Where’s the Money—International Business

More often than not, U.S. printers bitterly complain about overseas competitors taking their work and producing it for less money. But there is a niche grabbing international jobs to help grow their own profits. Some are attracting business to their own facilities in the U.S.; others are supplanting themselves in a foreign country using their expertise to expand their business.

But printing for international clients is still a niche specialty. “Printing is produced for a predominantly domestic market,” said Ron Davis, vice president and chief economist for Printing Industries of America. According to his most recent figures from a PIA Quarterly Print Market Survey in the first quarter of 2007, large printing firms with 100 or more employees responded that 44.4 percent had performed a print job for a customer outside of the U.S. Shops with 50 to 99 employees were the next most likely, with 39.53 percent responding in the affirmative, whereas shops with one to 49 employees only had 7-21 percent produced work for an international customer.

Later, in a follow-up, in Q4 of 2007, PIA Quarterly Print Market Survey, printing firms were asked if over the last half of the year did they experience any increased sales to foreign customers; 10.10 percent responded in the affirmative, saying that their total sales increased by 5.13 percent because of the increase in foreign sales for 2007.

While it may seem to be an interesting growth market, there are barriers that must be overcome to achieve international customers. Language is the most obvious; however, there are different time zones, shipping charges, and foreign companies have different cultural expectations. And then there are governmental rules that may apply. Once a U.S. printer has brokered a strong relationship with foreign customers, they may decline to advertise that achievement for fear of inviting competition.

The key to finding and maintaining international business is forming close relationships with the customers. Many U.S. printers hire representatives to visit their customers or have on-site staff with bilingual abilities. George Ryan, president and CEO of Printing Association of Florida (PAF) and former executive vice president and COO of PIA/GATF, has introduced a number of U.S. printers to their counterparts in other countries. “It’s all relationship selling,” said Ryan. “If I can find a U.S. printer that can help a printer in another country, I try to facilitate that relationship.”

EarthColor, one of the fastest-growing, most comprehensive digital prepress, printing and finishing organizations in the country with headquarters in Parsippany, N.J., has been serving the Latin American market from its facility in Houston for more than a decade. Relationship building has been key to its international growth and Earth-Houston has maintained its presence with an experienced rep in Monterey, Mexico.

“Our representative has over 30 years experience,” explained Jeff Wright, Earth-Houston’s vice president of sales and business development. “He does an excellent job representing our company in Mexico. As for us, we can exceed their press capabilities; in Mexico there is no printer with UV press capability, and many only have four- to six-unit presses without coaters of any kind. We also pair well with Mexico City corporations who are seeking ways to show off their sustainability efforts. Mexico’s capitol has such a European influence and they are light years ahead in sustainability recognition, as we are. We also make our Latin American customers comfortable by offering a multi-lingual staff. There are very few printers who have this capability. We do have other U.S. printers who would like to take away our business but Latin American customers are loyal. They are also very price conscious.”

Wright notes that the majority of its work is high-end corporate annual reports, having completed 46 annual report jobs this year, an increase of four books over last year. This year, the firm produced its first annual report for a customer in Argentina. “We haven’t had the growth that we’ve had in previous years due to the recession, and some of our customers have kept their jobs in-house,” said Wright. “We’ve also been impacted by the devaluation of the peso and some customers have eased their quality level and become more price conscious; we are doing less special techniques this year than we have for the past two to three years.”

But EarthColor continues to market itself and maintain a presence in Latin America. This part of the world is an “emerging market” for us, noted Wright, and each May, the printer showcases its capabilities with a booth at a national investor conference for Latin American corporations.

Wright said that his firm must be “astute” on the laws governing NAFTA (North American Free Trade Agreement) and know how to navigate it and maintain a paper trail that he says is “massive.” He also said that the company keeps abreast of its costs since there is a 20 percent tax on certain collateral coming into Mexico.

“Typically, we add tremendous value to their annual reports,” said Wright. “We offer both printing and mailing, and we can print 40 to 50 books digitally for a quick corporate board meeting and the rest on our offset presses to be mailed to their shareholders. We can turn around their jobs much faster than a printer in Mexico. Typically Mexican printers turn a job in eight to 12 days; we turn a job in three days.”

For example, EarthColor Houston recently printed 300 annual reports for a Latin American customer in an 18-hour turnaround time. From file release to mailing, the printer produced the books on its digital presses and through its full bindery.

Wright also said the firm’s Latin American customers are very hands-on. Teams of five representatives including financial experts come to EarthColor’s Houston facility to scrutinize the annual reports before they are printed. Reports are printed in both English and Spanish.

Ticket for Success

Quick Tick International, a ticket printer based in Houston, has been very active and successful in exporting printed tickets to the Mexican, Caribbean and South American markets. While the company has been expanding its E-ticket production for the past nine months, it is its paper tickets that represent 80 percent of the firm’s business.

“We just hired a new Colombian representative to market our business throughout Latin America,” said Ellie Barela, Quick Tick’s marketing manager. “He’ll do all of the legwork, traveling to customers, meeting them face-to-face, and promoting our ticket production to corporations, universities, and music venues.”

Barela said the firm first began to serve the Caribbean islands, such as the Dominican Republic, Virgin Islands and Puerto Rico. “I believe they hired us to produce tickets because they didn’t have the capabilities,” he said, “or it was cheaper to have the tickets imported for tax reasons. Our turnaround time is faster than their island printing companies. We can produce an order in three to five days.”

Another difference between Quick Tick’s U.S. customers vs. their international customer is the size, run length and art on each ticket. “The international clients do pay more for more ‘artsy’ tickets, especially in the Caribbean,” he explained. “They usually order a 3x7-inch ticket with more full-color art on it as a keepsake promotion. Usually our U.S. customers order the 5x1.5-inch quick throw-away ticket. They also order longer run lengths and spend more money on the tickets, as well as extras such as wristbands and back-stage pass tickets.”

Quick Tick’s operation consists of sheetfed and digital presses along with a full bindery. Its verifying department, an important component for producing tickets, uses a computer system to verify the amount and tally of each ticket job and ensure the accuracy of each ticket number.

While the recession has slowed orders a little bit, Quick Tick has found that its international clientele is a growing area. “Most of their orders come in by phone,” said Barela. “We have three representatives who speak Spanish and the clients get very friendly with them. The international customers are very hands-on. They like to talk to someone about their job and make sure it is correct. Of course, that is fine with us. They certainly can’t drive to our offices to approve a press proof.”

A Foreign Affair

Some U.S. printers have purchased or built their own facilities in foreign countries to produce work. For example, Quad/Graphics, Sussex, Wis., is the largest privately held printer of magazines, catalogs and other commercial products in the Western Hemisphere, and the third largest printer—public or private—in the nation.

But in 1998, the firm began a relationship with a Polish printer that led to QuadWinkowski, Central Europe’s largest commercial printer providing advanced print-production services including digital imaging, web offset and sheetfed printing, finishing and distribution for a wide variety of clients including Edipresse, Agora, Polityka, Burda, Egmont, Bonnier, Hachette Filipacchi, Marquard Media, catalogs Orvis, Lego, IKEA HomeShopper, Tupperware and Music & Memories; and newspaper inserts/circulars for METRO AG, Auchan and E.Leclerc.

It exports nearly 40 percent of the work it produces on behalf of its clients. In addition to QuadWinkowski in Poland, the company has print partnerships in Argentina and Brazil.

R.R. Donnelley & Sons Co., the world’s largest printer, has reach across 14 different time zones, on four continents, and in nearly 40 countries. In early January, the company announced that it had acquired the assets of PROSA, a Chilean web printing company located in Santiago, from Copesa (Consorcio Periodistico de Chile) for a cash consideration of approximately $23.5 million.

The acquisition will enhance Donnelley’s Latin American platform and complement its existing facility in Santiago de Chile. PROSA produces magazines, catalogs, retail inserts and soft-cover textbooks. With the addition of PROSA, Donnelley will have 15 facilities in Latin America and the Caribbean, including operations in Argentina, Brazil, Chile, Mexico and Venezuela.

Consolidated Graphics, one of the world’s leading sheetfed, web and digital commercial printing businesses with 70 printing companies strategically located across 27 states and Canada, recently opened a new facility in Prague.

“It began as an opportunity to expand in Europe with a particular client,” explained Aaron T. Grohs, Consolidated‘s executive vice president of sales and marketing. “During the first year, we entered into it as a joint venture but then it made sense to move into our own facility where we own and control everything. It continues to grow for us.”

The Prague operation utilizes digital printing equipment to produce print-on-demand marketing collateral and personalized pieces.

The facility is used by both United States and European customers for their distribution needs.

“We work with over 20 of the largest consumer name-brand companies,” said Grohs. “These firms have both North American and international needs. We have Asian companies in the consumer electronic field that have printing needs in the U.S. Many Asian firms ship their products into Mexico where they are assembled but they need printed products like packaging and brochures to go along with the product.”

Debora Toth is a freelance writer who has been writing about the graphic arts industry for 25 years. She also is a public relations specialist and operates Coastline Public Relations. She can be reached at [email protected].