astounding success in pop-up greeting cards—which tripled in sales in 2003 and was its single largest percentage growth area—it's not surprising that this segment has prominent status on the company's agenda. Passantino says, "Improving our expertise in this segment is paramount. Last year, we worked with a large customer on paper engineering for an intricate new line of pop-up cards requiring meticulous handwork—involving precise placement of unusual materials—and equally meticulous stringing processes. We produced several million cards and floor displays for distribution in North America, Europe and Asia within a two-month period." But producing these cards isn't all that challenged Kwong Fat last year—the company also worked with a large U.S. university in the development and production of a unique annual book using thermochromatic inks. "It required special press handling with unique fountain solutions and stringent quality control throughout the whole manufacturing chain," explains Passantino.
In August 2003, London-based Maclehose—which represented Dai Nippon prior to its Hong Kong pullout—was contracted to help expand the company's European market. Passantino says, "For 2004, we expect to see a 25% sales increase, driven predominantly by our new alliances. And this increase will largely come from the juvenile and full-color conventional book segments. Interestingly, there was a significant increase in one- and two-color projects last year. And that prompted us to add a new 2-color perfector." Kwong Fat is also taking a hard look at its bindery department, with tentative plans to purchase a high-speed adhesive line and upgrade one of the case-binders.
Last year was a bumper year for nonpaper supplier
Locomotive. "Our total business grew 70% and the expansion, ironically, came largely from paper products," says managing director Jorgen Kirsebom. "We had a 400% growth on our paper products year-on-year." So what's the reason behind this sudden increase in paper products? "I think Locomotive has gained preferential status with certain suppliers and that gives us the necessary competitive advantage. In addition, our sourcing abilities have improved through the addition of more qualified staff to our organization and through the hiring of quality controllers for our mainland factories," he says.
When PW asks about challenging projects in 2003, Kirsebom says, "The nature of our products—which typically combine paper, nonpaper and all sorts of materials—in itself presents some challenges. Take, for example, an order from Korea for a 10-book set [soft toys and cloth books]. Apart from understanding the Korean market—which is highly channeled through home-shopping programs—we had to pack and sort these 10-book sets into cartons in China to avoid high repackaging costs in Korea. It may sound easy, but considering China's export regulations, this is a tough task. Then there's this 210,000-copy order for a wire-o yearbook which had a full-color interior and a rubber cover—with die-cutting and embossing—laminated on a backing card. To start with, we had huge difficulty getting the rubber covers in any color other than black. And, of course, the customer wanted to see other colors for the four or five different editions meant for different markets. Fortunately, the colored samples looked fabulous and we had yet another great product!"
Logistics and delivery requirements make for another challenge. "We have one client who requires us to deliver its products—which may consist of two to three different titles in three to four languages, i.e., a total of eight to 12 different versions—directly to the warehouses. Because the warehouses aren't theirs and are located all over Europe and the U.S., the packaging/palletizing task becomes complicated. And with other parties involved in the supply chain, things may get messy." Locomotive learned a hard lesson when, during one shipment to Europe last year, the freight-forwarder missed the instruction—on page 2—to sort, palletize and label the products. "Nowadays, we mark in red capital letters the number of pages contained in our instruction document. Also, we try as far as possible to reconfirm every detail using digital photographs as references."
Appearing for the first time in this report,
Magnum Offset is not new to the game. Established in 1986, this family-owned company boasts a lineup of 2-color, 4-color, 5-color and 8-color Heidelberg sheetfed presses supported by a front-end operation of Creo Dolev 800 V3, Creo Lotem 800 II and Iris 43 Proofer. "At present, our business is split right down the center: one half from the publishing industry, of which children's and coffee-table books take up about 60%—70%, and the other half from the commercial/financial sector," says business development manager Anita Lam. "The U.S. and Australia are two of our major markets. The fixed currency peg is an added advantage in dealing with American customers; and in order to further explore its vast potential market, we're setting up a sales office in Florida by the end of this year. In Australia, the competition is less intense, and the shorter shipping time is a major plus. We are in the midst of negotiating a joint partnership deal with a Sydney design house. I also see potential in the American alternative culture magazine market, and this is partly prompted by my own interest in the alternative music and fashion industries. Many of these cool design houses don't have much knowledge in offshore manufacturing, and even though they aren't as big as Vogue, i-D or Mix magazines, they also look for creative printing ideas and fairly high printing quality to enhance their designs. Best of all, these are mostly quarterly issues and so are suited for offshore production, and their print runs—which isn't aren't as high as for mainstream magazines—would suit us to a T."
Speed-to-market is a concept well practiced at Magnum. Lam says, "Take, for example, the weekly Economic Digest, which has at least 150—200 pages and a print run ranging from 15,000 to 20,000 copies. We have only six hours to complete the whole print run—from prepress to printing and binding." For such projects, the production is done in Hong Kong, where Magnum has a crew of 80 people, 4-color sheetfed presses and the second fastest perfect-binding line on the island. In the meantime, its Dongguan factory—with some 300 staff—is more involved in intricate book manufacturing projects. Magnum's investment plans for 2004/2005 are broad-based, covering its book and magazine/commercial printing interests. "For catalogue printing, we're looking into installing a remote-proofing system as an extension to our CtP system, to shave off prepress time," says Lam. "Diversification into nonbook/hand-assembly category also tops our to-do list. This would mean setting up a new division and building our expertise in sourcing and production planning from scratch. Doing more hardcovers is also part of our long-term strategy, and to boost our capacity in this area, we'll be putting a new case-binding line in our China factory early next year."
Entering
Midas's conference room could give one a bad case of envy: the shelves and walls are bursting with physical testimonies of its outstanding quality production. Not many print manufacturers can boast 15 prizes from the 2003 Premier Print Award—the Benny Award in the novelty category, six awards of recognition and eight merit certificates—plus seven from the Hong Kong Print Award. "All these awards attest to our printing know-how and our innovative stance in tackling each project," says marketing manager Andrew Hsu.
With more super-sized projects—over 100,000 copies of coffee-table books—coming through Midas in the second quarter of the year, group managing director T.L. Kwong has been busy with the investment plans: "Capacity is one of my priorities right now. We have commissioned two new 5-color presses and an additional case-binding line. These are on top of the 8-color perfector installed in our Yuanzhou plant and the 6-color in Dongguan last year." In addition to these new machines, construction of a two-story factory adjacent to its existing Yuanzhou facility was completed last June to increase the production space by 60% to 410,000 sq-ft. Presently, Midas has three factories in China—two for book printing and one for paper products/packaging—and a total of 4,000 staff working around the clock. In terms of machinery, it now has a total of 24 presses and three CtP systems. "More than 80% of our customers are going the digital route, and currently we process an average of 12,000 plates per month, which is only 70% of full capacity," said Kwong.
He added: "Business is growing, yes, but the profit margin remains paper-thin. In order to increase our sales volume and market share at a reasonable gross margin, we have offered proactive pricing to the bigger global publishers." As to its market segments, he adds, "In the next few years, our core market base will still be the U.S. and Europe. But that doesn't mean that we're not looking inward, especially at China itself. Midas sees enormous business opportunities in the printing and co-publishing businesses in the mainland. In fact, we have been rather proactive in this area by joining hands with well-known publishers like Anne Geddes to penetrate the Chinese book market. As a reputable international player, publishers can be assured of our vigilance in monitoring the print quality of genuine copies for each title and to protect their copyright."
It's almost impossible to talk about
Palace Press without mentioning at least one of its many high-profile projects. And in 2003, Suze Orman's Ultimate Protection Portfolio—with its special watertight storage and carrying case of mold-injection translucent plastic—showcased the company's capabilities and expertise to the fullest. The carrying case, with a self-contained emergency light, was designed with a handsome blue satin finish; the interactive CD-ROM—the core of the portfolio—was developed by Palace's new media department; and the assembly of 10 guidebooks, a filing system, forms, an acetate tax folder and other elements was complicated, to say the least. Though Palace Press is increasingly known as a book-plus specialist, it continues to push the envelope on traditional print projects. "Recently, we worked on two landmark illustrated environmental titles with the Foundation of Deep Ecology and Island Press. The titles—Welfare Ranching and Fatal Harvest—have unusual specifications: a generous 12"x12" with over 350 pages and hundreds of color photographs. What makes these titles so unique is the usage of special recycled paper—New Leaf Opaque Smooth 160 gsm—which promotes environmental awareness as well as preserves the required high-quality printing," says CEO Raoul Goff.
Palace Press has invested heavily in two new departments at its San Rafael, Calif. headquarters: an in-house design department to complement and extend publishers' design capabilities and a media programming department to tackle any state-of-the-art multimedia, software or original programming requirements. At the same time, it is also creating new opportunities for its clients by developing partnerships with key players in other industries. Its strategic relationship with award-winning company Sideshow Toy, for example, allows for seamless access to toy and figure collectibles and other pack-with solutions. In the meantime, Goff is busy recruiting experienced management personnel for Palace Press: "Peter Behren—former publisher of Sierra Club Books and founding publisher of VIA Books—recently joined us as vice-president for publishing and marketing. His extensive experience will broaden our reach within the trade publishing community. We're now working directly with new clients in all English-speaking markets and creating more co-editions than ever before." One recent packaging project under Palace's Insight Editions imprint, Lost Amazon, has three co-editions: under Chronicle Books for the U.S. market; Thames and Hudson for the U.K.; and Douglas & McIntyre for Canada. Several foreign-language editions are in the works, too.
Unlikely as it seems, the German soccer league has affected
Paramount. Explains marketing director Peter Nustedt: "It revolves around this book on the history of Werder Bremen, the top team in the league. Before we finished binding the first order, a reprint instruction came in. This title was—and still is, since the team won the championship recently—a bestseller in Germany and was printed four times within two months." And it reflects the present state of the print manufacturing industry: first runs shrinking drastically with frequent reprints, and the print manufacturers scrambling to contend with the ever-shorter turnaround time and demanding publishers. "It's nothing new, as the industry has been in that mode for quite some time. The American market in particular requires even faster cycle time, especially if the projects are on CtP workflow." Talking about CtP, Nustedt observes through first-hand experience how much the technology has changed over the years. "We are new to the workflow—our Dainippon Screen CtP system was installed only in 2002. And last year, we had an interesting reprint project in which the original was done in the U.S. several years back. When the copies rolled off the press, we were quite astonished by the visible improvement in the overall quality. It's all in the RIPping process, I think, and perhaps in the better color management embedded in the system."
Business is brisk at Paramount. Nustedt says, "It's very much the same as last year: running 24-hour days and seven-day weeks. Despite our previous investments, we still find it necessary to outsource some work to avoid delaying any deliveries. We're looking at our sheetfed capacity right now and we'll need to make small additions here and there to make sure there's no bottleneck." Last year, Paramount added its fourth heat-set web-press and a stitching line to its pool of six such lines, as well as some ancillary binding equipment. "We did pick up quite a number of titles after Dai Nippon closed its office. The reality is that there are very few sizable printers located in Hong Kong itself, and some former Dai Nippon customers feel that they need to retain the projects here instead of sending them to the mainland."
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QPP, activity books were hot items last year. "Our sales in this segment have more than doubled over the previous year's. And I think our competitive pricing has generated a substantial portion of that increase," says sales director Sanny Liu. "Category-wise, our OEM products—manuals, boardbooks, board games, card games, teaching aids, gifts and stationery items—contributed some 70% to our 2003 revenue, and they will remain our focus for this year and the next." Board games are among QPP's most unusual core products, and its customer list for this segment is growing.
Export business to North America continues to grow rapidly, and Kevin Sharkey—its California-based sales rep—attributes that to shifting perspectives on offshore manufacturing: "With the constant and ever-increasing pressure to cut costs, American publishers have but one choice: go to Asia for their manufacturing solutions. And they are pleasantly and constantly surprised by Asian suppliers' expertise and capabilities in exceeding the quality levels they have come to expect from their domestic suppliers."
In dealing with such a diverse market and product range, QPP has invested extensively to ensure a top-notch production workflow that is almost 80% digital. And no expense is spared in making sure its CMS (color management system) is up to snuff. Its equipment list includes Epson 10600, Epson 7600, AgfaJet Sherpa 24, Iris4Print Creo and accompanying software solutions of BestColor 5.0.1, Agfa Apogee, ColorTune Profile and ProfileWizard 2.0. "Color management is never a simple task, but it's absolutely critical," says Liu. "But by sharing our ICC profile information with customers, we stand to minimize much of the confusion on required color targets. It saves a lot of time going through the prepress processes and, in the long run, it's definitely more cost-effective than conventional proofing methods. But that's not to say conventional methods don't have a place in our factory anymore." Growth prediction in its 2004 sales has also prompted QPP to add 250,000 square —feet to its production floor in Dongguan. New equipment such as an automatic gluing line for rigid boxes and more hot-stamping machines was also installed last year.
Quality Printing (not to be confused with QPP) is a much smaller company but no less capable of churning out glossy coffee-table books, children's boardbooks and full-color catalogues. Working in two shifts, its 30 workers operate two 4-color and one 2-color presses. "Small is beautiful—I fervently believe in that," says managing director and owner Joseph Yu. "We are happy receiving small and medium-sized orders, and these are keeping us busy enough. We don't see such orders shrinking in the near future."
With so many famous names populating the Hong Kong/China print manufacturing industry, it's too easy to forget that 20 years ago these same companies started their operations with a crew of mostly family members or close friends. So it pays not to underestimate the services and quality of smaller establishments like Quality Printing—which may be located in musty warehouses or multistory complexes with rather dubious exterior—because their services and quality products shine through all that. Yu notes, "You must remember that 80% of the print manufacturers in Hong Kong have operations like ours: small and with no specialization." Last year, 25% of Quality's bottom line was from the book printing category, most of it coming from the U.S. and Australia. "The rest of our portfolio deals with catalogues, calendars, packaging and magnetic card production. We're one of the approved printers for Hong Kong's government departments, and over the years we have also printed for Northwest Airlines, Unicef, Bayard Press and the Australian Broadcasting Corp." Most of Quality's jobs come either through print brokerage firms or through inquiries via its Web site.
Established in 1993,
Regal Printing is relatively new to the industry, compared to other print manufacturing suppliers reviewed in this report. However, its young management team, led by managing director Maurice Kwan, is making leaps and bounds in the competitive marketplace and doesn't shy from big investments in high-tech equipment. Regal's press lineup at Wong Chuk Hang Road—the street best known as the Printing Alley of Hong Kong prior to major relocations across the Luo Wu border—is impressive: two 8-color, two 5-color, three 4-color and two 2-color. Prepress-wise, its Agfa CtP system, in place since 2000, will soon be joined by the most advanced VXT system. Currently, Regal's workflow is about 60% digital, and the company hopes the new system will raise the percentage further. "Though our prepress system is adequate to handle most of the color-separation work, we still outsource the high-end projects to commercial bureaus," Kwan says.
It's interesting to note that the bulk of Regal's operation still resides in Hong Kong, and there's no intention whatsoever to shift the entire floor across the border. "We do have a second factory in Foshan—with one 5-color, one 4-color and one 2-color press—for projects that are less time-sensitive. We have about 600 people over there, half of whom are involved in hand-assembly projects," says Kwan. "Our decision to stay put is based on our desire to be closer to our customers and to make their press-checking visits easier and more convenient. They definitely appreciate not having to travel another two to three hours to Foshan after a 11- or 16-hour flight!"
But doesn't that decision put extra pressure on overheads? "Not really. We're using the latest technology, which requires less manpower and is far more efficient and therefore cost-effective. To illustrate, our 8-color requires only three people to operate it. In China, because labor is cheap, the tendency is to increase the operational strength: a 4-color would have at least six operators. Just look at our office here: we have 70 people here, and yet we generate 60% of the total production and take care of all the front- and back-office functions. So it's not as if by moving everything to China we'll save a bundle."
In 2003, Regal grew 20%, with its total business split almost equally among the three main categories of coffee-table/art books, children's books and gift/card/stationery items. "About 75% of our business comes from the U.S., mainly through brokers. But that's about to change, as our plan is to open a sales office in the Midwest in 2004."
The new
Regent Publishing office is twice as big as its previous premises, with ample space for future expansion. And it looks like the space won't be there for much longer, if our conversation with managing director George Tai is any indication. "I estimate an increase of 15%—20% in our sales for 2004. The strong currencies in certain parts of the world are most advantageous to everybody. These have driven many publishers to forsake their geographical comfort zone and jump onto the offshore manufacturing bandwagon for the very first time in search of cost-efficiency." In January, Regent contracted with an agency in Vienna to further penetrate the European market. Why Vienna? Tai explains, "It's almost in the heart of Europe and this central location is beneficial to our agent, who will be servicing the surrounding areas. We need to start 'converting' pro-domestic European publishers to move their print manufacturing to Hong Kong/China or, to be blunt, to us." Right now, the Vienna office is manned by Gabriela Scolik and Norbert Wurzinger, with a combined 25 years of experience dealing with European publishers.
"This is our 20th year in the business, and our philosophy is the same today as it was then. At Regent we don't put much emphasis on quantity. What counts is quality. Because quality—and the reputation that comes with it—lasts much longer in a crowded marketplace," says Tai.
Print brokers, according to Tai, walk a tightrope in balancing the needs of the customer and the supplier: "We don't want to squeeze our suppliers too hard because we need them to be there for the long haul. At the same time, we need to ensure our customers receive reliable supplies at reasonable prices. We understand completely the publishing industry's need to put a cap on manufacturing costs and to make sure products are priced for maximum sales potential. So we try not to spread ourselves too thin because then there's no leveraging volume purchase or ground to build a long-term business partnership. We also work together with suppliers and publishers to come up with innovative ideas and novel products that will increase each party's product or service value. You may say that as the middle person we're responsible for making sure everyone in the equation wins."
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Sino Publishing, managing director Malcolm Lee's personal policy of "letting customers sleep at night" probably means he doesn't need (nor have the luxury of) much naptime. With a few new clients providing contract work, Lee naturally has a very upbeat forecast for Sino: "We're still set on the growth pattern of 5%—10% year-on-year. It's tough out there, of course, but we're seeing much support from the industry. The process of cultivating new accounts takes time, and one doesn't normally see any tangible impact until a year down the road. So you can say that we're reaping the benefits of our past work now."
Says Lee, "We pride ourselves on being small: there're only 16 of us in this office, handling and being accountable for everything. We don't have many customers, but we work real hard for those we have and grow with them.
"We engage GSS [gssquality.com] to implement stringent measures, and their inspectors are responsible for signing off on every process, right down to the packing and shipping. I don't think any other brokers have that." Lee echoes the sentiment heard repeatedly during this tour: the weak U.S. dollar is a boon to most in the industry. "I don't see the dollar appreciating quickly, and even if it does strengthen, it should take a few months before showing significant gains." Since Sino—as do most suppliers in the region—buys and sells in U.S. dollars, the present condition is ideal for expansion in the European and Australasian regions. "But the U.S. remains an important market, as our direct business with American publishers accounts for 15% of our total revenue. Indirectly, the figure is closer to 60%." Lee's plan for 2004/2005 is to "carry on as usual. This philosophy of customers come first, and customers have to know that their work is in good hands, has worked for us in the past and will work equally well in the near future. As the saying goes, don't fix what isn't broken."
For president/CEO Yeo Chee Tong of
SNP
(Singapore National Printers), "Acquisition is very opportunistic by nature. With Singapore's limited potential organic growth owing to a limited market size and high labor costs, we view acquisition as the way to go forward." Its first taste of M&A started with the 1999 acquisition of Srivatana (Thailand) and a headstart in the children's pop-up/handwork segment. "Since then," he says, "we adopted a 'go north' policy, looking for opportunities in Hong Kong/China to expand our operations and capacity. Using Srivatana, which has since been renamed SPrint Thailand, as a reference point and base, we look for compatible operations, and we saw that in both Excel and Leefung. With Excel, we got our first exposure to low-cost, labor-intensive manufacturing in China. Leefung actually came in at a time when I was worried about the impact of the continued devaluation of the greenback on our export business. So this acquisition, which has a considerable share in periodical/magazine printing and commercial packaging segments in China, is very important from a financial viewpoint."
Adds Yeo, "We still see the U.S. market to continue being our biggest export market in 2004, but we're definitely working on increasing our presence in the U.K., Continental Europe and Australasia. At present, each of our overseas facilities continues on an expansion course." As for the very question on everybody's mind about the next company on SNP's to-acquire list, he says, "As I mentioned earlier, if the opportunity arises and the fit is there, we will certainly take a close look. But for now, we have much to do to integrate our existing operations."
For
Starlite, the last 34 years has seen tremendous growth from its humble beginnings in letterpress/label printing. It now boasts 10 active subsidiaries—spread out in Hong Kong, China and Singapore—with a 5,000-strong workforce (7,000 during peak periods) and total sales of $80 million in 2003. And while its reputation is firmly grounded on its core expertise as a print packager, the company has become more broad-based. It has even entered the children's book and paper product segments.
What prompted Starlite to shift from packaging to its present portfolio, according to founder and chairman K.Y. Lam, was a very rational decision: "Packaging by nature is seasonal, and though it constituted a major portion of our business, we had excess capacity and we wanted to grow in different areas. So in 1998 we decided to broaden our portfolio." Now, with its children's book division thrown into the mix, printing of books or, rather, paper-related products, accounts for almost 30% of Starlite's total business. "We decided to go into high-end coffee-table/art book printing early this year. In the meantime, I fully expect to see increased demand for higher-value paper products in 2004, and that will constitute a significant part of our total sales." With its innovation center in Shenzhen boasting 40 staff busy designing, creating and proposing new products to customers, Starlite definitely won't lack support in providing value-added services.
Starlite boasts a machinery lineup consisting of Agfa CtP systems, 4- and 6-color presses, a 9-color label press and a plethora of die-cutting, folding, gluing, saddle-stitching and perfect binding lines. Its first CtP system was installed more three years ago. "Different customers have different needs and products. As a solutions provider—not just a print manufacturer—we must be able to fulfill these different needs," he continues. With 80% of its business coming from the U.S. and the rest from Europe, Starlite is working hard to penetrate even deeper into these markets. Recently, it won the Lil' Bratz packaging/printing contract through its rock-solid reputation forged while working with industry stalwarts Hallmark and American Greetings. Starlite is also eyeing the soon-to-be regulated Chinese publishing industry. There are also plans to work with educational publishers across the border and to do more in-house publishing.
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Sun Fung, the mammoth production of Complete Far Side in 2003 provides many interesting first-hand stories. "The order was for a total of 200,000 copies—with 100,000 in slipcases—plus 2,000 luxury sets. Three of our four 8-color Heidelberg perfectors—one of them specially purchased in April for this project—and three case-binding lines were churning out the pages and the cases. The manufacturing process was split into two halves to make it more manageable," says business development director Kevin Lam. "Finally, this giant volume, measuring 10"x14"x4.25", went into 48 containers—46 of which were 40-footers—bound for the U.S."
"Juggling our manufacturing capacity and schedule was the highlight of the day, especially when another high-volume, fast-turnaround project went into production during the height of the Complete Far Side process in June—August," says Lam. "This job, Photo Albums and Sketch Books for Borders Press, was a 280,000- copy order. Although it didn't require special printing processes, assisting our clients in choosing the best cover materials and the massive handwork involved were very challenging indeed." As for new trends, Lam recently received inquiries from German and Belgian publishers for printing on special synthetic paper with special glue for limp-binding, to make it absolutely waterproof. For Lam, such inquiries are good for new product development and for the company to learn and grow with the publishing industry.
"We move upward and forward based on the achievements of the previous year. In other words, we have a controlled growth of about 15%—20% annually, and largely focused on the U.S. and Continental Europe markets," says sales and marketing director Gordon Kong.
"Right now, children's products contribute less than 10% to our bottom line, but we see vast potential in this segment," Kong says, As for sales growth, he sees the push coming mainly from Continental Europe and Australia—regions with strong currencies. "But our U.S. market is growing rapidly, and it's actually the second largest in terms of total sales, with some 38%. Having a New York office—with Jeff Raether in charge—has helped us widen our representation there. For 2004/2005, we plan to have offices in both Europe and Australia," Kong says.
Toppan Printing is about the unlikeliest place to hear about Asia's newest recovery story, Japan. But in this printing plant, the indications are strong that Japanese firms and consumers are back in the game after a long, befuddled standstill. According to senior manager Megumi Sonoda, "Even though the U.S. is still our biggest market, it's now being closely trailed by Japan, which is growing larger by the day. If previous inquiries from Japan were for labor-intensive projects, these days they are more in the conventional/glossy printing category—rather wide-ranging but not including periodicals."
"Over at our Shenzhen facility, you'll see mostly export printing, packaging and hand-assembly operations. Our new Shanghai plant—which is under construction and should be operational by this autumn—will basically serve the domestic Chinese market. The plan is to start off with packaging followed by commercial printing. We have to take it a step at a time and not to be overly ambitious. At Toppan, we don't question the need to enter the Chinese market. Our question is more when to go and where to set up."
And like everybody else with business concerns in the mainland, Sonoda is keeping a close watch on anything affecting his operation. "The one burden of any printing operation is always the raw material cost. It's totally beyond our control and it directly hits the profit margin. This year, all eyes are on paper costs. For us—and the industry in general—any gains are not easily transferable to the customer, as there's a considerable time lapse between quotation and delivery or invoicing."
According to Sonoda, in almost all aspects of the manufacturing process, cost has undermined all other factors. "For coffee-table books, the priority or consideration has shifted from 'gorgeousness' or 'exclusivity' to 'cost effectiveness.'''
Tien Wah Press (TWP)—the brand name in pop-up book manufacturing in Asia— helps PW to put the category in the right perspective. "There's a significant slowdown in pop-ups in recent years, and this is not just from competition from other categories of children's products. Interactivity—in the form of electronic toys like PlayStation and Game Boy, as well as computer games—is making a run for the money, and it's getting more successful with each new version and price reduction," says general manager for sales and marketing Eric Koh. "In contrast, we see an increased demand for book-plus/multi-component titles, which require hand-assembly and efficient sourcing for accessories."
With roughly 900 people in its modern Singapore facility and another 1,500 in its Johore Bahru plant, Tien Wah Press straddles the best of both worlds: high-tech book production in the island-state and specialty book production—boardbooks, looseleafs, pop-ups, novelty books and other book-plus products—just across the narrow strait in neighboring Malaysia. Its new extension to the Johore plant—which will significantly boost hand-assembly capacity—will be operational in July. TWP has also added another CreoScitex/Prinergy system to its Singapore plant, a fully automated case-binding line in its Johore facility and also multicolor perfecting presses for both plants.
"We now have three CtP systems, two in Singapore and one in Malaysia," says Koh. "For most, digital workflow means portability—the ease to move files from one place to another—without loss of quality or data—if done correctly, of course—and convenience. Bypassing the traditional filming process also means that both publishers and suppliers cut down on raw material costs and the all-important cycle-time issue."
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Wing King Tong, a slight change in the name—which it had held dear for the last 60 years—makes for an interesting conversation. "The shortening of our company name to WKT has not really met with universal approval," quips marketing director Jeremy Kuo. "The name change was probably one of the few organization- and market-driven moves we made in the past year. Organization-driven because we had to address some internal needs, and market-driven because we want to improve the accessibility of this company." Going along with the new identity is a new upbeat logo, designed by managing director Alex Yan's daughter, a soon-to-be graduate of the Art Center College of Design in California.
"We have also completed moving our New Territories plant to China. At the same time, we have also installed two more presses," Kuo adds. WKT's specialization in children's book printing—boardbooks that are heavily illustrated—is something the company acknowledged and leveraged for further expansion and market penetration.
Not surprisingly, WKT is also aggressively developing its sourcing and handwork expertise to satisfy its demanding children's book publishing clientele; hence its manufacturing facility expansion in this area. But, as Kuo puts it, "Please don't cast us as just a children's book manufacturer because, as you can see, we have capacity—printing and binding—for adult products." And this is the segment which Arthur Quek, its New York rep, is working on. "Quek has been a great asset to us since he came onboard in 2002. He has raised our profile among American publishers, and his experience with both marketing and manufacturing has been invaluable."
Asked for his comments on the compacting publishing market, Kuo says, It's definite that the bigger publishing houses are getting bigger through mergers and acquisitions. And, as the supplier, we must learn to adapt to the situation at hand. A similar shakeout is also happening on our side of the fence. There simply aren't that many family-run companies like ours left in the playing field."
