The Top 25 Magazine Printers
Paper is the second trend. The overcapacity there has been greatly reduced over the last year. Last summer, about a million tons of production was taken out of the system … which … caused significant tightening of the supply—so much so that even some projects had to be canceled because paper couldn’t be purchased. And that’s now causing the paper’s pricing to increase significantly, so much so and so quickly that a lot of publishers and catalog companies have a really hard time adapting to the new business environment. I’m afraid that these paper-price increases are [happening] too fast, and are not allowing the industry to really accommodate and adjust to these prices.
The third major issue in the marketplace is coming from the distribution side. Price increases from the post office and also the overall cost drivers like fuel surcharges ... are causing … stress on our end-customer who purchases print and distribution services. That’s really put a lot of stress [on] the industry, and it has all been compounded by the overall softening in the marketplace, so that there’s quite some concern in the industry overall.
Having said all of that, we are still bullish about our future, our industry, so much so that we decided last spring to again add additional capacity into our company—about 9-percent companywide—to continue on our growth path. We want to continue to grow our business, and we feel that there are good opportunities to grow and expand by continuing to do what we have done all along: focusing on our customers to make sure that we offer the right services; focusing on our employees to make sure that we have the right skill sets to actually service our customers; and continuing to reinvest in our manufacturing platforms so that our employees have the right tools to service our customers.